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PRESIDENTIAL DECREE NO. 1885
PRESIDENTIAL DECREE NO. 1885 -
AMENDING Section 290-B OF THE NATIONAL INTERNAL REVENUE CODE AS
AMENDED, IN ORDER TO EXPAND THE SCOPE OF THE "FLEXIBILITY CLAUSE"
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WHEREAS,
Sec. 290-B of the National Internal Revenue Code, as amended, provides
for a flexibility clause empowering the President, under certain
conditions and subject to specific limitations therein, to revise tax
rate, change the classification of taxable articles, and revise the
taxable base and manner of computing internal revenue taxes; chanroblesvirtualawlibrary
WHEREAS, in order to enhance tax collection, it is necessary to
simplify and modify the existing tax structure through the
systematization of tax deadlines as well as the method and manner of
tax computations;chanroblesvirtualawlibrary
WHEREAS, it appears that the present flexibility clause, is inadequate
to satisfy the foregoing objectives; moreover, the same is not an
effective instrument to enable the country to fulfill its ASEAN and
international commitments.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers in me vested by the Constitution, do hereby
order and decree, as follows: chanroblesvirtualawlibrary
Section 1. Section 290-B(1) of the National Internal
Revenue Code, as amended, is hereby amended as follows:cralaw:red
"Sec. 290-B. Flexibility Clause. —chanroblesvirtualawlibrary
"(1) In general. — In the interest of the national
economy and general welfare and subject to the limitations herein
prescribed, the President upon recommendation of the Minister of
Finance is hereby empowered to make adjustments on all internal revenue
taxes where such adjustments refer to the following:cralaw:red
"(a) Revision of rates; chanroblesvirtualawlibrary
"(b) Change in the classification of articles;chanroblesvirtualawlibrary
"(c) Revision of taxable base including modification
or change of the manner and method of computing the tax such as, but
not limited to, the change in deduction scheme from tax credit to cost
deduction;chanroblesvirtualawlibrary
"(d) Revision of deadlines for the filing of tax
returns, payment of tax and compliance with other tax requirements; and
"(e) Modification or integration of safeguards to
ensure the collection of the correct tax.
"The above authority may be exercised by the President if any of the
following conditions exists: chanroblesvirtualawlibrary
"(a) When there is a need to obviate unemployment and
economic and social dislocation;chanroblesvirtualawlibrary
"(b) Where, due to adverse economic conditions it
becomes imperative to revise tax rates and/or taxable bases;chanroblesvirtualawlibrary
"(c) Where, in the interest of economic development
it is necessary to redirect expenditure or consumption patterns;chanroblesvirtualawlibrary
"(d) Where, in the light of technological and social
changes, it is necessary to change the classification of certain
articles on the bases of the concepts of essentiality or the degree of
manufacturing done; chanroblesvirtualawlibrary
"(e) Whenever by reason of fluctuation or currency
values and/or inflation or deflation, the existing base and/or price
levels are no longer realistic or consistent with the current price
levels;chanroblesvirtualawlibrary
"(f) Where, it is necessary to counter adverse
economic action on the part of another country;chanroblesvirtualawlibrary
"(g) Where such revision is necessary to simplify and
systematize the various tax deadlines;chanroblesvirtualawlibrary
"(h) Where such adjustments are necessary pursuant to
Asean or International Commitments in respect of trade, tariff and
other similar arrangements." chanroblesvirtualawlibrary
Section 2. Paragraph (2) of Section 290-B of the
National Internal Revenue Code, as amended, is hereby amended as
follows:cralaw:red
"(2) Specific limitations on the exercise of
authority to make adjustments in all internal revenue taxes:cralaw:red
(a) The existing tax rates may be increased or
decreased by not more than 50%, Provided, That the rates as last
revised shall be the basis for this limitation.
(b) Before any recommendation is submitted to the
President by the Minister of Finance pursuant to the provisions of this
Section, a public hearing shall whenever practicable be held and
interested parties afforded a reasonable opportunity to be heard.
Section 3. Rules and Regulations. — The Minister of
Finance upon the recommendation of the Commissioner of Internal
Revenue, shall promulgate the necessary rules and regulations to
implement the provisions of this Decree.
Section 4. Repealing Clause. — All laws, decrees,
executive orders, rules and regulations and other issuances or parts
thereof which are inconsistent with this Decree are hereby repealed,
amended or modified accordingly.
Section 5. Effectivity. — This decree shall take
effect upon its approval.
Done in the City of Manila,
this 5th day of October, in the year of Our Lord, nineteen hundred and
eighty-three.
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