PRESIDENTIAL DECREE NO. 426, March 30, 1974
AMENDING CERTAIN PROVISIONS OF THE LOCAL TAX CODE ENACTED UNDER PRESIDENTIAL DECREE NO. 231, DATED JUNE 28, 1973.
Decree No. 231 took effect on July 1, 1973; and
WHEREAS, there is an imperative necessity to enact
amendatory measures to make the Local Tax Code more responsive and
attuned to the changing patterns of business and economic trends and
thereby transform it into a more effective instrument by which local
governments may generate urgently needed revenues without unduly
disturbing price levels in the domestic market;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers in me vested by the Constitution,
do hereby decree, order and make as part of the law of the land the
following amendments to the Local Tax Code:
SECTION 1. a. Paragraphs (a), (p), (r), (f-1), (k-1),
and (p-1) of Section 3 of the Local Tax Code shall read as follows:
“SEC. 3. Definitions. — When used in this Code —
“(a) Agricultural product includes the yield of the soil
such as corn, rice, wheat, rye, hay, coconuts, sugar cane, tobacco, root
crops, vegetables, fruits, flowers, etc and their by-products; ordinary
salt; all kinds of fish; poultry; and livestock and animal products,
whether in their original form or when preserved in a more convenient
and marketable form through the simple processes of freezing drying
salting, smoking, and stripping.“x x x
“(p) Hotel includes any house or building or portion
thereof in which any person or persons may be regularly harbored or
received as transients or guests. A hotel shall be considered as living
quarters and shall have the privilege to accept any number of guests and
to serve food to the guests therein.“x x x
“(r) License or Permit is a right or permission granted
in accordance with law by a competent authority to engage in some
business or occupation or to engage in some transaction.“(f-1) Public market refers to any place, building or
structure of any kind designated as such by the local board or council,
except public streets, plazas, parks and the like.“(k-1) Services means the duties, work or functions
performed or discharged by a government officer, or by a private person
contracted by the Government, as the case“x x x
“(p-1) Wharfage means a fee assessed against the cargo of
a vessel engaged in foreign or domestic trade based on the quantity,
weight or measure received and/or discharged by such vessel.”
- The following definitions of terms are hereby adopted for
inclusion in Section 3 of the Local Tax Code:
“(r-1) Boarding house includes any house where boarders
are accepted for compensation by the week or by the month, and where
meals are served to boarders only.“(s-1) Business agent (Agente de negocios)
includes all persons who act as agents of others in the transaction of
business with any public officer, as well as those who conduct
collecting, advertising, employment, or private detective agencies.“(t-1) Cabaret/Dance hall includes any place or
establishment where dancing is permitted to the public in consideration
of any admission, entrance, or any other fee paid on, before or after
the dancing, and where professional hostesses or dancers are employed.“(u-1) Carinderia refers to any public eating place where
foods already cooked are served at a price.“(v-1) Collecting agency includes any person other than a
practicing attorney-at-law engaged in the business of collecting or
suing debts or liabilities placed in his hands, for said collection or
suit, by subscribers or customers applying and paying therefor; while a
‘Mercantile Agency’ is any person engaged in the business of gathering
information as to the financial standing ability, or credit of persons
engaged in business, and reporting the same to subscribers or to
customers applying and paying therefor.“(w-1) Compounder comprises every person who, without
rectifying, purifying, or refining distilled spirits, shall, by mixing
such spirits, wine, or other liquor with any materials except water,
manufacture any intoxicating beverage whatever.“(x-1) Contractor is deemed synonymous with the term
‘Builder’ and, hence, any person who undertakes or offers to undertake
or purports to have the capacity to undertake or submits a hid, to, or
does himself or by or through others, construct, alter, repair, add to,
subtract from, improve, move, wreck or demolish by building, highway,
road, railroad, excavation or other structure, project, development or
improvement, or to do any part thereof, including the erection of
scaffolding or other structures or works in connection therewith. The
term contractor includes subcontractor and specialty contractor.“A ‘General Engineering Contractor’ is a person whose principal
contracting business is in connection with fixed works requiring
specialized engineering knowledge and skill, including the following
divisions or subjects: irrigation, drainage, water power, water supply,
flood control, inland waterways, harbors, docks and wharves, shipyards
and ports, dams, hydroelectric projects, levees, river control and
reclamation works, railroads, highways, streets and roads, tunnels,
airports and airways, waste reduction plants, bridges, overpasses,
underpasses and other similar works, pipelines and other system for the
transmission of petroleum and other liquid or gaseous substances, land
leveling and earth moving projects, excavating, grading, trenching,
paving and surfacing work.“A ‘General Building Contractor’ is a person whose principal
contracting business is in connection with any structure built, being
built, or to be built, for the support, shelter and enclosure of
persons, animals, chattels or movable property of any kind, requiring in
its construction the use of more than two unrelated building trades or
crafts, or to do or superintend the whole or any part thereof. Such
structure includes sewers and sewerage disposal plants and systems,
parks, playgrounds and other recreational works, refineries, chemical
plants, and similar industrial plants requiring specialized engineering
knowledge and skill, powerhouses, power plants and other utility plants
and installations, mines and metallurgical plants, cement and concrete
works in connection with the above-mentioned fixed works.“A person who merely furnishes materials or supplies without
fabricating them into, or consuming them in the performance of the work
of the general building contractor does not necessarily fall within this
definition.“A ‘Specialty Contractor’ is a person whose operations pertain
to the performance of construction work requiring special skill and
whose principal contracting business involves the use of specialized
building trades or crafts.“(y-1) Dancing school includes any establishment where
ballroom dancing is taught and permitted to the public in consideration
of an enrollment, admission, membership, or any other fees.“(z-1) Distillers of spirits comprises all who distill
spirituous liquors by original and continuous distillation from mash,
wort, wash, sap, or syrup through continuous closed vessels and pipes
until the manufacture thereof is complete.“(a-2) Lending investor includes all persons who make a
practice of lending money for themselves or others at interest.“(b-2) Manufacturers of cigars or cigarettes includes
those whose business it is to make or manufacture cigars or cigarettes
or both for sale or who employ others to make or manufacture cigars or
cigarettes for sale; but the term does not include artisans or
apprentices employed to make cigars or cigarettes from materials
supplied by the employer, the latter being lawfully engaged in the
manufacture of cigar and cigarettes.“(c-2) Manufacturer of tobacco includes every person
whose business it is to manufacture tobacco or snuff, or who employs
others to manufacture tobacco or snuff, whether such manufacture be by
cutting, pressing, grinding, or rubbing any raw or leaf tobacco or
otherwise preparing raw or leaf tobacco, or manufactured or partially
manufactured tobacco and snuff, or putting up for consumption scraps,
refuse, or stems of tobacco resulting from any waste by sifting,
twisting, screening, or by any other process.“(d-2) Money shop is an extension service unit of a
banking institution usually operating in public markets with authority
to accept money for deposit and extend short-term loans for specific
purposes.“(e-2) Real estate broker includes any person, other than
a real estate salesman as hereinafter defined, who for another, and for
a compensation or in the expectation or promise of receiving
compensation, (1) sells or offer, for sale offers to buys or
improvements thereon; (4) or shall be employed by or on behalf of the
owner or owners of lots or other parcels of real estate at a stated
salary, on commission or otherwise, to sell such real estate or any
parts thereof in lots or parcels. ‘Real estate salesman’ means any
natural person regularly employed by a real estate broker to perform in
behalf of such broker any or all of the functions of a real estate
broker. One act of a character embraced within the above definition
shall constitute the person performing or attempting to perform the same
real estate broker But the foregoing definitions do not include a
person who shall directly perform any of the acts aforesaid with
reference to his own property, where such acts are performed in the
regular course of or as an incident to the management of such property;
nor shall they apply to persons acting pursuant to a duly executed power
of attorney from the owner authorizing final consumption by performance
of a contract conveying real estate by sale, mortgage or lease; nor
shall they apply to any receiver, trustee or assignee in bankruptcy or
insolvency, or to any person acting pursuant to the order of any court;
nor to a trustee selling under a deed of trust. ‘Real estate dealer’
includes any person engaged in the business of buying, selling,
exchanging, leasing, or renting property, as principal and holding
himself out as a full or part-time dealer in real estate or as an owner
of rental property or properties rented or offered to rent for an
aggregate amount of one thousand pesos or more a year. Any person shall
be considered as engaged in business as real estate dealer by the mere
fact that he is the owner or sublessor of property rented or offered to
rent for an aggregate amount of one thousand pesos or more a year:
Provided, however, That an owner of sugar lands subject to tax under
Commonwealth Act Numbered Five Hundred and Sixty-Seven shall not be
considered as a real estate dealer under this definition.“(f-2) Rectifier comprises every person who rectifies,
purifies, or refines distilled spirits or wines by any process other
than by original and continuous distillation from mash, wort, wash, sap,
or syrup through continuous closed vessels and pipes until the
manufacture thereof is complete. Every wholesale or retail liquor dealer
who has in his possession any still or mash tub, or who keeps any other
apparatus for the purpose of distilling spirits, or in any manner
refining distilled spirits, shall also be regarded as a rectifier and as
being engaged in the business of rectifying.“(g-2) Repacker of wines or distilled spirits includes
all persons who remove wines or distilled spirits from the original
container for repacking and selling the same at wholesale.“(h-2) Restaurant refers to any place which provides food
to the public and accepts orders from them at a price. This term
includes caterers.“(i-2) Retail dealer in fermented liquor includes every
person, except retail dealers in tuba, basi, and tapuy, who for himself
or on commission sells or offers for sale fermented liquor in quantities
of five liters or less at any one time and not for resale.“(j-2) Retail leaf tobacco dealer includes every person
who for himself or on commission sells leaf tobacco or offers the same
for sale to any person except a registered dealer in leaf tobacco or a
manufacturer of cigars, cigarettes, or manufactured tobacco; but the
term does not include a planter or producer so far as concern the sale
of leaf tobacco of his own production.“(k-2) Retail liquor dealer includes every person, except
a retail vino dealer, who for himself or on commission sells or offers
for sale wine or distilled spirits (other than denatured alcohol) in
quantities of five liters or less at any one time and not for resale.“(l-2) Retail vino dealer includes every person who for
himself or on commission sells or offers for sale only domestic
distilled spirits in quantities of five liters or less at any one time
and not for resale.“(m-2) Stockbroker includes all persons whose business it
is, for themselves as such brokers or for other brokers, to negotiate
purchases or sales of stock, bonds, exchange, bullion, coined money,
bank notes, promissory notes, or other securities; but does not include
underwriters for one or more investment companies as defined in the
Investment Company Act. ‘Dealer in securities’ includes all persons who
for their own account arc engaged in the sale of stock, bonds exchange,
bullion, coined money, bank notes, promissory notes, or other
securities.“(n-2) Wholesale dealer in fermented liquors means any
one who for himself or on commission sells or offers for sale fermented
liquors in larger quantities than five liters at any one time, or who
sells or offers for sale such fermented liquors (excluding tuba, basi,
tapuy and similar domestic fermented liquors) for the purpose of resale,
regardless of quantity.“(o-2) Wholesale dealer of distilled spirits and wines comprehends
every person who for himself or on commission sells or offers for sale
wines or distilled spirits in larger quantities than five liters at any
one time, or who sells or offers the same for sale for the purpose of
resale irrespective of quantity.“(p-2) Wholesale tobacco dealer comprehends every person who for
himself or on commission sells or offers for sale cigars, cigarettes or
manufactured tobacco in larger quantities than two hundred cigars,
eight hundred cigarettes or five kilos of manufactured tobacco at any
one time, or who sells or offers the same for the purpose of resale,
regardless of quantity; ‘retail tobacco dealer’ comprehends every person
who for himself or on commission sells or offers for sale not more than
two hundred cigars, not more than eight hundred cigarettes, or not more
than five kilos of manufactured tobacco at any one time and not for
resale.”
SEC. 2. Section 5 of the Local Tax Code shall read as
follows:
“SEC. 5. Common limitations on the taxing powers of
local governments. — The exercise of the taxing powers of provinces,
cities, municipalities and barrios shall extend to the imposition of
the following:“x x x
“(b) Taxes on forest concessions and forest products when sold
domestically by the concessionaire himself;“x x x
“(e) Taxes on the business of transportation contractors and
persons engaged in the transportation of passengers or freight by hire
and common carriers by air, land or water except as otherwise provided
in this Code, and taxes or fees for the registration of motor vehicles
and for the issuance of all kinds of licenses or permits for the driving
thereof;“x x x
“(g) Taxes of any kind on banks and insurance companies except
as otherwise provided in this Code;“x x x
“(k) Taxes or fees on agricultural products when sold by the
farmer, fisherman, poultry- or animal-raiser himself;“(l) Percentage tax on sales;
“(m) Taxes on mines; mining operations; and minerals, mineral
products, and their by-products when sold domestically by the operator;“(n) Taxes on cooperatives duly organized and registered with
the proper government office; and“(o) Taxes of any kind on the national and local governments.”
SEC. 3. Section 7 of the Local Tax Code shall read as
follows:
“SEC. 7. Tax on transfer of real property, ownership.
— The province may impose a tax on the sale, donation, barter, or on
any other mode of transferring ownership or title, of real property at
the rate of not exceeding one-fourth of one percent of the total
consideration involved in the acquisition of the property or its
assessed value, whichever is higher, or in the absence of a specific
consideration, the assessed value of the property.“The transfer of real property ownership pursuant to Republic
Act No. 3844, as amended, shall be exempt from this tax.“The Register of Deeds of the province concerned shall, before
registering any deed, require the presentation of the evidence of
payment of this tax. In appropriate cases, the Provincial Assessor shall
also make the same requirement before cancelling an old tax declaration
and issuing a new one in place thereof. Notaries public shall furnish
the Provincial Treasurer within thirty days from the date of
notarization before him of any deed transferring ownership or title to
any real property with a copy of such deed.“Real property, for purposes of this tax, refers only to lands,
buildings, and machineries intended by the owner of the land or building
for an industry or work which may be carried on in a building or on a
piece of land and which tend directly to meet the needs of the said
industry or works. Buildings refer to all kinds of structure more or
less permanently attached to a piece of land, excluding those which arc
merely superimposed on the soil.“It shall be the duty of the buyer, donee, transferee or heir to
pay the tax herein imposed within one year from the date of the
execution of the deed as regards sale, barter, donation or any other
mode of transferring ownership, or from the date of the decedent’s death
in the case of transfer by succession.”
SEC. 4. Section 10 of the Local Tax Code shall read as
follows:
“SEC. 10. Sand and gravel tax. — The province may
levy and collect a tax of not exceeding seventy-five centavos per cubic
meter of ordinary stones, sand, gravel, earth and other materials
extracted from public and private lands of the Government or from the
beds of seas, lakes, rivers, streams, creeks, and other public waters
within the jurisdiction of the province. The municipality where the
materials are extracted shall share in the proceeds of the tax herein
authorized at a rate of not less than thirty percent thereof as may be
determined by the Provincial Board.“The permit to extract the materials shall be issued by the
Director of Mines or his duly authorized representative and the
extraction thereof shall be governed by regulations issued by the
Director of Mines.”
SEC. 5. The last paragraph of Section 13 of the Local Tax
Code shall read as follows:
“SEC. 13. Amusement tax on admission. — x x x
“x x x
“The taxes hereinabove imposed shall be due and payable within
the first twenty days of the month next following that for which they
are due, by the proprietor, lessee, or operator concerned, and such
taxes to be determined on the basis of a true and complete return of the
amount of gross receipts derived during the preceding month. II the tax
is not paid within the time fixed hereinabove, the taxpayer shall be
subject to such surcharges, interests and penalties prescribed by this
Code. In case of willful neglect to file the return and pay the tax
within the time required or in case fraudulent return is filed or a
false return is willfully made, the taxpayer shall be subject to a
surcharge of fifty percent of the correct amount of the tax due in
addition to the interest and penalties provided by this Code.”
SEC. 6. There is hereby added to the last paragraph of
Section 14 of the Local Tax Code the following provisions:
“SEC. 14. Fees for sealing and licensing of weights
and measures. — The province shall levy fees for the sealing and
licensing of weights and measures in accordance with the following
schedule:” x x x.
“The provincial board shall prescribe the necessary regulations
for the use of such weights and measures. It shall also fix the
penalties for fraudulent practices and unlawful possession or use of
instruments of weights and measures, provided that the penalties thereon
do not exceed those prescribed in Chapter VI, Title VIII, of the
National Internal Revenue Code, as amended. The provincial board may, by
ordinance, authorize the provincial treasurer to settle an offense not
involving the commission of fraud before a case therefor is filed in
court upon payment of a compromise penalty of not less than two hundred
pesos nor more than five hundred pesos.”
SEC. 7. A new Section to be known as Section 15-A is
hereby inserted after Section 15 of the Local Tax Code to read as
follows:
“SEC. 15-A. Annual fixed tax per delivery truck or van
of manufacturers or producers of, or dealers in, certain products. –
Manufacturers or producers of, or dealers in, distilled spirits,
fermented liquors, soft drinks, cigars, and cigarettes delivering or
distributing their products to sales outlets, or selling to consumers,
whether directly or indirectly, within the province shall be subject to
an annual fixed tax of not exceeding, seventy-five pesos per delivery
truck or van payable to the province.“Manufacturers or producers of, or dealers in, products other
than distilled spirits, fermented liquors, soft drinks, cigars, and
cigarettes, delivering or distributing their products to sales outlets,
or selling to consumers, whether directly or indirectly, within the
province shall be subject to an annual fixed tax of not exceeding fifty
pesos per delivery truck or van payable to the province.“The manufacturers, producers, and dealers referred to in the
foregoing paragraphs shall be exempt from the tax on peddlers prescribed
in Section 15 of this Code and from any municipal permit fee or other
regulatory fees. The province, however, may still levy and collect from
said manufacturers, producers, and dealers a permit fee in accordance
with Section 36 of this Code, which in no case shall exceed twenty pesos
per annum regardless of the number of vehicles used by the business
within the province.”
SEC. 8. Paragraph (e) of Section 17 of the Local Tax Code
is hereby amended to read as follows:
“SEC. 17. Specific limitations on power. — Except
as otherwise provided in this Code, the province shall not levy the
following:“x x x
“(e) Municipal fees and charges under Section 20 of this Code,
except those enumerated under numbers 1, 2, 3, 4, 7 and 8 of paragraph
(g) thereof.”
SEC. 9. Paragraphs (a), (b), (c), (d), (e), (g), (h), (m),
(n), (o), and (q) of Section 19 of the Code are hereby modified to read
as follows:
“SEC. 19. Tax on business. — The municipality may
impose taxes on businesses, except on those for which fixed taxes are
provided in this Code:“(a) On manufacturers, importers, or producers of any article of
commerce of whatever kind or nature, including brewers, distillers,
rectifiers, repackers, and compounders of liquors, distilled spirits
and/or wines in accordance with the following schedule:
“With gross sales for the preceding
calendar year in the amount of:
per annumLess than P10,000.00 “For every P500,000.00 in excess of P20,000,000.00 but not
more than P50,000,000.00“For every P500,000.00 in excess of P50,000,000.00 “(A-1) On Retailers, Independent Wholesalers and Distributors In
Accordance With the Following Schedules:
“With gross sales for the preceding
calendar year in the amount of:
per annum“Less than P 1,000.00
than“For every P100,000.00 in excess of P1 million “As used herein, the term Independent Wholesaler means a
person, other than a manufacturer, producer or importer, who buys
commodities for resale to persons other than the end-users regardless of
the quantity of the transaction.“(A-2) On All Exporters In Accordance With the Following
Schedule:
“With gross sales for the preceding
calendar year in the amount of:
per annumBelow P1 million 10 M or more but less than 20M 20 M or more but less than 30M 30 M or more but less than 50M 50 M or more but less than 75M 75 M or more but less than 100M “(A-3) Tax ceilings. — The imposition of the graduated
fixed taxes prescribed in paragraphs A, A-1 and A-2 above shall not
exceed the ceiling prescribed hereunder:
Municipalities
Implementation Up To December 31, 1975,70% of the maximum 55% of the maximum 40% of the maximum 85% of the maximum 70% of the maximum 55% of the maximum
maximum
maximum
maximum“(A-4) Essential commodities. — The tax on the business of
manufacturing, producing, importing, wholesaling, or retailing of the
essential commodities enumerated hereunder shall be one-hall of the
rates that may be prescribed by the local boards or councils under
paragraphs A, A-1, and A-2 in relation with paragraph A-3 above for
other businesses:
- Wheat flour, meat, milk, dairy products, locally manufactured
canned goods and other preserved foodstuffs, sugar, salt and other
agricultural, marine and fresh-water products;- Cooking oil, cooking gas, and firewood;
- Laundry soap, medicine and household remedies;
- Locally manufactured ordinary fabrics;
- Agricultural implements, fertilizers, and insecticides;
- Poultry feeds and other animal feeds; and
- Other commodities covered by the Price Control Law:
Provided, however, That should any commodity mentioned above be no
longer subject to price control, the same shall be taxable at the rates
prescribed in paragraphs A, A-l, and A-2 in relation with paragraph A-3
above.“(A-5) Rice and corn. — The tax on the business of
importing, wholesaling, or retailing of, or dealing in, rice and corn,
including rice and corn millers also engaged in the wholesaling or
retailing of said cereals, shall be one-fourth of the maximum rates
prescribed under paragraph A-1 above and shall be uniform for all
classes of municipalities as an exception to paragraph A-3 above.“(A-6) Situs of the tax. — For purposes of collection of
this tax, manufacturers and producers maintaining or operating branch or
sales offices elsewhere shall record the sale in the branch or sales
office making the sale and the tax thereon shall accrue to the local
government where the branch or sales office is located. In eases where
there is no such branch or sales office in the locality where the sale
is effected, the sale shall be duly recorded in the principal office
along with the sales made in said principal office. Sixty percent of all
sales recorded in the principal office shall be taxable by the local
government where the principal office is located, while the remaining
forty percent shall be deemed as sales made in the factory and shall be
taxable by the local government where the factory is located.In cases where a manufacturer or producer has two or more
facilities situated in different localities, the forty percent sales
allocation mentioned in the next preceding paragraph shall be prorated
among the localities where the factories are situated in proportion to
their respective volumes of production during the period for which the
tax is due.The foregoing sales allocation shall be applied irrespective of
whether or not sales are made in the locality where the factory is
situated.“(b) On cafes, cafeterias, ice cream and other refreshment
parlors, restaurants, soda fountain bars, carinderias or food caterers:
receipts for the preceding
calendar year in the amount of:
per annum“(c) On all business establishments principally rendering or
offering to render services, x x x ;“Shops for planning or surfacing and recutting of lumber and
sawmills under contract to saw or cut logs belonging to others; dyeing
establishments; milliners and hatters; blacksmiths; slendering and body
building saloons; furniture repair shops; shoe repair shops; house
and/or sign painters;“Business agents and other independent contractors (juridical or
natural) not included among individuals subject to the occupation tax
under Section 12 of this Code, and whose activity consists essentially
of the sale of all kinds of services for a fee;“General engineering, general building, and specialty
contractors, filling, demolition and salvage work contractors and
proprietors or operators of bulldozers and other heavy equipment made
available to others for considerations; persons engaged in the
installation of water system, and gas or electric light, heat or power;
proprietor or operators of smelting plants, engraving plants and plating
establishments;“Stevedoring; arrastre services;
“Commercial and immigration brokers; and cinematographic film
owners, lessors or distributors;
preceding
calendar
year in
the amount of:
per annum“Less than P5,000.00
P10,000.00
15,000.00
20,000.00
30,000.00
40,000.00
50,000.00
75,000.00
100,000.00
150,000.00
200,000.00
250,000.00
300,000.00
400,000.00
500,000.00
excess of P500,000.00“(C-1) Should a contractor undertake to furnish the materials and
labor in the construction work, the costs of such materials and labor
shall be deducted from his gross receipts for the purpose of determining
the tax due from him under paragraph (C) above.“General Provisions. —
“In the case of a newly started business falling under
paragraphs A, A-l, A-2, B or C provided hereinabove, the tax shall be
fixed by the quarter. The initial tax for the quarter in which the
business starts to operate shall not exceed one-fourth of one-tenth of
one percent of the capital investment.However, in the succeeding quarter or quarters, in case the
business opens before the last quarter of the year, the tax shall be
based on the gross sales for the preceding quarter of one-fourth of the
rate fixed therefor by the pertinent schedule as may be applied in
relation with paragraphs A-3, A-4 and A-5 above. In the succeeding
calendar year, regardless of when the business started to operate, the
tax shall be based on the gross sales for the preceding calendar year,
or any fraction thereof, as provided by the same schedule.“In cases where a person conducts or operates two or more of the
related businesses mentioned in any one of said paragraphs A, A-l, A-2,
B or C, which are subject to the same rate of imposition, the
computation of the tax shall be based on the combined total gross sales
of the said two or more related businesses.“In cases where a person operates any of the businesses
mentioned in any one of paragraphs A, A-l, A-2, B or C above together
with any of the businesses for which fixed taxes are provided in this
Code, the sales or receipts of the latter shall not be included in the
sales or receipts of the former for the purpose of computing the taxes
due under said paragraphs.“A business subject to the graduated fixed tax based on gross
sales and/or receipts shall, upon termination thereof, submit a sworn
statement of its gross sales and/or receipts for the current year. If
the tax paid during the year be less than the tax due on said current
year gross sales and/or receipts, the difference shall be paid before
the business is considered officially retired.Special Provisions
“Tax Credit. — In cases where the tax imposed on any
business exceeded 70% of the maximum rate prescribed therefor under
Section 19(A) as originally provided in this Code, tax credit shall be
granted to the taxpayer who has paid at least the full amount of the
first quarter installment for the calendar year 1974. The tax credit
herein granted shall be applied to future business tax obligation of the
same taxpayer in not more than four equal quarterly installments as may
be judiciously determined by the Secretary of Finance who shall, for
this purpose, prepare and publish an appropriate schedule therefor upon
promulgation of this Decree.“In no case, however, shall tax. credit be given to a taxpayer
if the amount of the annual or quarterly tax paid by him during the
first quarter of calendar year 1974 is equal to, or less than, the
annual tax or the highest quarterly tax, as the case may be, paid by him
for the same business in calendar year 1973.“Any remaining portion of the tax credit herein granted shall be
forfeited in favor of the municipality in the event the business
terminates operations within the locality. As soon as the total amount
credited to the taxpayer pursuant hereto shall have been fully applied,
this provision shall no longer apply.“For purposes hereof, the taxpayer shall file with the local
treasurer a claim in writing duly supported by evidence of payment on or
before June 30, 1974, after which date no claim for tax credit shall be
entertained.“(d) On the business of dealers in fermented liquors, distilled
spirits and/or wines:
per annumWholesale dealers in foreign liquors Wholesale dealers in domestic liquors Retail dealers in foreign liquors Retail dealers in domestic liquors Retail dealers in vino liquors Retail dealers in fermented liquors Wholesale dealers in fermented liquors Retail dealers in tuba, basi and/or tapuy “(e) Tax on tobacco dealers:
Retail leaf tobacco dealers Wholesale leaf tobacco dealers Retail tobacco dealers Wholesale tobacco dealers “(f) x x x
“(g) On the amusement places wherein the customers thereof actively
participate without making bets or wagers, including but not limited to,
the following:x x x
“(12) Theaters and cinema houses:
With balcony and orchestra with seating
capacity of less than 500 personsx x x
“Plus: Amusement tax of P0.05 per admission
payable to the municipal treasurer within twenty days next following the
month for which the tax is due as regards operators with fixed
establishment and within ten days next following business day with
respect to itinerant operators.“(h) Tax on pawnshops, money shops, lending investors, finance
and investment companies, insurance companies, and banks, any provision
of special laws to the contrary notwithstanding, except the Central Bank
of the Philippines:
Pawnshops With capital of —
per annumLess than P50,000.00 P50,000.00 or more but less than P100.000.00 P100,000.00 or more but less than P200,000.00 P200,000.00 or more Money shops Lending investors Finance and investment companies: Principal office For each branch, payable to the municipality where the
branch is locatedInsurance companies: Principal office For each branch, payable to the municipality where the
branch is locatedCommercial banks: Principal office For each branch, payable to the municipality where the
branch is locatedSavings Bank: Principal office For each branch, payable to the municipality where the
branch is locatedRural Banks “(i) X X X
“(j) X X X
“(k) X X X
“(l) X X X
“(m) On real estate dealers:X X X
Lessors of real estate based on gross receipts
for the preceding year, at rates not exceeding the following:Less than P1,000.00 “For every P1,000.00 in excess of P50,000.00 for real
property used for purposes other than residential“For every P5,000.00 in excess of P50,000.00 for real
property used for residential purposes“(n) On golf links, P3,000.00 per annum
“(o) On fishponds, fishpens, or fish breeding grounds, per hectare
or fraction thereof, P10.00 per annum
“(p) x x x
“(q) Taxes on billboards, signboards and advertisements:x x x
“In addition to the taxes provided above under items (1) to (5),
inclusive, for the use of electric or neon lights in billboards per
square meter or portion thereof — P10.00.”
SEC. 10. There are hereby inserted new paragraphs after
paragraph (q) of Section 19 of the Code to be known as paragraphs (r)
and (s) which shall read as follows:
“(r) Tax on the business of operating privately owned public
markets based on gross receipts for the preceding quarter at the
following rates:
“Less than P5,000.00
than P10,000.00
than 20,000.00
than 30,000.00
than 40,000.00
than 50,000.00
more but less than 60,000.00
than 70,000.00
than 80,000.00
than 90,000.00
than 100,000.00“For every P1,000.00 in excess of P100,000.00 “In the case of newly started privately owned public market,
the tax shall not be less than the minimum of P125.00 prescribed above
for the initial quarter of operations,“(s) Operators or owners of rice or corn mills engaged mainly in
the milling of rice and corn belonging to other persons shall be
subject to annual graduated fixed tax based upon total capacity per
machine in accordance with the following schedule:
“Corn mill, not exceeding one hundred cavans per
twelve-hour capacity“Corn mill, exceeding one hundred cavans per twelve-hour
capacity” ‘Kiskisan’ type, not exceeding one hundred cavans of palay
per twelve-hour capacity” ‘Kiskisan’ type, exceeding one hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding one hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding two hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding three hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding four hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding five hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding six hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding seven hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding eight hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding nine hundred cavans of palay per
twelve-hour capacity” ‘Cono’ of not exceeding one thousand cavans of palay per
twelve-hour capacity” ‘Cono’ of over one thousand cavans of palay per
twelve-hour capacity
SEC. 11. Paragraph (c) of Section 21 of the Code shall read
as follows:
“SEC. 21. Fishery rental or fees. — x x x
x x x”
(c) Issuance of individual licenses in case no
bidders opt to lease fishing zone. — x x x
“(1) Fish corrals erected in the sea: Less than 3 meters deep 3 meters deep or more but less than 5 meters deep 5 meters deep or more but less than 8 meters deep 8 meters deep or more but less than 10 meters deep 10 meters deep or more but less than 15 meters deep 15 meters deep or more “(4) Fish corrals or fishpens in inland fresh waters: With an area of less than 500 square meters With an area of 500 square meters or more but less than
1,000 square metersWith an area of 1,000 square meters or more but less than
5,000 square metersWith an area of 5,000 square meters or more but less than
10,000 square metersWith an area of 10,000 square meters or more
SEC. 12. Section 23 of the Code shall read as follows:
“SEC. 23. Scope of power. — Except as otherwise
provided in this Code, the city may levy and collect, among others, any
of the taxes, fees and other impositions that the province or the
municipality may levy and collect. The exercise of the taxing powers of
the city extends to the taxes, fees and other impositions mentioned in
Sections 12, 13, 14, 15, 15-A and 16 of this Code which the city shall
also impose and collect, to the exclusion of the national and municipal
governments.“The rates of the taxes, or other impositions that the city
shall fix may exceed the maximum rates allowed for the province or
municipality by not more than fifty percent, except the rates of the
taxes and fees provided in Sections 12, 13, 14, 15-A, and 19(A-5) in
Chapter II of this Code which shall be uniform for the city and the
province or municipality, as the case may be.“‘Tax ceilings. — The imposition of the graduated fixed
taxes provided for under paragraphs A, A-l, A-2 and A-4, all of Section
19 of the Code as herein amended, as read in relation with this Section,
shall not exceed the ceilings prescribed hereunder:
& 3rd class
Implementation Up to December 31, 1975,70% of the maximum 55% of the maximum 85% of the maximum 70% of the maximum
maximum
maximum“(b) Situs of the tax. — For purposes of collection of
the tax on the businesses mentioned in paragraphs A, A-1, A-2, A-4 and
A-5, all of Section 19 of the Code as herein amended, as read in
relation with this Section, the provisions of paragraph A-6 of this Code
also as herein amended shall apply.“The general provisions under Section 19 of this Code as herein
amended pertaining to newly started businesses; related businesses
falling under paragraphs A, A-1, A-2, B or C of Section 19
aforementioned; those subject to graduated rates operated along with
businesses subject to fixed rates; and those terminating their
operations during the current year, us well as the special provisions
for tax credits, shall likewise apply to chartered fides. However, in
the case of a newly started business, the city may exceed by not more
than fifty percent the maximum rate prescribed for newly started
businesses under Section 19 of this Code, as amended.“Thirty percent of the percentage taxes on sales pertaining to
the first quarter of the calendar year 1974 that may have been collected
by cities under Section 23 of the Code as originally provided if they
have imposed the maximum of one and two percent of the sales of
essential and nonessential commodities, respectively, shall be granted
as tax credits to the taxpayers concerned. In the application of the
said tax credits to the future business tax obligations of the same
taxpayers, all the special provisions under Section 19 of the Code as
herein amended shall also govern.”
SEC. 13. Section 24 of the Code shall read as follows:
“SEC. 24. Additional taxing powers. —
The city may levy any tax, fee or other imposition not specifically
enumerated or otherwise provided for in this Code, subject to the
provisions of Sections 49 and 50 of this Code as herein amended.”
SEC. 14. Section 25 of the Code shall read as follows:
“SEC. 25. Specific limitation on power. — Except
as otherwise provided in this Code, the city shall not levy the taxes
and other impositions enumerated in Section 5, Chapter I of this Code as
herein amended.”
SEC. 15. Paragraph (a) of Section 27 of the Code shall read
as follows:
“SEC. 27. Taxes and fees. — x x x
“(a) Stores or retailers with fixed business establishments
whose capital investment is five thousand pesos or less, signs,
signboards, and billboards displayed or maintained in any place exposed
to public view, except those displayed at the place where the profession
or business advertised is conducted.”
SEC. 16. Paragraph (d) of Section 30 of the Code shall read
as follows:
“SEC. 30. Market Fees. — x x x
“(d) Market entrance fee. — In lieu of the regular market
fees based on the space occupied, a market entrance fee may be imposed
on all transient vendors of any commodity or merchandise being brought
into the public market for sale on the basis of weight, bundle, sack,
can, cartload, or any convenient unit of measure. The amount of entrance
fee to be imposed shall not exceed the amount of market fee that would
be collectible if the fee were charged on the basis of space occupied by
the said commodity or merchandise, as provided in the preceding
Subsection.”
SEC. 17. Paragraphs (a) and (d) of Section 31 of the Code
shall read as follows:
“SEC. 31. Slaughterhouse fees. — x x x
“(a) Permit fee to slaughter. — Before any animal is
slaughtered for public consumption, a permit therefor shall be secured
from the health officer concerned or his duly authorized representative
thru the treasurer and the corresponding fee collected at a reasonable
rate to be fixed by the local board or council.”
x x x
“(d) Requirements for the issuance of a permit for the
slaughter of large cattle. — Upon issuance of the permit required in
subsection (c) of this Section, large cattle shall be slaughtered at
the city/municipal slaughterhouse or in any other place as may be
authorized in the local ordinance. Before the issuance of the permit for
the slaughter of large cattle, the treasurer shall require for branded
cattle the production of the certificate of ownership if the owner is
the applicant, or the original certificate of ownership and the
certificate of transfer showing title in the name of the person applying
for the permit if he is not the original owner.”
SEC. 18. Section 42 of the Code shall read as follows:
“SEC. 42. Effectivity of tax ordinance. — A tax
ordinance shall go into effect on the fifteenth day after its approval
by the local chief executive in accordance with Section 41 of this
Code.”
SEC. 19. Section 49 of the Code is amended to read as
follows:
“SEC. 49. Similar tax or fee not specifically
enumerated. — The local board or council may exercise the power to
impose a tax or fee on a tax base or subject similar to those authorized
in this Code but which may not have been specifically enumerated
herein, the rate of which shall in no case exceed that fixed for the
similar tax base or subject. No ordinance, however, imposing such a tax
or fee shall be enacted without any public hearing having been held for
the purpose. The Secretary of Finance shall within six months from the
date of receipt of copy of the ordinance review the same and the tax or
fee therein imposed shall accrue, should the ordinance be approved by
the Secretary of Finance, at such date as may be determined and fixed by
him.”
SEC. 20. Section 50 of the Code shall read as follows:
“SEC. 50. Tax or fee not provided for. — Where the
tux base or tax subject is not similar or comparable to any tax base or
subject specifically mentioned or otherwise provided for in this Code,
the local board or council may impose a tax, fee or other imposition
thereon. No ordinance, however, imposing such a tax or fee shall be
enacted without any public hearing having been held for the purpose. The
Secretary of Finance shall within six months from the date of receipt
of copy of the ordinance review the same and the tax or fee therein
imposed shall accrue, should the ordinance be approved by the Secretary
of Finance, at such date as may be determined and fixed by him.”
SEC. 21. Section 54 of the Code shall read as follows:
“SEC. 54. Accrual of the tax. — All local taxes
shall accrue on the first day of January of each year as regards
subjects then liable therefor, but an entirely new tax, or any change in
the rate of an existing tax, provided by an ordinance enacted during
the current year shall accrue at the beginning of the quarter next
following the date of effectivity of the ordinance as provided in
Section 42 of this Code.”
SEC. 22. Section 59 of the Code shall read as follows:
“SEC. 59. Examination of books of accounts and
pertinent records of businessmen by provincial or city treasurer. — x
x x Such examination shall be made during regular business hours, not
oftener than once every year for each business establishment. XXX”x x x
“For this purpose, the forms to be used by the provincial or
city treasurer or his duly authorized deputy shall be prescribed by the
Secretary of Finance.”
SEC. 23. For the proper implementation of the provisions of
the Local Tax Code as herein amended, special transitory provisions arc
hereby promulgated to read as follows:
“SEC. 64-A. Special transitory provisions. — In
view of the adjustment of the tax rates under paragraphs A, A-l and A-2
and the provisions of paragraph A-3, all of Section 19 of the Code as
herein amended, the taxes, including the percentage taxes, that shall be
collectible by municipalities and cities for the quarter beginning
April 1, 1974 from the businesses covered by Section 19 (A) as
originally provided in this Code shall be as what may be judiciously
determined and fixed in an appropriate circular by the Secretary of
Finance, unless the local tax ordinance in force has fixed a lower rate,
in which case the lower rate shall prevail and be collectible. For this
purpose, all existing tax ordinances of cities and municipalities
imposing taxes on the businesses herein mentioned at rates higher than
what may be fixed therefor by the Secretary of Finance as herein
provided are hereby deemed accordingly adjusted by operation of law.
Local tax ordinances, however, whose enforcement has been extended up to
June 30, 1974 by the Secretary of Finance, pursuant to the provisions
of Section 64 of the Code, shall not be affected and shall continue to
be enforceable until June 30, 1974.“The taxes hereinabove treated corresponding to the quarter
beginning April 1, 1974 shall be paid not later than May 31, 1974 as an
exception to the provisions of Section 55 of the Code.“All existing tax ordinances of provinces, cities,
municipalities and barrios shall be deemed ipso facto nullified
on June 30, 1974.“The local boards or councils shall upon promulgation of this
Decree enact their respective tax ordinances pursuant to the provisions
of the Local Tax Code as herein amended, to take effect not earlier than
July 1, 1974 in conformity with the pertinent general administration
provisions under Chapter III thereof.”
SEC. 24. Effectivity. — This Decree shall take
effect upon its approval. All laws, acts, decrees, executive orders,
proclamations and/or administrative regulations, or part or parts
thereof which are inconsistent herewith are hereby repealed and/or
modified accordingly.
Done in the City of Manila, this 30th day of March, in the
year of Our Lord, nineteen hundred and seventy-four.
|
(Sgd.)
|
FERDINAND E. MARCOS | ||||||
| President of the Philippines | |||||||
|
|
By the President: | ||||||
|
(Sgd.)
|
ALEJANDRO MELCHOR | ||||||
| Executive Secretary | |||||||