EXECUTIVE ORDER NO. 437, November 23, 1990
INCREASING THE TAX ON RENTALS, CHARTER AND OTHER FEES EARNED BY NON-RESIDENT LESSORS OF AIRCRAFT FROM 7.5% TO 8.5% PURSUANT TO SUBPARAGRAPH 4, SECTION 25 (B) OF THE NATIONAL INT…
WHEREAS, to lessen the regressivity of the income tax system, the present 7.5% preferential tax on rental income of non-resident lessors on teased aircraft should be increased;
WHEREAS, since the common carrier’s tax of 2%, which has been one of the bases of the 7.5% preferential tax rate, has been increased by one percentage point by virtue of Presidential Decree No. 1959 in 1984;
WHEREAS, increasing the tax rate still maintains the preferential tax treatment of said income vis-a-vis the normal tax rate of 35% imposed on other corporate incomes;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by law, do hereby order:
SECTION 1. The rate of 8.5% shall be imposed on rentals, charter and other fees derived by non-resident lessors of aircraft.
SEC. 2. The rate of 7.5% shall remain imposed on rentals and other fees derived by non-resident lessors of machineries and other equipment.
SEC. 3. This Executive Order shall take effect two (2) days following the completion of its publication in a national newspaper of general circulation.
DONE in the City of Manila, this 23rd day of November, in the year of our Lord, nineteen hundred and ninety.
By the President:
(Sgd.) CATALINO MACARAIG, JR.
Executive Secretary