PRESIDENTIAL DECREE NO. 1959, October 10, 1984
AMENDING CERTAIN SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED.
emergency which affects the stability of the nation and requires immediate
action;
WHEREAS, the issuance of this decree is an essential and
necessary component of the national economic recovery-program formulated to meet
and overcome the emergency.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Republic of the Philippines, by virtue of the powers vested in me by the
Constitution do hereby decree and order:
SECTION 1. A new Subsection (y) is inserted in Section 20 of
the National Internal Revenue Code to read as follows:
“(y) ‘Deposit substitutes’ shall means an alternative form of obtaining funds
from the public, other than deposits, through the issuance, endorsement, or
acceptance of debt instruments for the borrower’s own account, for the purpose
of relending or purchasing of receivables and other obligations, or financing
their own needs or the needs of their agent or dealer. These promissory notes,
repurchase agreements, certificates of assignment or participation and similar
instrument with recourse as may be authorized by the Central Bank of the
Philippines, for banks and non-bank financial intermediaries or by the
Securities and Exchange Commission of the Philippines for commercial,
industrial, finance companies and ether non-financial companies: Provided,
however, that only debt instruments issued for inter-bank call loans to
cover deficiency in reserves against deposit liabilities including those between
or among banks and quasi-banks shall not be considered as deposit substitute
debt instruments.”
SEC. 2. Section 21 (d) of this Code, as amended, is hereby
further amended to read as follows:
“(d) On interest from bank deposits and yield or any other monetary benefit
from- deposit substitutes and from trust fund and similar arrangements.—
Interest from Philippine Currency Bank deposits and yield or any other monetary
benefit from deposit substitutes and from trust fund and similar arrangements
whether received by citizens of the Philippines or by resident alien
individuals, shall be subject to a 15% final tax to be collected and paid as
provided in Sections 53 and 54 of this Code.”
SEC. 3. Section 24 (cc) of this Code, as amended, is hereby
further amended to read as follows:
“(cc) Rates of tax on interest from deposits and yield or any other monetary
benefit from deposit substitutes and from trust fund and similar
arrangements.—Interest on Philippine Currency Bank deposits and yield or any
other monetary benefit from deposit substitutes and from trust fund and similar
arrangements received by domestic or resident foreign corporations shall be
subject to a 15% final tax to be collected and paid as provided in
Section 53 and 54 of this Code.”
SEC. 4. Section 53 (d) (1) of this Code is hereby amended to
read as follows:
“Sec. 53 (d) (1). Withholding of Final Tax.—Every
bank or non-bank financial intermediary or commercial, industrial, finance
companies, and other non-financial companies authorized by the Securities and
Exchange Commission to issue deposit substitutes shall deduct and withhold from
the interest on bank deposits or yield or any other monetary benefit from
deposit substitutes a final tax equal to fifteen per centum (15%) of the
interest on deposits or yield or any other monetary benefit from deposit
substitutes and from trust fund and similar arrangements.”
SEC. 5. A new subsection (q) is hereby added to Section 54
of this Code, as amended to read as follows:
“(q) All taxes withheld pursuant to the provisions of this Code and its
implementing regulations are hereby considered trust funds and shall be
maintained in a separate account and not coming-led with any other funds of the
withholding- agent.“Any violations of this provision shall be subject to the surcharges and
penalties prescribed in paragraph (b) of this Section.:
SEC. 6. Section 145 of this Code, as amended, is further
amended to read as follows:
“Sec. 145. Specific tax on distilled spirits.—On
distilled spirits there shall be collected, subject to the provisions of See.
139 of this Code, exc2pt as hereinafter provided, specific taxes as
follows:“(a) If produced from the sap of nipa, coconut, cassava, camote or buri palm
or from the juice, syrup or sugar of the cane, per proof liter, five pesos;
Provided, that such materials are produced commercially in the country
where they are processed into distilled spirits; Provided, further,
That if produced in a pot still or other similar primary distilling
apparatus by a distiller producing not more than one hundred liters a day,
containing not more than fifty per centum of alcohol by volume, per proof liter,
one peso and fifty six centavos.”“(b) If produced from raw materials other than (a) hereof, per proof liter,
thirty-five pesos.”“This tax shall be proportionally increased for any strength of the spirits
taxed over proof spirits, and the tax shall attach to the substance as soon as
it is in existence as such, whether it be subsequently separated as pure or
impure spirits immediately or at any subsequent time transformed into any other
substance either in the process of original, production or by the subsequent
process.“Spirits or distilled spirits” is the substance known as ethyl alcohol,
ethanol or spirits of wine, including all dilutions and mixture thereof, from
whatever source by whatever process produced, and shall include whisky brandy,
rum, gin and vodka, and other similar products or mixture including compounded
liquors and all other preparations, except toilet preparations, of which
excluding water distilled “spirits is the chief ingredient.“Proof spirits” is liquor containing one-half of its volume of alcohol of a
specific gravity of seven thousand nine hundred and thirty-nine ten thousandths
at fifteen decrees centigrade. A proof liter means a liter of proof
spirits.”
SEC. 7. Section 147 of this Code, as amended-, is hereby
further amended to read as follows:
SEC. 147. Specific and Ad Valorem Tax on Fermented
Liquors. (A) Specific Tax.—On beer, lager, beer, ale, porter and other
fermented liquors (except tuba, tapuy, and similar domestic fermented liquors),
there shall be collected on each liter of volume capacity, two pesos ten
centavos.
(B) Ad Valorem Tax.—In addition to the specific tax herein imposed,
there shall be levied, assessed and collected an ad valorem tax equivalent to
twenty percent (20) of the brewer’s or importer’s gross selling price, net of
specific, tax, of the products enumerated under sub-section (a) hereof, to be
removed from the brewery or other place of manufacture or to be released from
customs custody which shall be paid by the brewer or importer, as the case may
be, at the same time as the specific tax.”“The provisions of Section 186-A hereof governing the determination of the
gross selling price should likewise apply in the determination of the gross
selling price of fermented liquor together with all the administrative
requirements prescribed therein and subject to the same penalties therein
imposed:
SEC. 8. Section 151 of this Code, as amended, is
hereby-further amended to read as follows:
“Sec. 151. Specific ad valorem tax on matches.—
There shall be levied, assessed and collected an ad valorem tax equivalent to
ten per cent (10%) of the manufacturer’s or importer’s gross selling price of
matches to be removed from the place of manufacture or to be released from
customs custody, which shall be paid by the manufacturer or importer, as the
case may be, before such removal.”“The provisions of Section 186-A hereof governing the determination of the
gross selling price should likewise apply in the determination of the gross
selling price of matches together with all the administrative requirements
prescribed therein and subject to title same penalties therein
imposed:
SEC. 9. Section 157 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 157. Specific tax on cinematographic films.—
There shall be collected, once only, on cinematographic films, including
television films, regardless of width, the provisions of existing laws to the
contrary notwithstanding, a tax amounting to seventy centavos per linear
meter.“Educational films, cinematographic films used for visual education, whether
manufactured in the Philippines or imported, shall be exempt from the tax
prescribed in this section.”“This tax shall not be collected on any tax-paid cinematographic film
subsequently returned to the Philippines or on any negative; film or unprinted
positive film, and on any reversal film used in amateur photography of sixteen
millimeter or less, and any tax heretofore paid on cinematographic films so
returned, or on any negative film or unprinted positive film, or on any reversal
film shall be refunded subject to the provisions of Section two hundred
ninety-five of the Tax Code.”
SEC. 10. Section 158 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 158. Specific tax on saccharine.—On
saccharine, sodium saccharine and all its derivatives or salts of saccharine and
other artificial sweetening agents, there shall be collected a tax of one
hundred twenty five pesos per kilogram” the discovery of the falsity or fraud, a
surcharge of fifty per centum of its amount and the entire unpaid amount shall
be subject to interest at the rate of twenty per centum per annum. The amount so
added to any tax shall be collected at the same time and in the same manner and
as part of the tax unless the tax has been paid before the discovery of the
falsity or fraud, in which case the amount so added shall be collected in the
same manner as the tax.“(b) Sales tax on imported articles.—When the articles are imported,
the percentage taxes established in Sections 194, 195, 196, 197, 198, 199 and
201 of this Code shall be paid in advance by the importer, in accordance with
the regulations promulgated by the Minister of Finance and prior to the release
of such articles from Bureau of Customs’ custody, based on the home consumption
value or price (excluding internal revenue excise taxes) thereof, plus ten (10%)
per cent of such home consumption value or price, including postage, commission,
customs duty and all similar charges, except freight and insurance, to be
declared in an importer’s return, plus twenty-five per centum of the total value
of such articles. The tax imposed in this section shall not apply to articles to
be used by the importer himself in the manufacture or preparation of articles
subject to specific tax: Provided, however, That where the National
Economic and Development Authority certifies to the availability of local raw
materials of sufficient quantity, comparable quality and price to meet the needs
of manufacturers subject to specific tax the importation of such raw materials
shall be subject to the tax herein imposed.“(c) Value-added Tax.—The provisions of this Title to the contrary
notwithstanding, when the public interest so requires, the President upon
recommendation of the Minister of Finance, may subject the second sale of any
article taxable under this Title to a value-added tax at the rates not exceeding
fifty per cent (50 %) based on the gross selling price or gross value of any of
the article sold, bartered, exchanged or transferred, less the cost of the
article.”
SEC. 12. Section 203 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 203. Percentage tax upon proprietors or operators of
rope factories, sugar centrals and mills, coconut oil mills, cassava mills, and
desiccated coconut factories.—Proprietors or operators of rope factories, sugar
centrals and mills, coconut oil mills, cassava mills.
SEC. 11. Section 193 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 193. Payment of percentage taxes.— “(a)
In general.—(1) Declaration and payment of quarterly gross sales,
receipts, etc.—Unless otherwise specifically provided, it shall be the
duty of every person conducting a business on which a percentage tax is imposed
under this Title, to render a quarterly declaration of the amount of his, her or
its gross sales, receipts or earnings or gross value of output actually removed
from the factory or mill warehouse and to compute the tax due thereon.
“For
each quarter of the taxable year, the tax so computed shall be decreased by the
sum of the tax credits allowed under this Title. The tax due shall be paid not
later than twenty day & following the close of each quarter:
Provided, That any person retiring from a business subject to the
percentage tax shall notify the nearest internal revenue officer, file his
return or declaration and pay the tax due thereon within twenty days after
closing- his business.“For purposes of this Section, sales on consignment shall be considered
actually sold on the day of sale or sixty days after the date consigned,
whichever is earlier.“(2) Where to file.—Except in cases where the Commissioner otherwise
permits, the percentage tax returns required to be filed in the preceding
paragraps shall be filed with the Revenue District Officer, Collection Agent, or
duly authorized Treasurer of the municipality in which such person has his legal
residence or principal place of business in the Philippines.“(3) Ad valorem penalties.—
“(i) Failure to file and pay the tax.—If the percentage tax return
is filed with a person, other than that mentioned in the preceding subparagraph
or if the percentage tax on any business is not paid within the time specified
above, the amount of the tax shall be increased by twenty-five per centum, the
increment to be a part of the tax and the entire unpaid amount shall be subject
to interest at the rate of twenty per centum per annum.“(ii) Willful neglect to file, or filing false or fraudulent
return.—In case of willful neglect to file the return within the period
prescribed herein, or in case a false or fraudulent return is willfully made,
there shall be added to the tax or to the1 deficiency tax in case any payment
has been made on the basis of such return before and desiccated coconut
factories, shall pay a tax equivalent to three (3%) Per centum of the gross
value in money of all the rope, sugar, coconut oil, cassava flour or starch,
desiccated coconut, manufactured, processed or milled by them, including the
by-product of the raw materials from which said articles are produced,
processed, or manufactured, such tax to be based on the actual selling price or
market value of these articles at the time they leave the factory or mill
warehouse: Provided, however, That this tax shall not apply to rope,
coconut oil, and the by-product of copra from which it is produced or
manufactured, and desiccated coconuts, if such rope, coconut oil, copra
by-products and desiccated coconuts, shall be removed for exportation and are
actually exported without returning to the Philippines, whether so exported in
their original state, or as an ingredient or part of any-manufactured article or
product.
In case the raw materials are processed, manufactured or milled in pursuance
of a contract where the factory, central, or mill receives a share of the
finished products, the tax on the share pertaining to the planter or owner of
the raw materials shall be charged to the planter or owner and withheld by the
proprietor or operator of the factory, central, or mill and paid by him to the
Commissioner.
A proprietor or operator of a refined sugar factory shall be subject to the
tax imposed by this section but any percentage tax paid under this section on
the raw sugar shall be credited against the tax due on the refined sugar.
Where articles are manufactured out of materials subject to tax under this
section, the percentage tax paid herein shall be credited against the sales tax
due on the finished product.
SEC. 13. Section 205 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 205. ‘Contractors, proprietors or operators of
dockyards, and others.—A contractor’s tax of four (4%) per centum of the
gross receipts is hereby imposed on the following:
- General engineering, general building, and specially contractors as defined
in Republic Act Number 4566; - Filling, demolition and salvage work contractors, and proprietors or
operators of mine drilling apparatus; - Proprietors or operators of dockyards;
- Persons engaged in the installation of water systems and gas or electric
light, heat, power; - Proprietors or operators of smelting plants, engraving plants, plating
establishments, and plastic lamination establishments; - Proprietors or operators of establishments for upholstering, washing or
greasing of motor vehicles, vulcanizing, recapping and battery charging; - Proprietors or operators of establishments for planning or surfacing and
recutting of lumber, and sawmills under contract to saw or cut logs belonging to
others; - Proprietors or operators of dry-cleaning or dyeing establishments, steam
laundries, and laundries using washing machines; - Proprietors or owners of shops for the repair of any kind of bicycles,
mechanical and electrical devices, instruments, apparatus or furniture and shoe
repairing by machine or any mechanical contrivance; - Proprietors or operators of establishments or lots for parking purposes;
- Proprietors or operators of tailor shops, dress shops, milliners and
hatters, beauty parlors, barbershops, massage clinics, sauna turkish, and
Swedish baths, slendering and body building saloons and similar establishments,
photographic studio, and funeral parlors; - Proprietors or operators of hotels, motels and lodging houses;
- Proprietors or operators of arrastre and stevedoring, warehousing, for
forwarding establishments ; - Registered master plumbers, smiths, and house or sign painters;
- Printers, bookbinders, lithographers and publishers except those engaged in
the publication of printing and publication of any newspaper, magazine, review
or bulletin which appears at regular intervals, with fixed prices for
subscription and sale and which is not devoted principally to the publication of
advertisements ; - Business agents and other independent contractors, including private
detective or watchman agencies, except gross receipts of a pioneer enterprise
registered with the Board of Investments under PD 1789, as amended by BP 391 ; - Lessors of personal property, except nonresident owners of property subject
to the final tax under Section 24 (b)
(vii) of this Code.
The term “independent contractors” includes persons (juridical or natural)
not enumerated above (but not including individuals subjects to the occupation
tax under Section 12 of the Local Tax Code) whose activity consists essentially
of the sale of all kinds of services for a fee regardless of whether or not the
performance of the service calls for the exercise or use of the physical or
mental faculties of such contractors or their employees.
The term “independent contractor” shall not include regional or area
headquarters established in the Philippines by multinational corporations,
including their alien executives, and which headquarters do not earn or derive
income from the Philippines and which act as supervisory, communications and
coordinating centers for their affiliates, subsidiaries or branches in the
Asia-Pacific Region.
The term “gross receipts” means all amounts received by the prime or
principal contractor as the total contract price, undiminished by any amount
paid to the sub-contractor under a sub-contract arrangement. Any portion of the
total contract price which is paid to the subcontractor, shall be excluded from
the taxable gross receipts of the sub-contractor.
SEC. 14. Section 205-A of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 205-A. Percentage tax on hotels,, motels and
others.—There is hereby imposed on proprietors, operator or keepers of
hotels, motels, resthouses pension houses, lodging houses and resorts, a tax
equivalent to twelve (12%) percent of their gross receipts derived from room
occupancy: Provided, That the foregoing tax shall be in lieu of the
contractor’s and the documentary stamp tax under Sections 205(12) and 238(b) of
the National Internal Revenue Code of 1977, respectively..”
SEC. 15. Section 206 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 206. Caterers,—A caterer’s tax is hereby
imposed as follows:(1) On proprietors or operators of restaurants, refreshment parlors, and
other eating places, including clubs and caterers, four (4%) per annum of their
gross receipts;(2) On proprietors or operators of restaurants, bars, cafes and other eating
places, including clubs where distilled spirits, fermented liquors in wines are
served, four (4%) per centum of their gross receipts from the sale of food or
refreshments and eight (8%) per centum of their gross receipts from sale of
distilled spirits, fermented liquors or wines. Two sets of commercial invoices
or receipts serially numbered in duplicate shall be separately prepared and
issued, one for each sale of food or refreshment served and another for each
sale of distilled spirits, fermented liquors or wines served, the originals of
the invoices or receipts to be issued to the purchaser or customer;(3) On proprietors or operators of restaurants, refreshment parlors, bars,
cafes, and other eating places which are maintained within the premises, or
compound of a cockpit, cabaret, night or day club, Jai-Alai, race track, or
which are accessible to patrons of such cockpit, cabaret, night or day club,
Jai-Alai, race track by means of a connecting door or passage, twelve (12%) per
centum in the case of night or day club, and twenty-five (25%) per centum in the
case of Jai-Alai and race track, of their gross receipts.
Where the establishments enumerated above are operated or maintained by clubs
of any kind or nature (irrespective of the disposition of their net income and
whether or not they cater exclusively to members of their guests), the keepers
of the establishments shall pay the corresponding tax at the rates fixed
above.
SEC. 16. Section 207 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 207. Percentage tax on carriers and keepers of
garages—Keepers of garages, cars for rent or hire driven by the lessee,
transportation contractors, persons who transport passenger or freight for hire,
and common carriers by land, air or water, except owners of bancas and owners of
animal-drawn two wheeled vehicles, shall pay a tax equivalent to three (3%) per
centum, of their quarterly gross receipts.
In computing the percentage tax provided in this section, the
following shall be considered the minimum quarterly gross receipts in each
particular case:
Autocalesa —
Taxis — 1. Manila and other cities P3,600.00 2. Provincial 2,400.00 Car for hire (with chauffeur)
3,000.00 Car for hire (without chauffeur) 1,800.00
SEC. 17. Section 208 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 208 Percentage lax on stock, real estate,
commercial, customs and immigration brokers and cinematographic film owners,
lessors, or distributors.— Stock, real estate, commercial, customs, and
immigration brokers shall pay a percentage tax equivalent to seven (77%) Per
centum of the gross compensation received by them. Cinematographic film owners,
lessors, or distributors shall pay a percentage tax of three (37o) per centum of
their gross receipts.
The records kept by said brokers and cinematographic film owners, lessors or
distributors may be used as evidence to determine the amount of percentage tax
due from them, and the Commissioner may assess and collect the tax due on
compensation or gross re-receipts earned in accordance with said records.
In any case the amount of the compensation or gross monthly receipts of said
brokers and cinematographic film owners, lessors, or distributors shall be
declared for taxation within the time established for the other monthly sales or
receipts.
SEC. 18. Section 209 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 209. Percentage tux on dealers in securities;
lending investors —Dealers in securities and lending investors shall pay a
tax equivalent to six (6%) per centum of their gross income.
SEC. 19. Section 223 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 223. Stamp tax on bonds, debentures, and
certificates of indebtedness.—On all bonds, debentures, and certificates of
indebtedness issued by any association, company, or corporation, there shall be
collected a documentary stamp tax of one peso on each two hundred pesos, or
fractional part thereof, of the face value of such documents.”
SEC. 20. Section 224 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 224. Stamp, tax on original issue of certificates
of stock.—On every original issue, whether on organization, reorganization
or for any lawful purpose, of certificates of stock by any association, company,
or corporation, there shall be collected a documentary stamp tax of one peso and
seventy centavos on each two hundred pesos, or fractional part thereof, of the
par value of such certificates; Provided, That in the case of the
original issue of stock without par value the amount of the documentary stamp
tax herein prescribed shall be based upon the actual consideration received by
the association, company, or corporation for the issuance of such stock, and in
the case of stock dividends, on the actual value represented by each share.”
SEC. 21. Section 225 of this Code, as amended, is
hereby
further amended to read as follows:
“Sec. 225. Stump tax on sales, agreements to sell,
memoranda of sales, deliveries or transfer of bonds, duebills, certificates of
obligation, or shares or certificates of stock.—On all sales, or agreements
to all, or memoranda of sales, or deliveries, or transfer of bonds, due-bills,
certificates of obligation, or shares or certificates of stock in any
association, company, or corporation, or transfer of such securities by
assignment in bank, or by delivery, or by any paper or agreement, or memorandum
or other evidences of transfer or sale whether entitling the holder in any
manner to the benefit of such bonds, due-bills, certificates of obligation or
stock, or to secure the future payment of money, or for the future transfer of
any bond, due-bills, certificates of obligation or stock, there shall be
collected a documentary stamp tax of fifty centavos on each two hundred pesos,
or fractional part thereof, of the par value of such bond, due-bill,
certificates of obligation or stock: Provided, That only one tax shall
be collected on each sale or transfer of stock or securities from one person to
another, regardless of whether or hot a certificate of stock or obligation is
issued, indorsed or delivered in pursuance of such sale or transfer: And
Provided, further. That in the case of stock without par value the
amount of the documentary stamp tax herein prescribed shall be equivalent to
twenty-five per centum of the documentary stamp tax paid upon the original issue
of said stock.”
SEC. 22. Section 227 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 227. Stamp tax on certificates of profits or
interest in property or accumulations—On all certificates of profits, or
any certificate of memorandum showing interest in the property or accumulations
of any association, company, or corporation, and on all transfer of such
certificates or memoranda, there shall be collected a documentary stamp tax of
twenty centavos on each two hundred pesos, or fractional part thereof, of the
face value of such certificate or memorandum.”
SEC. 23. Section 228 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 228. Stamp tax on bank checks, drafts,, and other
insti’uments.—On each bank check, draft, or order for the payment of any
sum of money drawn upon or issued by any bank, trust company, or any person or
persons companies or corporation at sight or on demand, there shall be collected
a documentary stamp tax of twenty centavos.”
SEC. 24. Section 229 of this Code, as amended, is hereby 1
further amended to read as follows:
“Sec. 229. Stamp tax on promissory notes, bills of
exchange, drafts, certificates of deposit, debt instruments used for deposit
substitutes and others not payable on sight or demand.—On all bills of
exchange (between points within the Philippines),, drafts, or certificates of
deposits, debt instruments used for deposit substitutes or orders for the
payment of any sum of money otherwise than at sight or on demand, on all
promissory notes, whether negotiable or non-negotiable, except bank notes issued
for circulation, and on each renewal of any such note, there shall be collected
a documentary stamp tax of twenty centavos on each two hundred pesos, or
fractional part thereof, of the face value of any such bill of exchange, draft,
certificate of deposit, debt instrument, or note.”
SEC. 25. Section 230 of this Code, as amended is hereby
further amended to read as follows:
“Sec. 230. Stamp tax upon acceptance of bills of
exchange and others.—Upon any acceptance or payment of any bill of exchange
or order for the payment of money purporting to be drawn in a foreign country
but payable in the Philippines, there shall be collected a documentary stamp tax
of thirty centavos on each two hundred pesos or fractional part thereof, of the
face value of any such bill of exchange, or order, or the Philippine equivalent
of such value, if expressed in foreign currency.”
SEC. 26. Section 231 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 231. Stamp tax on foreign bills of exchange and
letters of credit.—On all foreign bills of exchange and letters of credit
(including orders, by telegraphic or otherwise, for the payment of money issued
by express or steamship companies or by any person or persons) drawn in but
payable out of the Philippines in a set of three or more according to the custom
of merchants and bankers, there shall be collected a documentary stamp tax of
thirty centavos on each two hundred pesos, or fractional part thereof, of the
face value of any such bill of exchange or letter of credit, or the Philippine
equivalent of such face value, if expressed in foreign
currency.”
SEC. 27. Section 232 of this Code, as amended, is hereby
flirt as amended to read as follows:
“Sec. 232. Stamp, tax on life insurance policies. —
On all policies of insurance or other instruments by whatever name the same may
be called, whereby any insurance shall be made or renewed upon any life or
lives,, there shall be collected a documentary stamp tax of fifty centavos on
each two hundred pesos or fractional part thereof, of the amount insured by any
such policy.”
SEC. 28. Section 233 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 233. Stamp tax on policies of insurance upon
property.—On all policies of insurance or other instruments by whatever
name the same may be called, by which insurance shall be made or renewed upon
property of any description, including rents or profits, against peril by sea or
on inland waters, or by fire or lighting, there shall be collected a documentary
stamp tax of thirty centavos on each four pesos, or fractional part thereof, of
the amount of premium charged: Provided, however, That no documentary
stamp tax shall be collected on reinsurance contracts or on any instrument by
which cession or acceptance of insurance risks under any reinsurance agreement
is effected or recorded.
SEC. 32. Section 237 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 237. Stamp tax on certificates.—On each
certificate of damage or otherwise, and on every other certificate or document
issued by any customs officer, marine surveyor or other person acting as such,
and on each certificate issued by a notary public, and on each certificate of
any description required by law or by rules or regulations of a public office,
or which is issued for the purpose of giving information, or establishing proof
of a fact, and not otherwise specified herein, there shall be collected a
documentary stamp tax of three pesos.”
SEC. 33. Section 238 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 238. Stamp tax on warehouse, motel, and hotel
receipts; and others.— (a) On each warehouse receipt for property held in
storage in a public or private warehouse or yard for any other person than the
proprietor of such warehouse or yard himself, there shall be collected a
documentary stamp tax of one peso and fifty centavos Provided, That no
tax shall be
collected on each warehouse receipt issued to any one person in
any one calendar month covering property the value of which does not exceed two
hundred pesos, (b) On each hotel receipt issued by keepers of hotels, motels,
rest-houses, lodging houses, or resorts to a guest for lodging, there shall be
collected a documentary stamp tax of three pesos:’ Provided, however,
That if the amount of the receipt exceeds twenty pesos an additional tax of
three pesos on each twenty pesos or fractional part thereof shall be collected.”
SEC. 34. Section 239 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 239. Stamp tax on Jai-Alai or horse race tickets.
—On each Jai-Alai or horse race ticket, there shall be collected a
documentary stamp tax of twenty-centavos: Provided, That if the cost of
the ticket exceeds one peso, an additional tax of twenty centavos on every one
peso or fractional part thereof shall be collected.”
SEC. 35. Section 240 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 240. Stamp tax on bills of lading or
receipts.— On each set of bills of lading or receipts (except charter
party) for any goods, merchandise, or effects shipped from
SEC. 29. Section 234 of this Cede, as amended, is hereby
further amended to read as follows:
“Sec. 234. Stamp tax on fidelity bonds and other
insurance policies.—On all policies of insurance or bonds or obligations of
the nature of indemnity for loss, damage, or liability made or renewed by any
person, association, company or corporation transacting, the business of
accident, fidelity, employer’s liability, plate, glass, steam boiler, burglar,
elevator, automatic sprinkler, or other branch of insurance (except life,
marine, inland, and fire insurance), and all bonds, undertakings, or
recognizances, conditioned for the performance of the duties of any officer or
position, for the doing, or not doing of anything therein specified, and on all
obligations guaranteeing the validity or legality of any bonds or other
obligations issued by any province, city, municipality, or other public body or
organization, and on all obligations guaranteeing the title to any real estate,
or guaranteeing any mercantile, credits, which may be made or renewed by any
such person, company, or corporation, there shall be collected a documentary
stamp tax of thirty centavos on each four pesos, or fracional part thereof, of
the permium charged.”
SEC. 30. Section 235 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 235. Stamp tax on ‘policies of annuities.—On
all policies of annuities, or other instruments by whatever name the same may be
called, whereby an annuity may be made, transferred, or redeemed, there shall be
collected a documentary stamp tax of one peso on each two hundred pesos, or
fractional part thereof, of the capital of the annuity, or should this be
unknown, then on each two hundred pesos, or fractional part thereof, of
thirty-three and one- third times the annual income.”
SEC. 31. Section 236 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 236. Stamp tax on indemnity bonds. —On all
bonds for indemnifying any person, firm, or corporation who shall become bound
or engaged as surety for the payment of any sum of money or for the due
execution or performance of the duties of any office or position or to account
for money received by virtue thereof, and on all other bonds of any description,
except such as may be required in legal proceedings, or are otherwise
provided for herein there shall be collected a documentary stamp tax of
three pesos and fifty centavos.”
SEC. 39. Section 244 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 244. Stamp tax on mortgages pledges, and deeds of
trust.—On every mortgage or pledge of lands, estate, or property, real or
personal, heritable or movable, whatsoever, where the same shall be made as a
security for the payment of any definite and certain sum of money lent at the
time or previously due and owing or forborne to be paid being payable, and on
any conveyance of land, estate, or property whatsoever, intrust or to be sold,
or otherwise converted into money which shall be and intended only as security,
either by express stipulation or otherwise,, there shall be collected a
documentary stamp at the following rates:(a) When the amount secured does not exceed five thousand pesos, ten
pesos.(b) On each five thousand pesos, or fractional part thereof in excess of five
thousand pesos, an additional tax of five pesos.
On any mortgage, pledge, or deed of trust, where the same shall be made as a
security for the payment of a fluctuating account or future advances
without
fixed limit, the documentary stamp tax on such mortgage, pledge or
deed of trust shall be computed on the amount actually loaned or given at the
time of the execution of the mortgage, pledge, or deed of trust. However, if
subsequent advances are made on such mortgage, pledge or deed of trust,
additional documentary stamp tax shall be paid which shall be computed on the
basis of the amount advanced or loaned at the ‘ rates specified above:
Provided, however, That if the full amount of the loan or credit,
granted under the mortgage, pledge or deed of trust is specified therein, the
documentary stamp tax prescribed in this section shall be paid and computed on
the said amount of the loan of credit granted.
SEC. 40. Section 245 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 245. Stamp tax on deed of sale and conveyance of
real property.—On all conveyance, deeds, instruments, or writing, other
than grants, patents, or original certificates of adjudication issued by the
Government, whereby any lands, tenements or other realty sold shall be granted
assigned, transferred, or otherwise conveyed to the purchaser, or purchasers, or
to any other person or persons designated by such purchaser or purchasers, there
shall be collected a documentary stamp tax at the following rates: one port or
place in the Philippines to another port or place in the Philippines (except on
ferries across rivers) or to any foreign port, there shall be collected a
documentary stamp tax in accordance with the following
schedule:
Provided, however, That freight tickets covering goods, merchandise,
or effects carried as accompanied baggage of passengers on land and water
carriers primarily engaged in the transportation of passengers are hereby
exempt.”
SEC. 36. Section 241 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 241. Stamp tax on proxies.—On each proxy for
voting at any election for officers of any company or association, or for any
other purposes, except proxies issued affecting the affairs of associations or
corporations organized for religious, charitable, or literary purposes, there
shall be collected a documentary stamp tax of two pesos and fifty centavos.”
SEC. 37. Section 242 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 242. Stamp tax on powers of attorney.—On each
power of attorney to perform any act whatsoever, except acts connected with the
collection of claims due from or accruing to the Government of the Republic of
the Philippines, or the government of any province, city or municipality, there
shall be collected a documentary stamp tax of two pesos: Provided, however,
That on each power of attorney which authorizes another to administer,
sell, lease, or otherwise dispose of the property of a principal, there shall be
collected a documentary stamp tax of three pesos.
SEC. 38. Section 243 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 243. Stamp tax on leases and other hiring agreements.—On each
lease, agreement, memorandum, or contract for hire, use or rent of any lands or
tenements, or portions thereof, there shall be collected a documentary stamp of
three pesos for each year of the term of said contracts or agreement.”(a) When the consideration, or value received or contracted to be paid for
such realty, after making a proper allowance of any incumbrance, does not exceed
one thousand pesos ten pesos.(b) For each additional one thousand pesos, or fractional part thereof in
excess of one thousand pesos of such consideration of value, ten
pesos.
When it appears that the amounts of the documentary stamp tax payable
hereunder has been reduced by an incorrect statement, of the consideration in
any: conveyance, deed, instrument, or writing subject to such tax, the
Commissioner, provincial or city treasurer, or other revenue officer shall, from
the assessment rolls or other reliable source of information, assess the
property of its true market value and collect the proper tax thereon.”
SEC. 41. Section 246 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 246. Stamp tax on charter parties and similar
instrument.—On every charter party, contract, or agreement for the charter
of any ship, vessel, or steamer, or any letter or memorandum or other writing
between the captain, master, or owner, or other person acting as agent of any
ship, vessel, or steamer, and any other person or persons for or relating to the
charter of any such ship, vessel, or steamer, and on any renewal or transfer of
such charter, contract, agreement, letter or memorandum, there shall be
collected a documentary stamp tax at the following rates:(a) If the registered gross tonnage of the ship, vessels or steamer does not
exceed three hundred tons and the duration of the charter or contract does not
exceed six months, one hundred >pesos; and for each month or fraction of a
month in excess of six months, an-additional tax of twenty pesos shall be
paid.(b) If the registered gross tonnage exceeds three hundred tons and does not
exceed six hundred tons, and the duration of the charter or contract does not
exceed six months, two hundred pesos; and for each month or fraction of a month
in excess of six months, an additional tax of forty pesos shall be paid.(c) If the registered gross tonnage exceeds six hundred four and the duration
of the charter or contract does not exceed six months, three hundred pesos; and
for each month or fraction of a month in excess of six months, an additional tax
of fifty four pesos”
SEC. 42. A new Subsection A is hereby added to Sec. 260 of
this Code, as amended, to read as follows:
“Sec. 260-A. Additional Tax on banks non-bank financial
intermediaries and authorized foreign-exchange dealers.—There shall be
collected, in addition to the tax on gross receipts imposed under Section 260
hereof, a tax of one per centum (1%) based on the gross value of every sale or
purchase of foreign exchange by all banks, non-bank financial intermediaries,
and all authorized foreign-exchange dealers.“The tax imposed hereunder, for foreign exchange. transacted within one week,
shall be payable on the first banking day of the succeeding week and it shall be
the duty of every bank and non-financial intermediary to make a true and
complete return of the value of foreign exchange sold or purchased during the
week and pay the tax due thereon and if the tax is not paid on the date
prescribed herein, the amount of the tax shall be increased by twenty-five per
centum, the increment to be part of the tax.“In case of willful neglect to file the return on the date prescribed herein,
or in case a false or fraudulent return is willfully made, there shall be added
to the tax or to the deficiency tax in case any payment has been made on the
basis of such return before the discovery of the falsity or fraud, a surcharge
of fifty Per centum of the amount. The amount so added to the tax shall be
collected at the same time and in
same manner and as part of the tax unless
the tax has been paid before the discovery of the falsity or fraud, in which
case the amount so added shall be collected in the same manner as the
tax.
SEC. 43. Section 263 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 263. Tax on insurance premium.—There shall be
collected from every person, company, or corporation (except purely cooperative
companies or associations) doing insurance business of any sort in the
Philippines a tax of six per centum of the total premium collected, whether such
premiums are paid in money, notes, credits or any substitute for money; but
premiums refunded within six months after payment on account of rejection or
risk or returned for other reason to a person insured shall not be included in
the taxable receipts; nor shall any tax be paid upon reinsurance by accompany
that has already paid the tax; nor upon premiums collected or received by any
branch of a domestic corporation, firm or association doing business outside the
Philippines on account of —any life insurance of the insured who is a
non-resident, if any percentage tax on such premium is imposed by the foreign
country where the branch is established nor upon premiums collected or received
on account of any reinsurance, if the risk insured against covers property
located outside the Philippines, or the insured, in case of personal insurance,
resides outside the Philippines, if any percentage tax on such premiums is
imposed by the foreign country where the original insurance has been issued or
perfected; nor upon that portion of the premiums collected or received by the
insurance companies on variable contracts (as denned in Sec. 232 (2) of
Presidential Decree No. 612), in excess of the amounts necessary to insure the
lives of the variable contract workers.“Cooperatives companies or Associations are such as are conducted by the
members thereof with the money collected from among themselves and solely for
their own protection and not for profit.”
SEC. 44. Section 268 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 268. Amusement taxes.—There shall be
collected from the proprietor, lessee or operator of cockpits, cabarets, night
or day cluHs, boxing exhibitions, profession basketball games, Jai-Alai, race
tracks and bowling alleys, a tax equivalent, to:“1. Eighteen per centum in the case of cockpits;
“2. Eighteen per centum in the case of cabarets, night or day clubs;
“3. Fifteen per centum in the case of boxing exhibitions ;
“4. Fifteen per centum in the case of professional basketball games as
envisioned in Presidential Decree No. 871. Provided, however, That the
tax herein shall be in lieu of all other percentage taxes of whatever nature and
description;“5. Thirty per centum in the case of Jai-Alai and race tracks; and
“6. Fifteen per centum in the case of bowling alleys of their gross receipts,
irrespective of whether or not any amount is charged or paid for admission. For
the purpose of the amusement tax, the term “gross receipts” embraces all the
receipts of the proprietor, lessee or operator of the amusement place. Said
gross receipts also include income from television, radio and motion picture
rights, if any. (A person or entity or association conducting any activity
subject to the tax herein imposed shall be similarly liable for said tax with
respect to such portion of the receipts derived by him or it.)“The taxes imposed herein shall be payable at the end of each quarter and it
shall be the duty of the proprietor, lessee, or operator concerned, as well as
any party liable, within twenty days after the end of each quarter, to make a
true and complete return of the amount of the gross receipts derived during the
preceding quarter and pay the tax due thereon. If the tax is not paid within the
time prescribed above, the amount of the tax shall be increased by Twenty-five
per centum, the increment to be part of the tax.“In case of willful neglect to file the return within the period prescribed
herein, or in case a false or fraudulent return is willfully made, there shall
be added to the tax or to the deficiency tax, in case any payment has been made
on the basis of the return before the discovery falsity of fraud and surcharge
of fifty per centum of its amount. The amount so added to any tax shall be
collected at the same time and in the same manner and as part of the tax unless
the tax has been paid before the discovery of the falsity or fraud, in which
case, the amount to assessed shall be collected in the same manner as the tax.”
SEC. 45. Section 269 of this Code, as amended, is hereby
further amended to read as follows:
“Sec. 269. Tea: on Winnings.—Every person who wins
in horse race or Jai-Alai shall pay a tax equivalent to fifteen percent of his
winnings or ‘dividends’, the tax to be based on the actual amount paid to him
for every winning ticket after deducting the cost of the ticket. The tax herein
prescribed shall be deducted from the ‘dividends’ corresponding to each winning
ticket and withheld by the operator, manager, or person in charge of the
horse-races or Jai-Alai before paying the ‘dividends’ to the person entitling
thereto. The same tax shall be collected from owners of winning race horses at
the same time and in the same manner above.“Operator, manager, or person in charge of horse races or Jai-Alai shall,
within twenty days from the date the tax was deducted and withheld in accordance
with the first paragraph hereof, file a true and correct return with the
Commissioner in the manner of form to be prescribed by the Minister of Finance,
and pay within the same period the total amount of tax so deducted and
withheld.“If the tax herein provided is not paid within the time prescribed
above, or in case of willful neglect to file the return within the period
prescribed herein, or in case a false or fraudulent return is willfully made,
there shall be added to the tax or to the deficiency tax, in case any payment
has been made on the basis of the return before the discovery of the falsity or
fraud, the corresponding surcharges provided in Section 268 of this
Code.”
Section 324 of this Code is hereby further amended to read as follows:
SEC. 46. Section 324. Preservation of books of accounts
and other accounting records.—All the books of accounts including the
subsidiary books, and other accounting records of corporations, partnership, or
persons shall be preserved by them for a period beginning from the last entry in
each book until the last day prescribed by Section 318 within which the
Commissioner is authorized to make an assessment. The said books and records
shall be subject to examination and inspection by internal revenue officers:
Provided, That for income tax purposes, such examination and inspection
shall be made only once in a taxable year, except in the following cases:
(a) Fraud, irregularity or mistakes as determined by the Commissioner;
(b) The taxpayer requests reinvestigation;
(c) Verification of compliance with withholding tax laws and regulations;
(d) Verification of capital gains tax liabilities; and
(e) In the exercise of the Commissioner’s power under Section 7 (b) to obtain
information from other persons, in which case, another or separate examination
and inspection may be made. Examination and inspection of books of accounts and
other accounting records shall be done in the taxpayer’s office or place of
business or in the office of the Bureau of Internal Revenue. All corporations,
partnerships or persons that retire from business shall, within ten days from
the date of retirement of within such period of time as maybe allowed by the
Commissioner in special cases, submit their books of accounts, including the
subsidiary books and other accounting records to the Commissioner or any of his
deputies for examination, after which they shall be returned. Corporations and
partnerships contemplating dissolution must notify the Commissioner and shall
not be dissolved until cleared of any tax liability.”“Any provision of existing general or special law to the contrary
notwithstanding, the books of accounts and other pertinent records of tax-exempt
organizations or grantees of tax incentives shall be subject to examination by
the Bureau of Internal Revenue for purposes of ascertaining compliance with the
conditions under which they have been granted tax exemptions or tax incentives,
and their tax liability, if any.”
SEC. 47. The Minister of Finance, upon recommendation of the
Commissioner of Internal Revenue shall promulgate the necessary rules and
regulations for the implementation of this Presidential Decree.
SEC. 48. 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.
SEC. 49. If for no reason any section or provision of this
Decree is declared unconstitutional or invalid, other sections or provisions
hereof which are not affected thereby shall continue to be in full force and
effect.
SEC. 50. This Decree shall take effect on October 15, 1984:
Provided, however, That with respect to the 20% ad valorem tax on
fermented liquor under ‘Sec. 7 of this Decree, 10% thereof shall be imposed
beginning October iS, 1984 and the remaining 10% ad valorem shall apply
beginning January 1, 1985: and Provided, further. That the specific tax
increases on distilled spirits and cinematographic films under Sec. 6 & 9 of
this Decree shall take effect beginning January 1, 1985.
Done in the City of Manila, on this 10th day of October, in the year of Our
Lord, nineteen hundred and eighty-four.
(Sgd.) FERDINAND E. MARCOS
President of the
Philippines
By the President: (Sgd.) JUAN C. TUVERA Presidential Executive Assistant