Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

6717

HOUSE BILL NO.

Introduced by Representative Ferdinand L. Hernandez

AN ACT
IMPOSING SALES TAX IN LIEU OF VALUE-ADDED TAX,
REPLACING FOR THE PURPOSE THE ENTIRE PROVISIONS OF
TITLE IV, AND AMENDING SECTION 116, TITLE V, AND SECTION
236, TITLE IX, OF THE NATIONAL INTERNAL REVENUE CODE OF
1997, AS AMENDED, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

In 1987, Executive Order No. 273 was issued whereby the government sought
to replace sales tax regime with a multi-stage value-added Tax (VAT) system. The
adoption of the VAT system was one of the structural reforms provided in the 1986
Tax Reform Program designed to simplify tax administration and to make the tax

system more equitable.

However, despite the laudable purpose of shifting to the VAT system, the
present tax regime has presented several disadvantages, particularly in the matter of

its administration.


From 2008 to 2019, the Bureau of Internal Revenue (BIR) reported that the
total input tax exceeded the total output tax at an increasing rate of 25% to 47%. As
of the end of 2019, the excess of input tax over output tax amounted to P924.6 billion.

The BIR also disclosed that the effective collection rate of the VAT for the past
12 years ranged only from 2.8% to 3.1%. In other words, while the 12% VAT passed
on to consumers is dutifully paid, an average of only 3% is being collected by the
government, translating to a collection efficiency of only 25%.

‘These records for the past 12 years demonstrate the existence of loopholes
that beset our VAT system. These loopholes emanate from the inherent complexity
of the VAT system, particularly in the possible abuses that may be used to
manipulate the input tax mechanism as well as the difficulty of administering and
monitoring thereof.

‘This bill seeks to amend the present VAT system and shift to a simple sales
tax system, which will effectively do away with the tax loopholes. The proposed
sales tax system, which will implement a gross taxation system, aims to (a) eliminate
the abuse of the input tax mechanism of the present VAT system; and, (b) simplify
the monitoring and administration by the government.

Furthermore, the proposed sales tax system will also impose a lower tax rate,
significantly reducing the tax which consumers pay on goods and services.

In light of the foregoing, the immediate enactment of this proposed legislation
is sought.

FERDIN. L. HE! iDEZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House BILL No.__8717

Introduced by Representative Ferdinand L. Hernandez

AN ACT
IMPOSING SALES TAX IN LIEU OF VALUE-ADDED TAX,
REPLACING FOR THE PURPOSE THE ENTIRE PROVISIONS OF
TITLE IV, AND AMENDING SECTION 116, TITLE V, AND SECTION
236, TITLE IX, OF THE NATIONAL INTERNAL REVENUE CODE OF
1997, AS AMENDED, AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. The provisions of Title IV of the National 1 Internal Revenue
Code of 1997, as amended, governing value-added tax are hereby repealed and
replaced with new provisions imposing sales tax, to read as follows:

“TITLE IV
“SALES TAX

“CHAPTER I - IMPOSITION OF TAX

“SEC. 105. PERSONS LIABLE. - ANY PERSON WHO, IN THE COURSE
OF TRADE OR BUSINESS, SELLS, BARTERS, EXCHANGES, LEASES
GOODS OR PROPERTIES, RENDERS SERVICES, AND ANY PERSON
WHO IMPORTS GOODS SHALL BE SUBJECT TO THE SALES TAX
IMPOSED IN SECTIONS 106 TO 108 OF THIS CODE.

“THE SALES TAX IS A CONSUMPTION TAX IMPOSED ON THE SALE
OF GOODS, PROPERTIES AND SERVICES. IT MAY BE SHIFTED OR


PASSED ON TO THE BUYER, TRANSFEREE OR LESSEE OF THE
GOODS, PROPERTIES OR SERVICES.

“THE PHRASE ‘IN THE COURSE OF TRADE OR BUSINESS’ MEANS
THE REGULAR CONDUCT OR PURSUIT OF A COMMERCIAL OR AN
ECONOMIC ACTIVITY, INCLUDING TRANSACTIONS INCIDENTAL
THERETO, BY ANY PERSON REGARDLESS OF WHETHER OR NOT
THE PERSON ENGAGE THEREIN IS A NON-STOCK, NONPROFIT
PRIVATE ORGANIZATION (IRRESPECTIVE OF THE DISPOSITION
OF ITS NET INCOME AND WHETHER OR NOT IT SELLS
EXCLUSIVELY TO MEMBERS OR THEIR GUESTS), OR
GOVERNMENT ENTITY.

“THE RULE OF REGULARITY, TO THE CONTRARY
NOTWITHSTANDING, SERVICES AS DEFINED IN THIS CODE
RENDERED IN THE PHILIPPINES BY NONRESIDENT FOREIGN
PERSONS SHALL BE CONSIDERED AS BEING RENDERED IN THE
COURSE OF TRADE OR BUSINESS.”

“SEC. 106. TAX ON SALE OF GOODS OR PROPERTIES. -—

“(A) RATE AND BASE OF TAX. - THERE SHALL BE LEVIED,
ASSESSED AND COLLECTED ON EVERY SALE, BARTER OR
EXCHANGE OF GOODS OR PROPERTIES, SALES TAX EQUIVALENT
TO FOUR PER CENT (4%) OF THE GROSS SELLING PRICE OR GROSS
VALUE IN MONEY OF THE GOODS OR PROPERTIES SOLD,
BARTERED OR EXCHANGED, SUCH TAX TO BE PAID BY THE
SELLER OR TRANSFEROR.

“) GOOD OR PROPERTIES. - THE TERM “GOODS” OR
“PROPERTIES” SHALL MEAN ALL TANGIBLE AND INTANGIBLE
OBJECTS WHICH ARE CAPABLE OF PECUNIARY ESTIMATION AND
SHALL INCLUDE:

“(A) REAL PROPERTY HELD PRIMARILY FOR SALE TO CUSTOMERS
OR HELD FOR LEASE IN THE ORDINARY COURSE OF TRADE OR
BUSINESS;

“(B) THE RIGHT OR THE PRIVILEGE TO USE PATENT, COPYRIGHT,
DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS,
GOODWILL, TRADEMARK, TRADE BRAND OR OTHER LIKE
PROPERTY OR RIGHT;


“(C) THE RIGHT OR THE PRIVILEGE TO USE IN THE PHILIPPINES
OF ANY INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT;

“(D) THE RIGHT OR THE PRIVILEGE TO USE MOTION PICTURE
FILMS, TAPES AND DISCS; AND

“(E) RADIO, TELEVISION, SATELLITE TRANSMISSION AND CABLE
TELEVISION TIME.

“THE TERM ‘GROSS SELLING PRICE’ MEANS THE TOTAL AMOUNT
OF MONEY OR ITS EQUIVALENT WHICH THE PURCHASER PAYS
OR IS OBLIGATED TO PAY TO THE SELLER IN CONSIDERATION OF
THE SALE, BARTER OR EXCHANGE OF THE GOODS OR
PROPERTIES, EXCLUDING THE SALES TAX. THE EXCISE TAX, IF
ANY, ON SUCH GOODS OR PROPERTIES SHALL FORM PART OF
THE GROSS SELLING PRICE.

“(B) TRANSACTIONS DEEMED SALE. - THE FOLLOWING
TRANSACTIONS SHALL BE DEEMED SALE:

“(1) TRANSFER, USE OR CONSUMPTION NOT IN THE COURSE OF
BUSINESS OF GOODS OR PROPERTIES ORIGINALLY INTENDED
FOR SALE OR FOR USE IN THE COURSE OF BUSINESS;

“(2) DISTRIBUTION OR TRANSFER TO:

“(A) SHAREHOLDERS OR INVESTORS AS SHARE IN THE PROFITS;
OR

“(B) CREDITORS IN PAYMENT OF DEBT;

“(3) CONSIGNMENT OF GOODS IF ACTUAL SALE IS NOT MADE
WITHIN SIXTY (60) DAYS FOLLOWING THE DATE SUCH GOODS
WERE CONSIGNED; AND

“(4) RETIREMENT FROM OR CESSATION OF BUSINESS, WITH
RESPECT TO INVENTORIES OF TAXABLE GOODS EXISTING AS OF
SUCH RETIREMENT OR CESSATION.

“(C) CHANGES IN OR CESSATION OF STATUS OF A SALES TAX
REGISTERED PERSON. - THE TAX IMPOSED IN SUBSECTION (A) OF
THIS SECTION SHALL ALSO APPLY TO GOODS DISPOSED OF OR
EXISTING AS OF A CERTAIN DATE IF UNDER CIRCUMSTANCES TO


BE PRESCRIBED IN RULES AND REGULATIONS TO BE
PROMULGATED BY THE SECRETARY OF FINANCE, UPON
RECOMMENDATION OF THE COMMISSIONER, THE STATUS OF A
PERSON AS A SALES TAX REGISTERED PERSON CHANGES OR IS
TERMINATED.

“(D) SALES RETURNS, ALLOWANCES AND SALES DISCOUNTS. -
THE VALUE OF GOODS OR PROPERTIES SOLD AND
SUBSEQUENTLY RETURNED OR FOR WHICH ALLOWANCES WERE
GRANTED BY A TAXPAYER MAY BE DEDUCTED FROM THE GROSS
SALES OR RECEIPTS FOR THE QUARTER IN WHICH A REFUND IS
MADE OR A CREDIT MEMORANDUM OR REFUND IS ISSUED.
SALES DISCOUNT GRANTED AND INDICATED IN THE INVOICE AT
THE TIME OF SALE AND THE GRANT OF WHICH DOES NOT
DEPEND UPON THE HAPPENING OF A FUTURE EVENT MAY BE
EXCLUDED FROM THE GROSS SALES WITHIN THE SAME QUARTER
IT WAS GIVEN.

“(E) AUTHORITY OF THE COMMISSIONER TO DETERMINE THE
APPROPRIATE TAX BASE. - THE COMMISSIONER SHALL, BY RULES
AND REGULATIONS PRESCRIBED BY THE SECRETARY OF
FINANCE, DETERMINE THE APPROPRIATE TAX BASE IN CASES
WHERE A TRANSACTION IS DEEMED A SALE, BARTER OR
EXCHANGE OF GOODS OR PROPERTIES UNDER SUBSECTION (B)
HEREOF, OR WHERE THE GROSS SELLING PRICE IS
UNREASONABLY LOWER THAN THE ACTUAL MARKET VALUE.

“SEC. 107. TAX ON IMPORTATION OF GOODS. -

“(A) IN GENERAL. - THERE SHALL BE LEVIED, ASSESSED AND
COLLECTED ON EVERY IMPORTATION OF GOODS A SALES TAX
EQUIVALENT TO FOUR PER CENT (4%) BASED ON THE TOTAL
VALUE USED BY THE BUREAU OF CUSTOMS IN DETERMINING
TARIFF AND CUSTOMS DUTIES PLUS CUSTOMS DUTIES, EXCISE
TAXES, IF ANY, AND OTHER CHARGES, SUCH TAX TO BE PAID BY
THE IMPORTER PRIOR TO THE RELEASE OF SUCH GOODS FROM
CUSTOMS CUSTODY: PROVIDED, THAT WHERE THE CUSTOMS
DUTIES ARE DETERMINED ON THE BASIS OF THE QUANTITY OR
VOLUME OF THE GOODS, THE SALES TAX SHALL BE BASED ON
THE LANDED COST PLUS EXCISE TAXES, IF ANY;

“(B) TRANSFER OF GOODS BY TAX-EXEMPT PERSONS. - IN THE
CASE OF TAX-FREE IMPORTATION OF GOODS INTO THE


PHILIPPINES BY PERSONS, ENTITIES OR AGENCIES EXEMPT FROM
TAX WHERE SUCH GOODS ARE SUBSEQUENTLY SOLD,
TRANSFERRED OR EXCHANGED IN THE PHILIPPINES TO NON-
EXEMPT PERSONS OR ENTITIES, THE PURCHASERS, TRANSFEREES
OR RECIPIENTS SHALL BE CONSIDERED THE IMPORTERS
THEREOF, WHO SHALL BE LIABLE FOR ANY INTERNAL REVENUE
TAX ON SUCH IMPORTATION. THE TAX DUE ON SUCH
IMPORTATION SHALL CONSTITUTE A LIEN ON THE GOODS
SUPERIOR TO ALL CHARGES OR LIENS ON THE GOODS,
IRRESPECTIVE OF THE POSSESSOR THEREOF.”

“SEC. 108. TAX ON SALE OF SERVICES AND USE OR LEASE OF
PROPERTIES. - THERE SHALL BE LEVIED, ASSESSED AND
COLLECTED, A SALES TAX EQUIVALENT TO FOUR PER CENT (4%)
OF GROSS RECEIPTS DERIVED FROM THE SALE OR EXCHANGE OF
SERVICES, INCLUDING THE USE OR LEASE OF PROPERTIES;

“THE PHRASE ‘SALE OR EXCHANGE OF SERVICES’ MEANS THE
PERFORMANCE OF ALL KINDS OF SERVICES IN THE PHILIPPINES
FOR OTHERS FOR A FEE, REMUNERATION OR CONSIDERATION,
INCLUDING THOSE PERFORMED OR RENDERED BY
CONSTRUCTION AND SERVICE CONTRACTORS; STOCK, REAL
ESTATE, COMMERCIAL, CUSTOMS AND IMMIGRATION BROKERS;
LESSORS OF PROPERTY, WHETHER PERSONAL OR REAL;
WAREHOUSING SERVICES; LESSORS OR DISTRIBUTORS OF
CINEMATOGRAPHIC FILMS; PERSONS ENGAGED IN MILLING
PROCESSING, MANUFACTURING OR REPACKING GOODS FOR
OTHERS; PROPRIETORS, OPERATORS OR KEEPERS OF HOTELS,
MOTELS, REST HOUSES, PENSION HOUSES, INNS, RESORTS;
PROPRIETORS OR OPERATORS OF RESTAURANTS, REFRESHMENT
PARLORS, CAFES AND OTHER EATING PLACES, INCLUDING
CLUBS AND CATERERS; DEALERS IN SECURITIES; LENDING
INVESTORS; TRANSPORTATION CONTRACTORS ON THEIR
TRANSPORT OF GOODS OR CARGOES, INCLUDING PERSONS
WHO TRANSPORT GOODS OR CARGOES FOR HIRE ANOTHER
DOMESTIC COMMON CARRIERS BY LAND RELATIVE TO THEIR
TRANSPORT OF GOODS OR CARGOES; COMMON CARRIERS BY
AIR AND SEA RELATIVE TO THEIR TRANSPORT OF PASSENGERS,
GOODS OR CARGOES FROM ONE PLACE IN THE PHILIPPINES TO
ANOTHER PLACE IN THE PHILIPPINES; SALES OF ELECTRICITY BY
GENERATION COMPANIES, TRANSMISSION, AND DISTRIBUTION
COMPANIES; SERVICES OF FRANCHISE GRANTEES OF ELECTRIC
UTILITIES, TELEPHONE AND TELEGRAPH, RADIO AND



TELEVISION BROADCASTING AND ALL OTHER FRANCHISE
GRANTEES EXCEPT THOSE UNDER SECTION 116 OF THIS CODE,
AND NON-LIFE INSURANCE COMPANIES (EXCEPT THEIR CROP
INSURANCES), INCLUDING SURETY, FIDELITY, INDEMNITY, AND
BONDING COMPANIES; AND SIMILAR SERVICES REGARDLESS OF
WHETHER OR NOT THE PERFORMANCE THEREOF CALLS FOR THE
EXERCISE OR USE OF THE PHYSICAL OR MENTAL FACULTIES. THE
PHRASE ‘SALE OR EXCHANGE OF SERVICES’ SHALL LIKEWISE
INCLUDE:

“(1) THE LEASE OR THE USE OF OR THE RIGHT OR PRIVILEGE TO
USE ANY COPYRIGHT, PATENT, DESIGN OR MODEL, PLAN, SECRET
FORMULA OR PROCESS, GOODWILL, TRADEMARK, TRADE BRAND
OR OTHER LIKE PROPERTY OR RIGHT;

“(2) THE LEASE OF THE USE OF, OR THE RIGHT TO USE OF ANY
INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT;

“(3) THE SUPPLY OF SCIENTIFIC, TECHNICAL, INDUSTRIAL OR
COMMERCIAL KNOWLEDGE OR INFORMATION;

“(4) THE SUPPLY OF ANY ASSISTANCE THAT IS ANCILLARY AND
SUBSIDIARY TO AND IS FURNISHED AS A MEANS OF ENABLING
THE APPLICATION OR ENJOYMENT OF ANY SUCH PROPERTY, OR
RIGHT AS IS MENTIONED IN SUBPARAGRAPH (2) OR ANY SUCH
KNOWLEDGE OR INFORMATION AS IS MENTIONED IN
SUBPARAGRAPH (3);

“(5) THE SUPPLY OF SERVICES BY A NONRESIDENT PERSON OR HIS
EMPLOYEE IN CONNECTION WITH THE USE OF PROPERTY OR
RIGHTS BELONGING TO, OR THE INSTALLATION OR OPERATION
OF ANY BRAND, MACHINERY OR OTHER APPARATUS PURCHASED
FROM SUCH NONRESIDENT PERSON;

“(6) THE SUPPLY OF TECHNICAL ADVICE, ASSISTANCE OR
SERVICES RENDERED IN CONNECTION WITH TECHNICAL
MANAGEMENT OR ADMINISTRATION OF ANY SCIENTIFIC,
INDUSTRIAL OR COMMERCIAL UNDERTAKING, VENTURE,
PROJECT OR SCHEME;

“(7) THE LEASE OF MOTION PICTURE FILMS, FILMS, TAPES AND
DISCS; AND


“8) THE LEASE OR THE USE OF OR THE RIGHT TO USE RADIO,
TELEVISION, SATELLITE TRANSMISSION AND CABLE TELEVISION
TIME.

“LEASE OF PROPERTIES SHALL BE SUBJECT TO THE TAX HEREIN
IMPOSED IRRESPECTIVE OF THE PLACE WHERE THE CONTRACT
OF LEASE OR LICENSING AGREEMENT WAS EXECUTED IF THE
PROPERTY IS LEASED OR USED IN THE PHILIPPINES.

“THE TERM ‘GROSS RECEIPTS’ MEANS THE TOTAL AMOUNT OF
MONEY OR ITS EQUIVALENT REPRESENTING THE CONTRACT
PRICE, COMPENSATION, SERVICE FEE, RENTAL OR ROYALTY,
INCLUDING THE AMOUNT CHARGED FOR MATERIALS SUPPLIED
WITH THE SERVICES AND DEPOSITS AND ADVANCED PAYMENTS
ACTUALLY OR CONSTRUCTIVELY RECEIVED DURING THE
TAXABLE QUARTER FOR THE SERVICES PERFORMED OR TO BE
PERFORMED FOR ANOTHER PERSON, EXCLUDING THE SALES
TAX.”

“SEC. 109. EXEMPT TRANSACTIONS. - THE FOLLOWING
TRANSACTIONS SHALL BE EXEMPT FROM THE SALES TAX:

“(A) SALE OR IMPORTATION OF AGRICULTURAL AND MARINE
FOOD PRODUCTS IN THEIR ORIGINAL STATE, LIVESTOCK AND
POULTRY OF OR KIND GENERALLY USED AS, OR YIELDING OR
PRODUCING FOODS FOR HUMAN CONSUMPTION; AND
BREEDING STOCK AND GENETIC MATERIALS THEREFOR.

PRODUCTS CLASSIFIED UNDER THIS PARAGRAPH SHALL BE
CONSIDERED IN THEIR ORIGINAL STATE EVEN IF THEY HAVE
UNDERGONE THE SIMPLE PROCESSES OF PREPARATION OR
PRESERVATION FOR THE MARKET, SUCH AS FREEZING, DRYING,
SALTING, BROILING, ROASTING, SMOKING OR STRIPPING.
POLISHED AND/OR HUSKED RICE, CORN GRITS, RAW CANE
SUGAR AND MOLASSES, ORDINARY SALT AND COPRA SHALL BE
CONSIDERED IN THEIR ORIGINAL STATE;

“(B) SALE OR IMPORTATION OF FERTILIZERS; SEEDS, SEEDLINGS
AND FINGERLINGS; FISH, PRAWN, LIVESTOCK AND POULTRY
FEEDS, INCLUDING INGREDIENTS, WHETHER LOCALLY
PRODUCED OR IMPORTED, USED IN THE MANUFACTURE OF
FINISHED FEEDS (EXCEPT SPECIALTY FEEDS FOR RACE HORSES,
FIGHTING COCKS, AQUARIUM FISH, ZOO ANIMALS AND OTHER


ANIMALS GENERALLY CONSIDERED AS PETS);

“C) IMPORTATION OF PERSONAL AND HOUSEHOLD EFFECTS
BELONGING TO THE RESIDENTS OF THE PHILIPPINES RETURNING
FROM ABROAD AND NONRESIDENT CITIZENS COMING TO
RESETTLE IN THE PHILIPPINES: PROVIDED, THAT SUCH GOODS
ARE EXEMPT FROM CUSTOMS DUTIES UNDER THE CUSTOMS
MODERNIZATION AND TARIFF ACT;

“(D) IMPORTATION OF PROFESSIONAL INSTRUMENTS AND
IMPLEMENTS, WEARING APPAREL, DOMESTIC ANIMALS, AND
PERSONAL HOUSEHOLD EFFECTS (EXCEPT ANY VEHICLE, VESSEL,
AIRCRAFT, MACHINERY OTHER GOODS FOR USE IN THE
MANUFACTURE AND MERCHANDISE OF ANY KIND IN
COMMERCIAL QUANTITY) BELONGING TO PERSONS COMING TO
SETTLE IN THE PHILIPPINES, FOR THEIR OWN USE AND NOT FOR
SALE, BARTER OR EXCHANGE, ACCOMPANYING SUCH PERSONS,
OR ARRIVING WITHIN NINETY (90) DAYS BEFORE OR AFTER THEIR
ARRIVAL, UPON THE PRODUCTION OF EVIDENCE SATISFACTORY
TO THE COMMISSIONER, THAT SUCH PERSONS ARE ACTUALLY
COMING TO SETTLE IN THE PHILIPPINES AND THAT THE
CHANGE OF RESIDENCE IS BONA FIDE;

“(E) SERVICES SUBJECT TO PERCENTAGE TAX UNDERTITLE V;

“(F) SERVICES BY AGRICULTURAL CONTRACT GROWERS AND
MILLING FOR OTHERS OF PALAY INTO RICE, CORN INTO GRITS
AND SUGAR CANE INTO RAW SUGAR;

“(G) MEDICAL, DENTAL, HOSPITAL AND VETERINARY SERVICES
EXCEPT THOSE RENDERED BY PROFESSIONALS;

“(H) EDUCATIONAL SERVICES RENDERED BY PRIVATE
EDUCATIONAL INSTITUTIONS, DULY ACCREDITED BY THE
DEPARTMENT OF EDUCATION (DEPED), THE COMMISSION ON
HIGHER EDUCATION (CHED), THE TECHNICAL EDUCATION AND
SKILLS DEVELOPMENT AUTHORITY (TESDA) AND THOSE
RENDERED BY GOVERNMENT EDUCATIONAL INSTITUTIONS;

“() SERVICES RENDERED BY INDIVIDUALS PURSUANT TO AN
EMPLOYER-EMPLOYEE RELATIONSHIP;

“Q) SERVICES RENDERED BY REGIONAL OR AREA


HEADQUARTERS ESTABLISHED IN THE PHILIPPINES BY
MULTINATIONAL CORPORATIONS WHICH ACT AS SUPERVISORY,
COMMUNICATIONS AND COORDINATING CENTERS FOR THEIR
AFFILIATES, SUBSIDIARIES OR BRANCHES IN THE ASIA-PACIFIC
REGION AND DO NOT EARN OR DERIVE INCOME FROM THE
PHILIPPINES;

“(K) SERVICES RENDERED IN PROCESSING, MANUFACTURING OR
REPACKING GOODS FOR OTHER PERSONS DOING BUSINESS
OUTSIDE THE PHILIPPINES WHICH GOODS ARE SUBSEQUENTLY
EXPORTED, WHERE THE SERVICES ARE PAID FOR IN ACCEPTABLE
FOREIGN CURRENCY AND ACCOUNTED FOR IN ACCORDANCE
WITH THE RULES AND REGULATIONS OF THE BANGKO SENTRAL
NG PILIPINAS (BSP);

“(L) SERVICES OTHER THAN THOSE MENTIONED IN THE
PRECEDING PARAGRAPH, RENDERED TO A PERSON ENGAGED IN
BUSINESS CONDUCTED OUTSIDE THE PHILIPPINES OR TO A
NONRESIDENT PERSON NOT ENGAGED IN BUSINESS WHO IS
OUTSIDE THE PHILIPPINES WHEN THE SERVICES ARE
PERFORMED, THE CONSIDERATION FOR WHICH IS PAID FOR IN
ACCEPTABLE FOREIGN CURRENCY AND ACCOUNTED FOR IN
ACCORDANCE WITH THE RULES AND REGULATIONS OF THE BSP;

“(M) SERVICES RENDERED TO PERSONS OR ENTITIES WHOSE
EXEMPTION UNDER SPECIAL LAWS OR INTERNATIONAL
AGREEMENTS TO WHICH THE PHILIPPINES IS A SIGNATORY
EFFECTIVELY EXEMPTS THE SUPPLY OF SUCH SERVICES;

“(N) SERVICES RENDERED TO PERSONS ENGAGED IN
INTERNATIONAL SHIPPING OR INTERNATIONAL AIR
TRANSPORT OPERATIONS, INCLUDING LEASES OF PROPERTY FOR
USE THEREOF;

“(O) SERVICES PERFORMED BY SUBCONTRACTORS AND/OR
CONTRACTORS IN PROCESSING, CONVERTING, OF
MANUFACTURING GOODS FOR AN ENTERPRISE WHOSE EXPORT
SALES EXCEED SEVENTY PERCENT (70%) OF TOTAL ANNUAL
PRODUCTION;

“(P) TRANSPORT OF PASSENGERS AND CARGO BY AIR OR SEA
VESSELS FROM THE PHILIPPINES TO A FOREIGN COUNTRY;


“Q) SALE OF POWER OR FUEL GENERATED THROUGH
RENEWABLE SOURCES OF ENERGY SUCH AS, BUT NOT LIMITED
TO, BIOMASS, SOLAR, WIND, HYDROPOWER, GEOTHERMAL,
OCEAN ENERGY, AND OTHER EMERGING ENERGY SOURCES
USING TECHNOLOGIES SUCH AS FUEL CELLS AND HYDROGEN
FUELS;

“(R) TRANSACTIONS WHICH ARE EXEMPT UNDER
INTERNATIONAL AGREEMENTS TO WHICH THE PHILIPPINES IS A
SIGNATORY OR UNDER SPECIAL LAWS, EXCEPT THOSE UNDER
PRESIDENTIAL DECREE NO. 529;

“(S) SALES BY AGRICULTURAL COOPERATIVES DULY REGISTERED
WITH THE COOPERATIVE DEVELOPMENT AUTHORITY TO THEIR
MEMBERS AS WELL AS SALE OF THEIR PRODUCE, WHETHER IN ITS
ORIGINAL STATE OR PROCESSED FORM, TO NON-MEMBERS;
THEIR IMPORTATION OF DIRECT FARM INPUTS, MACHINERIES
AND EQUIPMENT, INCLUDING SPARE PARTS THEREOF, TO BE
USED DIRECTLY AND EXCLUSIVELY IN THE PRODUCTION
AND/OR PROCESSING OF THEIR PRODUCE;

“(T) GROSS RECEIPTS FROM LENDING ACTIVITIES BY CREDIT OR
MULTI-PURPOSE COOPERATIVES DULY REGISTERED WITH THE
COOPERATIVE DEVELOPMENT AUTHORITY;

“(U) SALES BY NON-AGRICULTURAL, NON-ELECTRIC AND NON-
CREDIT COOPERATIVES DULY REGISTERED WITH THE
COOPERATIVE DEVELOPMENT AUTHORITY: PROVIDED, THAT
THE SHARE CAPITAL CONTRIBUTION OF EACH MEMBER DOES
NOT EXCEED FIFTEEN THOUSAND PESOS (P15,000) AND
REGARDLESS OF THE AGGREGATE CAPITAL AND NET SURPLUS
RATABLY DISTRIBUTED AMONG THE MEMBERS;

“(V) EXPORT SALES, OR THE SALE AND ACTUAL SHIPMENT OF
GOODS FROM THE PHILIPPINES TO A FOREIGN COUNTRY,
IRRESPECTIVE OF ANY SHIPPING ARRANGEMENT THAT MAY BE
AGREED UPON WHICH MAY INFLUENCE OR DETERMINE THE
TRANSFER OF OWNERSHIP OF THE GOODS SO EXPORTED AND
PAID FOR IN ACCEPTABLE FOREIGN CURRENCY OR ITS
EQUIVALENT IN GOODS OR SERVICES, AND ACCOUNTED FOR IN
ACCORDANCE WITH THE RULES AND REGULATIONS OF THE BSP;
THE SALE OF RAW MATERIALS OR PACKAGING MATERIALS TO A
NONRESIDENT BUYER FOR DELIVERY TO A RESIDENT LOCAL


EXPORT-ORIENTED ENTERPRISE TO BE USED IN
MANUFACTURING, PROCESSING, PACKING OR REPACKING IN
THE PHILIPPINES OF THE SAID BUYER'S GOODS AND PAID FORIN
ACCEPTABLE FOREIGN CURRENCY AND ACCOUNTED FOR IN
ACCORDANCE WITH THE RULES AND REGULATIONS OF THE BSP;
SALE OF RAW MATERIALS OR PACKAGING MATERIALS TO
EXPORT ORIENTED ENTERPRISE WHOSE EXPORT SALES EXCEED
SEVENTY PERCENT (70%) OF TOTAL ANNUAL PRODUCTION;
THOSE CONSIDERED EXPORT SALES UNDER EXECUTIVE ORDER
NO. 226, OTHERWISE KNOWN AS THE ‘OMNIBUS INVESTMENT
‘CODE OF 1987’, AND OTHER SPECIAL LAWS; AND SALE OF GOODS,
SUPPLIES, EQUIPMENT AND FUEL TO PERSONS ENGAGED IN
INTERNATIONAL SHIPPING OR INTERNATIONAL AIR
TRANSPORT OPERATIONS SHALL BE CONSIDERED AS EXPORT
SALES;

“(W) FOREIGN-CURRENCY DENOMINATED SALE, OR SALE TO A
NONRESIDENT OF GOODS, EXCEPT THOSE MENTIONED IN
SECTIONS 146 AND 147, ASSEMBLED OR MANUFACTURED IN THE
PHILIPPINES FOR DELIVERY TO A RESIDENT IN THE PHILIPPINES,
PAID FOR IN ACCEPTABLE FOREIGN CURRENCY AND
ACCOUNTED FOR IN ACCORDANCE WITH THE RULES AND
REGULATIONS OF THE BSP;

“(X) SALE OF REAL PROPERTIES NOT PRIMARILY HELD FOR SALE
TO CUSTOMERS OR HELD FOR LEASE IN THE ORDINARY COURSE
OF TRADE OR BUSINESS OR REAL PROPERTY UTILIZED FOR LOW-
COST AND SOCIALIZED HOUSING AS DEFINED BY REPUBLIC ACT
NO. 7279, OTHERWISE KNOWN AS THE URBAN DEVELOPMENT
AND HOUSING ACT OF 1992, AND OTHER RELATED LAWS,
RESIDENTIAL LOT VALUED AT TWO MILLION PESOS (P2,000,000.00)
AND BELOW, HOUSE AND LOT, AND OTHER RESIDENTIAL
DWELLINGS VALUED AT THREE MILLION PESOS (P3,000,000.00)
AND BELOW: PROVIDED, THAT NOT LATER THAN JANUARY 31,
2023 AND EVERY THREE (3) YEARS THEREAFTER, THE AMOUNT
HEREIN STATED SHALL BE ADJUSTED TO THEIR PRESENT VALUES
USING THE CONSUMER PRICE INDEX, AS PUBLISHED BY THE
PHILIPPINE STATISTICS AUTHORITY (PSA);

“(Y) LEASE OF A RESIDENTIAL UNIT WITH A MONTHLY RENTAL
NOT EXCEEDING TEN THOUSAND PESOS (P10,000.00): PROVIDED,
THAT NOT LATER THAN JANUARY 31, 2023 AND EVERY THREE (3)
YEARS THEREAFTER, THE AMOUNT HEREIN STATED SHALL BE


ADJUSTED TO ITS PRESENT VALUE USING THE CONSUMER PRICE
INDEX AS PUBLISHED BY THE PSA;

“(Z) SALE, IMPORTATION, PRINTING OR PUBLICATION OF BOOKS
AND 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 PAID ADVERTISEMENTS;

“(AA) TRANSPORT OF PASSENGERS BY INTERNATIONAL
CARRIERS;

“(BB) SALE, IMPORTATION OR LEASE OF PASSENGER OR CARGO
VESSELS AND AIRCRAFT, INCLUDING ENGINE, EQUIPMENT AND
SPARE PARTS THEREOF FOR DOMESTIC OR INTERNATIONAL
TRANSPORT OPERATIONS;

“(CC) IMPORTATION OF FUEL, GOODS AND SUPPLIES BY PERSONS
ENGAGED IN INTERNATIONAL SHIPPING OR AIR TRANSPORT
OPERATIONS;

“(DD) SALE OF GOLD TO THE BSP;

“(EE) SERVICES OF BANK, NON-BANK FINANCIAL
INTERMEDIARIES PERFORMING QUASI-BANKING FUNCTIONS,
AND OTHER NON-BANK FINANCIAL INTERMEDIARIES; AND

“(FF) SALE OR LEASE OF GOODS OR PROPERTIES OR THE
PERFORMANCE OF SERVICES OTHER THAN THE TRANSACTIONS
MENTIONED IN THE PRECEDING PARAGRAPHS, THE GROSS
ANNUAL SALES AND/OR RECEIPTS DO NOT EXCEED THE
AMOUNT OF THREE MILLION PESOS (P3,000,000): PROVIDED, THAT
NOT LATER THAN JANUARY 31, 2023 AND EVERY THREE (3) YEARS
THEREAFTER, THE AMOUNT HEREIN STATED SHALL BE
ADJUSTED TO ITS PRESENT VALUE WITH FOOTNOTE IN THE
BOOK VALUE USING THE CONSUMER PRICE INDEX, AS
PUBLISHED BY THE PSA;

CHAPTER II - COMPLIANCE REQUIREMENTS

“SEC. 110. INVOICING AND ACCOUNTING REQUIREMENTS FOR
SALES TAX REGISTERED PERSONS. -


“(A) INVOICING REQUIREMENT. - A SELLER, PROVIDER OR
LESSOR OF GOODS, SERVICES OR PROPERTIES SHALL ISSUE:

“(1) INVOICE FOR EVERY SALE, BARTER OR EXCHANGE OF GOODS
OR PROPERTIES; AND

“(2) OFFICIAL RECEIPT FOR EVERY LEASE OF GOODS OR
PROPERTIES, AND FOR EVERY SALE, BARTER OR EXCHANGE OF
SERVICES.

“(B) INFORMATION CONTAINED IN THE INVOICE OR OFFICIAL
RECEIPT. - THE FOLLOWING INFORMATION SHALL BE INDICATED
IN THE INVOICE OR OFFICIAL RECEIPT:

“(1) THE TAXPAYER'S IDENTIFICATION NUMBER (TIN);

“(2) THE TOTAL AMOUNT WHICH THE PURCHASER PAYS OR IS
OBLIGATED TO PAY TO THE SELLER WITH THE INDICATION THAT
SUCH AMOUNT INCLUDES THE SALES TAX: PROVIDED, THAT:

“(A) THE AMOUNT OF THE TAX SHALL BE SHOWN AS A SEPARATE
ITEM IN THE INVOICE OR RECEIPT;

“(B) IF THE SALE IS EXEMPT FROM SALES TAX, THE TERM ‘TAX
EXEMPT SALE’ SHALL BE WRITTEN OR PRINTED PROMINENTLY
ON THE INVOICE OR RECEIPT;

“(C) IF THE SALE INVOLVES GOODS, PROPERTIES OR SERVICES
SOME OF WHICH ARE SUBJECT TO AND SOME OF WHICH ARE
SALES TAX EXEMPT, THE INVOICE OR RECEIPT SHALL CLEARLY
INDICATE THE BREAK-DOWN OF THE SALE PRICE BETWEEN ITS
TAXABLE AND EXEMPT COMPONENTS, AND THE CALCULATION
OF THE SALES TAX ON EACH PORTION OF THE SALE SHALL BE
SHOWN ON THE INVOICE OR RECEIPT: PROVIDED, THAT THE
SELLER MAY ISSUE SEPARATE INVOICES OR RECEIPTS FOR THE
TAXABLE AND EXEMPT COMPONENTS OF THE SALE.

“3) THE DATE OF TRANSACTION, QUANTITY, UNIT COST, AND
DESCRIPTION OF THE GOODS OR PROPERTIES OR NATURE OF
THE SERVICE; AND

“(4) IN THE CASE OF SALES AMOUNTING TO ONE THOUSAND
PESOS (P1,000.00) OR MORE, THE NAME, BUSINESS STYLE, IF ANY,


ADDRESS AND TAXPAYER IDENTIFICATION NUMBER (TIN) OF
THE PURCHASER, CUSTOMER OR CLIENT.

“(C) ACCOUNTING REQUIREMENTS. - NOTWITHSTANDING THE
PROVISIONS OF SECTION 230, ALL PERSON SUBJECT TO THE
SALES TAX UNDER SECTIONS 106 AND 108 SHALL, IN ADDITION
TO THE REGULAR ACCOUNTING RECORDS REQUIRED, MAINTAIN
A SUBSIDIARY SALES JOURNAL AND SUBSIDIARY PURCHASE
JOURNAL ON WHICH THE DAILY SALES AND PURCHASES ARE
RECORDED. THE SUBSIDIARY JOURNALS SHALL CONTAIN SUCH
INFORMATION AS MAY BE REQUIRED BY THE SECRETARY OF
FINANCE.

“(D) CONSEQUENCE OF ISSUING ERRONEOUS INVOICE OR
OFFICIAL RECEIPT. - IF A SELLER ISSUES AN INVOICE OR OFFICIAL
RECEIPT FOR A TAX-EXEMPT TRANSACTION, BUT FAILS TO
DISPLAY PROMINENTLY ON THE INVOICE OR RECEIPT THE TERM.
‘TAX EXEMPT SALE’, THE ISSUER SHALL BE LIABLE TO ACCOUNT
FOR THE TAX IMPOSED IN SECTION 106 OR SECTION 108 AS IF
SECTION 109 DID NOT APPLY.

“(E) TRANSITIONAL PERIOD. - NOTWITHSTANDING SUBSECTION
(B) HEREOF, TAXPAYERS MAY CONTINUE TO ISSUE VAT INVOICES
AND VAT OFFICIAL RECEIPTS UNTIL DECEMBER 31, 2020 IN
ACCORDANCE WITH DEPARTMENT OF FINANCE ISSUANCES AND
BUREAU OF INTERNAL REVENUE ADMINISTRATIVE PRACTICES
THAT EXISTED AS OF DECEMBER 31, 2019.”

“SEC. 111. RETURN AND PAYMENT OF SALES TAX. —

“(A) IN GENERAL. - EVERY PERSON LIABLE TO PAY THE SALES TAX
IMPOSED UNDER THIS TITLE SHALL FILE A QUARTERLY RETURN
OF THE AMOUNT OF HIS GROSS SALES OR RECEIPTS WITHIN
TWENTY-FIVE (25) DAYS FOLLOWING THE CLOSE OF EACH
TAXABLE QUARTER PRESCRIBED FOR EACH TAXPAYER:
PROVIDED, HOWEVER, THAT THE TAXPAYER SHALL PAY THE
SALES TAX ON A MONTHLY BASIS.

“ANY PERSON, WHOSE REGISTRATION HAS BEEN CANCELLED IN
ACCORDANCE WITH SECTION 233, SHALL FILE A RETURN AND
PAY THE TAX DUE THEREON WITHIN TWENTY-FIVE (25) DAYS
FROM THE DATE OF CANCELLATION OF REGISTRATION:
PROVIDED, THAT ONLY ONE CONSOLIDATED RETURN SHALL BE


FILED BY THE TAXPAYER FOR HIS PRINCIPAL PLACE OF BUSINESS
OR HEAD OFFICE AND ALL BRANCHES.

“(B) WHEN TO FILE THE RETURN AND PAY THE TAX. - EXCEPT AS
THE COMMISSIONER OTHERWISE PERMITS, THE RETURN SHALL
BE FILED WITH AND THE TAX PAID TO AN AUTHORIZED AGENT
BANK, REVENUE COLLECTION OFFICER OR DULY AUTHORIZED
CITY OR MUNICIPAL TREASURER IN THE PHILIPPINES LOCATED
WITHIN THE REVENUE DISTRICT WHERE THE TAXPAYER IS
REGISTERED OR REQUIRED TO REGISTER.

“(C) WITHHOLDING OF SALES TAX. - THE GOVERNMENT OR ANY
OF ITS POLITICAL SUBDIVISIONS, INSTRUMENTALITIES OR
AGENCIES, INCLUDING GOVERNMENT-OWNED OR CONTROLLED
CORPORATIONS (GOCCs) SHALL, BEFORE MAKING PAYMENT ON
ACCOUNT OF EACH PURCHASE OF GOODS AND SERVICES WHICH
ARE SUBJECT TO THE SALES TAX IMPOSED IN SECTIONS 106 AND
108 OF THIS CODE, DEDUCT AND WITHHOLD THE SALES TAX
IMPOSED IN SECTIONS 106 AND 108 OF THIS CODE AT THE RATE
OF FOUR PER CENT (4%) OF THE GROSS PAYMENT THEREOF.
PAYMENT FOR LEASE OR USE OF PROPERTIES OR PROPERTY
RIGHTS TO NONRESIDENT OWNERS SHALL ALSO BE SUBJECT TO
FOUR PER CENT (4%) WITHHOLDING TAX AT THE TIME OF
PAYMENT. FOR PURPOSES OF THIS SECTION, THE PAYOR OR
PERSON IN CONTROL OF THE PAYMENT SHALL BE CONSIDERED
AS THE WITHHOLDING AGENT.

“THE SALES TAX WITHHELD UNDER THIS SECTION SHALL BE
REMITTED WITHIN TEN (10) DAYS FOLLOWING THE END OF THE
MONTH THE WITHHOLDING WAS MADE.”

“SEC. 112. POWER OF THE COMMISSIONER TO SUSPEND THE
BUSINESS OPERATIONS OF A TAXPAYER. - THE COMMISSIONER
OR HIS AUTHORIZED REPRESENTATIVE IS HEREBY EMPOWERED
TO SUSPEND THE BUSINESS OPERATIONS AND TEMPORARILY
CLOSE THE BUSINESS ESTABLISHMENT OF ANY PERSON FOR ANY
OF THE FOLLOWING VIOLATIONS:

“(A) IN THE CASE OF SALES TAX REGISTERED PERSON. -
“(1) FAILURE TO ISSUE RECEIPTS OR INVOICES;

“(2) FAILURE TO FILE A SALES TAX RETURN AS REQUIRED UNDER


SECTION 111; OR

“(3) UNDERSTATEMENT OF TAXABLE SALES OR RECEIPTS BY
THIRTY PER CENT (30%) OR MORE OF HIS CORRECT TAXABLE
SALES OR RECEIPTS FOR THE TAXABLE QUARTER.

“(B) FAILURE OF ANY PERSON TO REGISTER AS REQUIRED UNDER
SECTION 233. THE TEMPORARY CLOSURE OF THE
ESTABLISHMENT SHALL BE FOR THE DURATION OF NOT LESS
THAN FIVE (5) DAYS AND SHALL BE LIFTED ONLY UPON
COMPLIANCE WITH WHATEVER REQUIREMENTS PRESCRIBED BY
THE COMMISSIONER IN THE CLOSURE ORDER.”

SEC. 2. Section 116, Title V of the National Internal Revenue Code,
amended, is hereby renumbered and amended to read as follows:

“SEC. 113 [116]. Tax on Persons Exempt from SALES TAX [Value-Added
Tax (VAT)]. - Any person whose sales or receipts are exempt under Section
109(EF) [(V)] of this Code from the payment of SALES [value-added] tax and
who is not a SALES TAX [VAT-] registered person shall pay a tax
equivalent to three percent (3%) of his gross quarterly sales or receipts:
Provided, That cooperatives shall be exempt from the three percent (3%)
gross receipts tax herein imposed.”

All succeeding, sections of the Code are hereby renumbered accordingly.

SEC. 3. Section 236, Chapter II, Title IX of the National Internal Revenue

Code, as amended, is hereby renumbered and amended to read as follows:
“SEC. 233 [236]. Registration Requirements. -
(A) XXX

“(B)XXX
“(C}XXX

“(D) XXX
“E)XXX
“(F) Cancellation of Registration. —

“(1) General Rule. - The registration of any person who ceases to be liable to


a tax type shall be cancelled upon filing with the Revenue District Office
where he is registered an application for registration information update in a
form prescribed therefor.

“(2) Cancellation of SALES [Value-Added] Tax Registration. - A SALES
TAX [VAT-] registered person may cancel his registration for SALES TAX
[VAT] if:

“(a) He makes written application and can demonstrate to the
‘Commissioner's satisfaction that his gross sales or receipts for the following
twelve (12) months, other than those that are exempt under Section 109 (A)
to (EE) [(U)], will not exceed THREE MILLION PESOS (P3,000,000.00) [One
million five hundred thousand pesos (P1,500,000)]; or

“(b) He has ceased to carry on his trade or business, and does not expect to
recommence any trade or business within the next twelve (12) months.

“The cancellation of registration will be effective from the first day of the
following month.

“(G) Persons Required to Register for SALES [Value-Added] Tax. —

“(1) Any person who, in the course of trade or business, sells, barters or
exchanges goods or properties, or engages in the sale or exchange of
services, shall be liable to register for SALES [value added] tax if:

“(a) His gross sales or receipts for the past twelve (12) months, other than
those that are exempt under Section 109(A) to (FF) [(V)], have exceeded
THREE MILLION PESOS (P3,000,000.00) [One million five hundred
thousand pesos (P1,500,000)]; or

“(b) There are reasonable grounds to believe that his gross sales or receipts
for the next twelve (12) months, other than those that are exempt under
Section 109(A) to (FF) [(V)], will exceed THREE MILLION PESOS
(P3,000,000.00) [One million five hundred thousand pesos (P1,500,000)]; or

“(2) Every person who becomes liable to be registered under paragraph (1)
of this Subsection shall register with the Revenue District Office which has
jurisdiction over the head office or branch of that person, and shall pay the
annual registration fee prescribed in Subsection (B) hereof. If he fails to
register, he shall be liable to pay the tax under Title IV as if he were a SALES.
TAX [VAT] registered person [, but without the benefit of input tax credits

for the period in which he was not properly registered].


“(H) Optional Registration for SALES [Value-Added] Tax of Exempt Person.

“(1) Any person who is not required to register for SALES [value-added] tax
under Subsection (G) hereof may elect to register for SALES [value-added]
tax by registering with the Revenue District Office that has a jurisdiction
over the head office of that person, and paying the annual registration fee in
Subsection (B) hereof.

(2) Any person who elects to register under this Subsection shall not be
entitled to cancel his registration under Subsection (F) (2) for the next three
3) years.

“For purposes of Title IV of this code, any person who has registered SALES
[value-added] tax as a tax type in accordance with the provisions of
Subsection (C) hereof shall be referred to as a ‘SALES TAX [VAT-]
registered person’ who shall be assigned only one Taxpayer Identification
Number (TIN).”

SEC. 4. All exemptions from value-added tax mandated in other special laws
shall continue to be recognized as exemptions from the sales tax imposed by this
Act.

All other reference to value-added tax elsewhere in the Code or in other laws,
executive orders, and rules and regulations shall henceforth be understood as
referring to sales tax.

SEC. 5. Upon the effectivity of this Act, no carry-over of excess input taxes as
of December 31, 2020 shall be allowed. Nonetheless, all VAT-registered persons may
claim for refund or apply for the issuance of tax credit certificate of their excess input
taxes as of December 31, 2020. Claims for refund or application for tax credit
certificate from zero-rated or effectively zero-rated sales as of December 31, 2020
shall also be allowed. All such claims for refund or application of tax credit
certificates should be filed before the Commissioner of Internal Revenue not later
than December 31, 2022.

SEC. 6. The Department of Finance and the Bureau of Internal Revenue shall
promulgate the necessary rules and regulations for the effective implementation of
this Act.

SEC. 7. If any part or provision of this Act is declared invalid or
unconstitutional, the remaining parts or provisions not affected shall remain in full

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force and effect.

SEC. 8, All laws, decrees, executive orders, rules and regulations or parts
thereof which are contrary to or inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly.

SEC. 9, This Act shall take effect on January 1, 2021, following its complete
publication in the Official Gazette or in a newspaper of general circulation.

Approved.

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