NTATIVES.

OF REPRE
Quezon City

Eighteenth Congress
First Regular Session

House Bill No, 2704

Introduced by REPRES ATIVE AURELIO D. GONZALES, JR.

EXPLANALORY NOTE

‘This bill covers the second package of the Duterte administration's comprehensive tax
reform program. It complements the recently-passed Tax Reform for Acceleration and
Inclusion Act or Republic Act No. 10963 by further addressing the inequitability in our
taxation system,

Specifically, this measure proposes the lowering of corporate income tax rate,
reforming the corporate income tax system, broadening the tax base by modernizing
investment tax incentives, removing excessive tax exemptions and privileges given to curtain
industries, and limiting the grant of tax incentives to strategic industries and lagging regions

Through these amendments, we will be able to enhance fairness. improve
competitiveness, plug leakages, and achieve fiscal sustainabilily. In view of the foregoing
considerations, the immediate passage of this bill is eamestly sought

AUREL! GYNZALES, JR.
3" Distfict, Pampanga


REPUBLIC OF THE PLILIPPIS
HOUSE OF REPRESENTATIV
Quezon City

Eighteenth Congress
First Regular Session

House Bill No, _ 2704

Introduced by REPRESENTATIVE AURELIO D. GONZALE!

AN ACT AMENDING SECTIONS, 20, 22, 27, 28, 34, 40, 50, 73, 112, 119, 203, 204, 220,
222, 228, 237, 237-A, 248. 6, 257, 258, 259, 260, 261, 262, 263, 264, 265, 266,
275, 290, 291, 292 AND ADDING SECTIONS 293, 294, 295, 296, 297, 298,
300, 301, 302, 303, 304, 305, AND 306 UNDER CHAPTERS 1, IL, WL TV, V AND VI,
ALI, UNDER TITE NATIONAL INTERNAL REVENUE CODE OF 1997, AS

AMENDED, AND FOR OTHER PURPOSES

Re ir enacted by the Senate and the House of Representatives of the Philipines 1h
Congress assembled.

SECTION 1. Tide. This Act shall be known as the “Corporate Income Tax and
Tncentives Reform Act.”

SEC. 2. A new section shall be inserted as Section 6-A of the National Internal

Rovemie Code of 1997, as amended. to read as follow:

“SECTION 6-4 — POWER OF THE COMMISSIONER TO ISSU.
SUBPOENA DUCES TECUM; WOW SERVICE OF SUBPOENA DU‘
TECUM IS MADE. ~ PURSUANT TO SECTION :
CASE THE INFORMATION OR RECORDS Ri
FURNISHED WITHIN THE PERIOD PRE: IN THE
WRITTEN NOTICE, OR WHEN THE INFORMATION OR RECORDS
SUBMITTED ARE INCOMPLETE, THE COMMISSIONER OR HIS
DULY —AUTIORTZED _REPRESENTS1 IVE, HALT. ISSUE A

THE. PARTICU AR DOCUMENTS - OR
ND THE TAXPAYER LIABLE


THE SERVICE OF SUBPOENA DUCES TECUM SHALL BE
EFFECTED BY THE REVENUE OFFICERS ASSIGNED ‘TO
INVESTIGATE THE CASE. HOWEVER, SUCH SERVICE MAY BE
MADE BY ANY OTHER INTERNAL REVENUE OFFICER
AUTHORIZED FOR THE PURPOSE.

THE SUBPOENA DUCES TECUM SHALL BE SERVED
THROUGH PERSONAL SERVICE, BUT IF NOT PRACTICABLE, IT
SHALL BE SERVED BY SUBSTITUTED SERVICE IN
ACCORDANCE WITH THE RULES OF THE COURT.

A CRIMINAL ACTION MAY BE INSTITUTED VOR FAILURE
FO OBEY THE SUBPOENA DUCES TECUM.

SEC. 3. A new section shall be inserted as Section 6-B of the National Internal

Revenue Code of 1997, as amended, to read as follows:

hereby

“SECTION 6.
ASSESSMENT NOTICI

SERVICE OF LETTER OF AUTHORITY, AND
S ISSUED BY THE BUREAU. - THE NOTICE
TO THE TAXPAYER HEREIN REQUIRED MAY BE SERVED BY
THE COMMISSIONER OR HIS DULY = AUTHORIZED
REPRESENTATIVE THROUGH — PERSO! BY
DELIVERING PERSONALLY A COPY THEREOF TO THE PARTY
AT HIS REGISTERED OR KNOWN ADDRESS OR WHEREVER HE
MAY BE FOUND. A KNOWN ADDRESS SHALL, MEAN A PLAC!
OTHER THAN THE REGISTERED ADDRESS WHERE BLISINE!
ACTIVITIES OF THE PARTY ARE CONDUCTED OR HIS PLACE
OF RESIDENCE. IN CASE PERSONAL SERVICE 18 NOT
PRACTICABLE, ‘THLE NOTICE SHALL BE SERVED BY
SUBSTLIUTED SERVICE IN ACCORDANCE WUTTI TIE RULES OF
THE COURT.

SEC. 4. Section 20 of the National Internal Revenue Code of 1997, as amended, is

further amended to read as follows:

©. 20. Submisston of Report and Pertinent Information by the Co

(A) xxx

(B) SUBMISSION OF TAX-RELATED INFORMATION 10 THE
DEPARTME. OF FINAN - THE COMMISSIONER SHALL,
UPON THE REQUEST OF THE SECRETARY OF FINANCE
SPECIFICALLY IDENTIFYING THE NEEDED INFORMATION AND.
JUSTIFICATION FOR SUCIE REQUEST, FURNISH THE

SECRETARY = PERTINENT = TAXPAYER INFORMATIC
PROVIDED, HOWEVER, THAT TIE SECRETARY AND rs
RELEVANT OFFICERS HANDLING SUCH SPECIFIC

INFORMATION SHALL BE COVERED BY TH
SECTION 270, UNLESS TAXPAYER CONSED
SUCTI DISCLOSURE.

PROVISIONS OF
‘S$ IN WRITING TO.



{ 0B) )(C) Repart to Oversight Committe. - The Commissioner ,
with reference to Section 204 of this Code, submit to the Oversight Committee
referred to in Section 290 hereof, through the Chairmen of the Committee on
Ways and Means of the Senate and Ilouse of Representatives, a report on the
exercise of his powers pursuant to tho said Section, every six (6) months of
each calendar year.”

SEC. 5. Section 22 of the National Internal Revenue Code of 1997, as amended, is
hereby further amended to read as follows:

“(Ay ax
(B) xxx
EC) ans
(Dy xxx

(F) The term ‘nonvesiclent citizen’ means:

(1) A citizen of the Philippines who establishes to the satisfaction of
the Commissioner the fact of his physical prosenve aloud with a definite
intention to reside therein.

{ (2) A citizen of the Philippines who leaves the Philippines during the
to reside abroad, either as an immigrant or for employment on a
permanent basis. }

| (3) |@) A citizen of the Philippines who works and derives income
from abroad and whose employment thereat requires him to be physically
present [ abroad most of the time ] FOR 183 DAYS OR MORE during the
taxable year.

| 4) | @) A citizen who has been previously considered as nonresident
nd who arrives in the Philippines at any time during the laxable year
to teside permanently in the Philippines shall likewise be treated asa
nonrvsident citizen for the taxable year in which he arrives in the Philippines
with respect to his income derived from sources abroad until the date of his
arrival in the Philippines,

citizen

[ (3) ] G) The taxpayer shall submit proof te thy Commissioner to
show his intention of leaving the Philippines to reside permanently abroad or
to retum to andl reside in the Philippines as the case may be for purpose of this
Section.”

SEC. 6. Section 25 of the National Intemal Revenue Code of 1997. as amended, is
hereby farther amended to read as follows:


“SEC. 25, Tax on Nonresident Alien Individual. -

(A) Nonresident Alien Engaged in Trade or Business Within the
Philippines.

NNNNNN NN!

(B) Nonresident Alien Not Engaged in Trade or Business Within the
Philippines.—

XNNND

[(C) Alien Indivicinal Employed by Regional or Area Headquarters
and Regional Operating Headquarters of Muitinational Companies.- ‘Unere
shall be levied, collected and paid for each taxable year upon the gross income
received by every alien individual employed by regional or area headquarters
and regional operating headquarters established in the Philippines by
multinational companies as salaries, wages, annuilics, compensation,
remuneration and other emoluments, such as honoraria and allowances, from
such regional or area headquarters and regional operating headquarters, a tax
equal to fifteen percent (15%) of such gross income: Provided. however, T
the same tax treatment shall apply to Filipinos employed and occupying the
same position as those of aliens employed by these muftinational companies.
For purposes of this Chapter, the term ‘multinational company’ means a
foreign firm or entity engaged in international wade with affiliates or
subsidiaries or branch offices in the Asia-Pacific Region and other foreign
markets. |

[@)-4 Tndridual Emploved by Offshore Banking Units. - Vhere
shall be levied. collected and paid for each taxable year upon the gross income
received by every alien individual employed by offshore banking units
established in the Philippines as salaries, wages. annuities, compensation,
remuneration and other emoluments, such as honoraria and allowances, from
such offshore bunking unils. a tax equal fo fifteen percent (15%) of such gross
income: Provided, however, ‘Vhat the same tax treatment shall apply to
Filipinos cmployed and occupying the same positions as those of aliens
employed by these offshore banking units. |

[() then Individtal Employed by Peroleum Service Contractor aid
Subcontractor. ~ An Alien individual who is a permanent resident of a Lorcign
country but who is employed and assigned in the Philippines by a foreign
service contractor or by a foreign service subcontractor engaged in petroleum
operations in the Philippines shall be liable to a tax of [illcen percent (15%) of
the salaries, wages, annuities, compensation, remuneration and other
emoluments, such as honoraria and allowances, received from such contractor
or subcontractor: Provided, however, That the same tax treatment shall apply
to a Filipino employed and ovcupying the same position as an alien employed
by petroleum service contractor and subcontractor. |



| Any income earned fiom all other sources within the Philippines by
the alicn employees referred to under Subscetions (C), (D) and (E) hero! shall
be subject to the pertinent income tax, as the case may bo. imposed under this
Code, |

SEC. 7. Section 27 of the National Internal Revere Code of 1997, as amended, is
hereby further amended to read as follows:

“SEC. 27. Rates of income tax on Domestic Corporations. ~

(A) In General, ~ Except as otherwise provided in this Code, AN
INCOME TAX RATE OF PERCENT (30%), is hereby imposed upon the
taxable income derived during each taxable year from all sources within and
without the Philippines by every corporation, as defined in Section 22(B) of
this Code and taxable under this Tille as a corporation, organized in, or
existing under the laws of the Philippines: | Provided, that effective January
1, 2009, the rate of income tax shall be thirty percent (30%). ] PROVIDED,
THAT THE RATE OF CORPORATE INCOME ‘TAX SHALL BE
TWENTY EIGHT PERCENT (28%) BEGINNING JANUARY 1, 2021;
TWENTY SIX PERCENT (26%) BEGINNING JANUARY 1, 2023;
TWENTY FOUR PERCENT (24%) BEGINNING JANUARY 1, 2025;
TWENTY TWO PERCENT (22%) BEGINNING JANUARY 1, 2027:
AND TWENTY PERCENT (20%) BEGINNING JANUARY 1, 2029.
PROVIDED FURTHER THAT THE PRESIDENT MAY ADVANCE
THE SCHEDULED REDUCTION IN THE CORPORATE INCOME
WHEN ADEQUATE SAVINGS ARE REALIZED FROM

RATIONALIZATION — OF INCENTIVES, AS
TIFIED BY THE SECRETARY OF FINANCE.

In the case of corporations adopting, the fiscai-year accounting period,
the taxable income shall be computed without regard to the specific date when
specific sales, purchases and other transactions occur. ‘Their income and
expenses for the fiscal year shall be deemed to have been eamed and spent
equally for cach month of the period.

The corporate income tax rate shall be applied on the amount
computed by multiplying the number of months covered by th
within the fiscal year by the taxable income of the corporation for the period,
divided by twelve.

new tate

[ Provided further, That the President. upon the recommendation of
the Secretary of Finance, may: ctlective January 1, 2000, allow corporations
the option to be taxed at fifleen percent (15%) of gross income as defined
hereinafter the following conditions have been satistivd:

(1) A tay effort ratio of twenty percent (20%) of Gross
National Product (GNP):

(2) A ratio of forty percent (40%) of income tax collection to
total tay revenues;


(3) A VAT tax effort of four percent (4%) of GNP: and

(4) A 0.9 percent (0.9%) ratio of the Consolidated Public
Sector Financial Position (CPSFP) to GNP.

The option to be taxed hased on gross income shall be avaifable only to
firms whose ratio of cust of sales to gross sales or receipts from all sources
does not exceed fifty-five percent (35%).

The election of the gross income tax option by the corporation shall be
irrevocable for three (3) consecutive taxable years during which the
conporation is qualified under the scheme.

For purposes of this Section, the term ‘grass income’ derived from
business shall be equivalent to gross sales tess sales returns, discounts and
allowances and cost of goods sold. “Cost of goods sold’ shall include all
business expenses directly incurred to produce the merchandise to bring them
to their present location and use

Vor a trading or merchandising concem, ‘ost of gonkis sold” shall
include the invoice cost of the goods sold, plus import dutics. freight in
transporting the goods to the place where the goods are actually sold,
including insurance while the goods are in transit. J

{ For a manufacturing concern, ‘cost of goods manufactured and sold’
shall include all costs of production of finished goods, such as raw
used, direct labor and manufacturing overhead. freight cost, insurance
premiums and other costs incurred to bring the raw materials to the factory or
warehouse.

In the case of taxpayers engaged in the sale of service. ‘gross income”
means gross reccipls loss sales retums, allowances and discounts. |

(ByProprietary Educational Institutions and Hospitals.

Proprietary educational institutions and hospitals which are nonprofit
MAY pay a tax of tem percent (10%) on their taxable income except those
covered by Subsection (I>) hereof PROVIDED THAT THEY COMPLY
WITH ESTABLISHED PERFORMANCE CRITERIA TO BE
DETERMINED LUATED BY THE COMMISSION ON
R EDUCATION (CHED), DEPARTMENT OF EDUCATION
@EPED), AND DEPARTMENT OF HEALTH (DOH), PROVIDE!
THAT EDUCATIONAL INSTITUTIONS AND HOSPITALS THA’
FAIL TO MEET THE ESTABLISHED PERFORMANCE CRITERIA
SHALL BE SUBJFCTED TO THE REGULAR CORPORATE INCOME
TAX TWO Q) YEARS AFTER THE EFFECTIVITY OF THE ACT.
Provided FURTHER. that if the gross income from ‘unrelated trace, busrness
or other activity’ exceeds fifty percent (50°) of the (olal gross income derived
by such educational institutions or hospitals from all sources, the tax



sibed in Subsection (A) hereof shall be imposed on the entire taxable
For purposes of this Subsection. the form ‘unrelated trade, business or
activity’ means any trade, business or other activity. the conduct of
h is not substantially related to the exercise or performance by such
educational institution or hospital off ils primary purpose or function. A
‘proprietary educational tastimution’ is any private school maintained amd
administered by private individuals or groups with an issucd permit to operate
from the Department of Education, Culture and Sports (ECS). or the
Commission on Higher Education (CHED). or the Technical Education and
Skills Development Authority (TESDA). as the case may be, in accordance
with existing laws and regulations.

(C) Government-owned or —Controlled Corporation jes or
Instrumentalities. ~ The provisions of existing special or general laws to the
contrary notwithstanding, all corporations, ageneies, or instrumentalities
owned or controlled by the Government, except the Government Service
Insurance System (GSIS), the Social Security System (SSS), AND the
Philippine Health Insurance Corporation (PETC), [ and the local water districts
(IWDs) | shall pay such rate of tax upon their taxable income as are imposed
by this Section upon corporations or associations engaged in similar business.
industry, or activity.

(D) xxx

(F)

i’, 8. Section 28 of the National Internal Revenue Code of 1997, as amended, is
Ww further amended to read as follows:

“SEC. 28. Rates of Income Tax on Foreign Corporations. -

(A) Tax on Resident Foreign Corporations. ~

(QL) Ian General, ~ F:
corporation organized, authorized, or ¢:
country, engaged in trade or business within the Philippines. shall be subjce
come tax equivalent to THIRTY PERCENT (30%) [ thirty-five percent
(35%) ] of the taxable income derived in the preceding taxable year from all
sources within the Philippines: | Providect, That effective January 1, 2009, the
rate of income lax shall be thirty percent (30%). | PROFIDED, THAT THE
RATE OF CORPORATE INCOME TAX SHALL BE NTY EIGHT
CENT (28%) BEGINNING JANUARY 1, 202 TY SIN

an

PERCENT @4%) BEGINNING JANUARY 1, 2028; TWENTY TWO
PERCENT (22%) BEGINNING JANUARY 1, 2027, AND TWENTY
PERCENT (20%) BEGINNING JANUARY 1, 2029. PROVIDED
FURTHER THAT THE PRESIDENT MAY ADVANCE THE
SCHEDULED REDUCTION IN THE CORPORATE INCOME TAX
WHEN ADEQUATE SAVINGS ARE REALIZED FROM THE



RATIONALIZATION OF FISCAL INCE:
THE SECRETARY OF FINANC

TIVES, AS CERTIFIED BY

In the case of corporations adopting the fiscal-year accounting period.
the lavable income shall be computed without regard to the specifie date when
sales, purchases and other transactions ovcur. Their income and expenses for
the fiscal year shall be doemed to have been eamed and spent equally for each
month of the period.

The corporate income tax rate shall be applied on the amount
computed by multiplying the number of months covered by the new
Within the fiscal year by the taxable income of the corporation for the period,
divided by twelve.

rate

| Provided, however, That a resident foreign corporation shall be
granted the option to be taxed al fiflcen percent (13%) on gross income under
the same conditions, as provided in Section 27 (A). |

(2) xxx
(3) xxx

| (4) Offshore Banking Unis. ~ The provisions of any law (o the
contrary notwithstanding, income derived by offshore banking units
aulhorized by the BanghoSentral ng Pilipinas (BSP), from foreign currency
transactions with nonresidents, other offshore banking units, local commercial
banks, including branches of foreign banks that may be authorized by the
BangkoSentral ng Pilipinas (BSP) to transact business with offshore banking
units shall be exempt from all taxes except net income from such transactions
as may be specified by the Seeretary of Finance, upon recommendation of the
Monetary Board which shall he subject to the regular income tax payable by
banks: Provided, however, That any intcrest income derived from foreign
currency loans granted to residents other than offshore banking units or local
commercial banks, including local, branches of foreign bamks that may be
authorized by the BSP to transact business with offshore banking units, shal!
be subject only to a final tax at the rate of ten percent (10%).

Any income of nonresidents, whether individuals or corporations, from
transactions with said offshore banking units shall be exempt from income
tax]

105) ] 4) xxx

(6) Regional or Area Headquarters and Regional Gperaing
Headquarters of Multinational Companies.

(a) Regional or area headquarters as defined in S
not be subject to income las.

tion 22019) shall

9


(b) Regional operating headquarters as defined in Section 22(EE) shall
pay a tax of ten percent (10%) of their taxable income.

PROVIDED, THAT REGIONAL OR AREA HEADQUARTERS
AND REGIONAL OPERATING HEADQUARTERS SHALL BE
SUBJECTED TO THE REGULAR CORPORATE INCOME TAX TWO
(@) YEARS AFTER THE EFFECTIVITY OF THE AC

[ (7) ] G) Tax on Certain Incomes Recetved bv a Resident Foreign

Corporation.

(a) Interest from Deposits and Yield or any other Monetary Benefit
from Deposit Substitutes, ‘rust Funds and Similar Arrangements and
Royalties. Interest from any currency bank deposit and yicld or any other
monetary benefit from deposit substitutes and from tust funds and similar
arangements and royalties derived from sources within the Philippines shall
niect fo a final income (ax af the Tate of Oventy percent (20%) of such
interest: Provided, however, That interest income derived by a resident foreign
corporation from a depository bank under the expanded forvign currency
deposit system shall be subject to a final income tax at the rate of FIFTEEN
PERCENT (18%) | seven and one-half percent (7 '3%) | of such interest
income.

(b) Income Derived under the Expanded Foreign Currency Deposit System.
XXX

(c) Capital Gains from Sale of Shares of Stock Not Traded in the Stock
Fxchange. A final tax at the rate [ s prescribed below | OF RIFTEEN
PERCENT (15%) is hereby imposed upon the net capital gains realized
during the tasable year from the sale, barter. exchange or other disposition of
shares of stock in a domestic corporation except shares suld or disposed of
through the stock exchange:

[ Not over P100.000 $0
‘On any amount in excess of P100,000 10% |

(d) Intercorporate Dividends.- xxx

(B)

av on Nonresident Foreign Corporation. ~

In General, - Except as otherwise provided in this Code, a foreign
corporation not engaged in trade or business in the Philippines shall pay a ta
equal to THIRTY PERCENT (30%) | thirty-five percent (35%) | of the
gross income received during each taxable year from all sources within the
Philippines, such as interests, dividends, rents, royalties, salaries, premiums
(except reinsurance premiums), annuities, emoluments or other fixed or
determinable annual, periodic or casual gains. profits and income, and capital
gains, escepl capital gains subject to tax under subparagraph 5 (c)

10


[Provided, That effective January 1, 2009. the rate of income tax shall be
thirty percent (30%). | PROVIDED, THAT THE RATE OF CORPORATE

INCOME TAX SHALI, BE TWENTY EIGHT PERCENT (28%)
B NNING JANUARY 1, 2021; TWENTY SIX PERCENT (6%)
BEGINNING JANUARY 1, 2023; TWENTY FOUR PERCENT (24%)
BEGINNING JANUARY 1, 2025, TWENTY TWO PERCENT (22%)
BEGINNING JANUARY 1, 2027; AND TWENTY PERCENT (20%)
BEGINNING JANUARY 1, 2029. PROVIDED FURTHER THAT THE
PRESIDENT MAY ADVANCE THE SCHEDULED REDUCTION

THE CORPORATE INCOME TAX RATE WIL ADEQUATE
SAVINGS ARE REALIZED FROM TUE RATIONALIZATION OF
FISCAL INCENTIV AS CERTIFIED BY THE SECRETARY OF

1 Q) Nonresident Cinematographic Film Owner, Lessor or Distributor.
= A cinematographic film owner. lessor, or distributor shall pay a tax of
wenty-five percent (25%) of its gross income from all sources within the
Philippines. |

| (3) Nonresident Owner or Lessor of Vessels Chartered by Phtlippise
Nationals, A nonresident owner or lessor of vessels shalll be subject ta a tax
of four and one-half percent (4 1/2) of gross rentals, lease or charter fees
from leases or charters to Kilipino citizens or corporations, as approved by the
Maritime Industry Authority. ]

[ G4) Nonresident Owner or Lessor of Aircraft, Machinertes and Other
tipment. - Rentals, charters and other fees derived by a nonresident lessor
of aircraft, machineries and other equipment shall be subject to a tax of seven
and one-half percent (7 1:2) of gross rentals or fees. |

[ (5) | fax on Certuin Incomes Received by a Nonrestdem Foreign
Corporation,

(a) Interest on Foreign Loans, ~ xxx

(b) Intercorporate Dividends. A final withholding tas at the
tate of fiftcen percent (15%) is hereby imposed on the amount of cash
andlor property dividends received from a domestic corporation, which
shall be collected and paid as provided in Section 37 (A) of this Code.
subject fo the condition that the country in which the nonresident
foreign corporation is domiciled, shall allow a credit against the tax
due from the nonresident foreign corporation taxes deemed to have
been paid in the Philippines equivalent to [twenty percent (20%)
]FIFTE PERCENT (15%) which represents the difference
between the regular income lax | of thirty-five percent (35%) | and the
fificen porcent (15%) tax on dividends as provided in this
subparagraph: Provided, that EFFECTIVE JANUARY 1, 2020, [
effective January 1, 2009 |, the credit against the tax due shall be
cquivalent to | fifteen percent (15%), which represents | the difference

"


benveen the regular income tax RATE [of thirty pereent (30%) } and
ihe fiicen percent (15%) tax on dividends.

(c) Capital Gains from Sale of Shares of Stock not Traded in
the Stock Exchange. — A final tax at the rates prescribed below JOF
FIFTEEN PERCENT (15%) is hereby imposed upon the net capital
gains realized during the taxable year from the sale, barter, exchange
or other disposition of shares of stock in a domestic corporation, except
shares sold, or disposed of through the stock exchange.[ :

Not over P100,000
On any amount in excess of P100,000

SFC. 9, Section 34 of the National Internal Revenue Code of 1997, as amended, is
hereby further amended to read as follows:

SEC. 34. Deductions from Gross Income. - Except for taxpayers
caning, compensation income arising from personal services rendered under
an employer-employee relationship where no deductions shall be allowed
under this Section, in computing taxable income subject to income tax under
Sections 24 (A): 25 (A): 27 (A), (B) and (Cy, and 28 (A) (1), there shall be:
allowed the following, deductions from gross income:

(A) Expenses. -

(1) Ordinary and Necessary Trade, Business ov Professional
Expenses.

NAN

[ (2) Expenses sllowable to Private Educational Institutions. ~
In addition to the expenses allowable as deductions under this Chapter,
2 private educational institution, referred to under Section 27 (B) of
this Code, may at its option elect either: (a) to deduct expenditures
otherwise considered as capital oullays of depreciable assets incurred
during the taxable vear for the expansion of school facilitivs or (bb) to
deduct allowance for depreciation thercof under Subsection (F) hereof.

|

(B) Interest.

(1) Jn General. - The amount of interest paid or incurred within
a taxable year on indebicdness in connection with the taxpayer's
profession, trade or business shall be allowed as deduction from gross
income: Provided, however. That the taxpayer's otherwise allowable
deduction for interest expense shall be reduced by [ lorty-two percent
(42%) JTHIRTY THREE PERCENT(33%) of the interest income
subjected to final tax [ : Provided, ‘That effective January |. 009.
percentage shall be thirty-three percent (33%). | PROVIDED
FURTHER, THAT THE FOLLOWING PERCENTAGES SHALL

12


APPLY IF THE CORPORATE INCOME TAX RATE AS
PROVIDED IN SECTIONS 27 (4) AND 28(A)(1) IS ADJUSTED
AS FOLLOWS:

IF RATE LS 28%, INTEREST EXPENSE REDUCTION RATE TS

29%
IF RATE IS 26%, INTEREST EXPENSE REDUCTION RATE IS 26%
IF RATE IS 24%, INTEREST EXPENSE REDUCTION RATE IS 24%

TF RATE
UF RAT.

REDUCTION RATE IS 22%
20%, INFEREST EXPENSE REDUCTION RATE IS 20%

(2) sxx
(C) Taxes. ~ xxx
(@) Losses. - 208
(F) Bad Debts. ~ xxx
(F) Depreciation, = xxx

(G) Depletion of Oil and Gus Wells and Mines. - xex

(I) Charitable and Other Contributions. - 3x

() Research and Meveinpment.- x32
(J) Pension Trusts, = 22
(K) Additional Requsrements for Deductibiliey of Certain Pavments, = xxx

(1) Opnonal Standard Deducton (OSD). - In liew of the deductions
allowed under the preceding Subsections, am individual subject to tax
under Section 24, other than a nonresident alien, [ may elect a standard
deduction in an amount not exceeding forty percent (40%) of his gross
sales or gross receipts, as the case maybe. In the case of a | AND A
corporation subject to tax under Sections 27(A) and 28 (AD. [it }
may elect a standard deduction in an amount not exceeding ‘TWENTY
PERCENT (20%) | forty percent (40%) ] of its gross income as
defined in Section 32 of this Code. Unless the taxpayer signifies in his
return his intention to elect the optional standard deduction, he shall be
considered as having availed himself of the deductions allowed in the
preceding Subsections, Such election when made in the return shall be
irrevocable for the taxable year for which the return is made: Prowiled,
That an individual who is entitled to and claimed for the optional
standard deduction shall not be required to submit with his tay return
such financial statements otherwise required under this Code:
Provided, further, ‘Yhat except when the Commissioner otherwise

13


permits. the said individual shall keep such records pertaining to his
gross sales or gross receipts, or the said corporation shall keep such
records pertaining to his gross income as defined in Section 32 of this,
Code during the taxable as may be required by the rules and
regulations promulgated by the Secretary of Finance, upon.
recommendation of the Commissioner.

Notwithstanding the provision of the preceding Subsections. the
Secretary of Finance, upon recommendation of the Commissioner, after a
public hearing shall have heen held for this purpose. may prescribe by rules
and regulations, limitations or ceilings for any of the itemized deductions
under Subsections (A) to (1) of this Section: Provided, That for purposes of
determining such ceilings or limitations, the Secretary of Finance shall
consider the following, Lietors: (1) adequacy of the prescribed limits on the
actual expenditure requirements of each particular industry; and (2)effects of
inflation on expenditure levels: Provided, further. That no ceilings shall further
be imposed on items of expense already subject to ceilings under present law.”

SEC. 10, Section 40(C)(2) of the National Internal Revenue Code of 1997, as
amended. is hereby further amended to read as follows:

“SEC. 40, Determination of Amount and Recognition of Ge

r Lass. ~

(AX sy

(B)x xs

(C) Lxohange of Property. -
Cy xxx

(2) Bnvepiion. - No gain or loss shall be recognized TO A
CORPORATION OR ON [TS STOCK OR SECURITIES IF
SUCH CORPORATION IS A PARTY = TO A
REORGANIZATION AND EXCHANGES PROPERTY, [if ] in
pursuance of plan of | —— merger or consolidation
JREORGANIZATION SOLELY FOR STOCK OR SECURITIE:
IN ANOTITER CORPORATION A PARTY TO THE
REORGANIZATION. A REORGANIZATION IS DEFINED AS:

(a) A. corporation, which is a party to a A
STATUTORY merger or consolidation, exchanges
property solely for stock in a corporation, which is a
party to the merger or consolidation: or

(b) [A shareholder exchanges stock in a
corporation, which is a party to the merger or
consolidation, solely for the slock of another
corporation also a party to the merger or consolidation:
or |THE ACQUISITION BY ONE

14


CORPORATION, IN EXCHANGE SOLELY FOR
ALL OR A PART OF ITS VOTING STOCK (OR
IN EXCHANGE SOLELY FOR ALL OR A PART
OF THE VOTENG STOCK OF A CORPORATION
WHICH IS IN CONTROL OF THE ACQUTRING
CORPORATION), OF STOCK OF ANOTHER
CORPORATION {t, IMMEDIATELY AFTER
THE ACQUISITION, THE ACQUIRING
CORPORATION HAS CONTROL OF SUCH
OTHER CORPORATION WIETITER OR NOT
SUCIL ACQUIRING CORPORATION HAD
CONTROL IMMEDIATELY BEFORE THE
ACQUISITION);

(c) [ A security holder of a corporation, which
is a parly to the merger or consolidation, exchanges his
securities in such corporation, solely for stock or
securities in such corporation, a party lo the merger or
consolidation, | THE ACQUISITION BY ONE
CORPORATION, IN EXCHANGE SOLELY FOR
ALL OR A PART OF ITS VOTING STOCK (OR
IN EXCHANGE SOLELY FOR ALL OR A PART
OF THE VOTING STOCK OF A CORPORATION
WHICH IS IN CONTROL OF THE ACQUIRIN
CORPORATION), OR SUBSTANTIALLY ALL OF
THE = PROPERTIES OF — ANOTHER
CORPORATION, BUT IN DETERMINING
WHETHER THE EXCHANGE IS SOLELY FOR
STOCK TUE ASSUMPTION BY = THE
ACQUIRING CORPORATION OF A LLABILIEY
OF THE OTHER SHALL BE DISREGARDED;

(WD) A RE

LVALIZATION, OR

(E) A REINCORPORATION

No gain or loss shall also be recognized if property is transferred 0 @
corporation by Ja] ONE OF MORE person$ in exchange for stock {or unit
tion in such a corporation of which as a result of such exchange
said person, alone or together with others, not exceeding four (4) persons,
gains control of said corporation | : Provided, that stocks issued for services
shall not be considered as issued in return For properly.

IN ALL OF THE ABOVE INSTANCES, THE TRANSACTION
OR ARRANGEMENT MUST BE UNDERTAKEN FOR A
LEGITIMATE OR BONA FIDE BUSINESS PURPOSE AND NOT
SOLELY FOR THE PURPOSE OF AVOIDING OR ESCAPING THE
BURDEN OF TAXATION.



TILE PROVISION OF SECTION 50 OF THIS CODE SHALL BE
APPLIED AND ENFORCED, INC. WHERE THE
TRANSACTION OR ARRANGEMENT ENTERED INTO JS FOUND
TO BE NOT FOR LEGITIMATE OR BONA FIDE BUSINESS

PROVIDED, HOWEVER, SALE OR EXCHANGI OF
PROPERTY USED FOR BUSIN FOR SHARES OF STOCK
COVERED UNDER THIS SUBSECTION SHALL NOT BE SUBJECT
TO VALUE ADDED TAX (VAT).

x xn”

SEC. 11. Scction $0 of the National Internal Revenue Code of 1997, as amended, is
hereby further amended to read as follows

IC. $0, [aHecation of Income und Decvotions. In the case of two or
more organizations, trades or businesses (whether or not incorporated and
whether or not organized in the Philippines) owned or controlled directly or
indirectly by the same interests, the Commissioner is authorized to distribute,
apportion or allyeate gross income or deductions between or among such
organization, trade or business, if he determined that such distribution,
apportionment or allocation is necessary in order to prevent evasion of laxes or
clearly to reflect the income of any such organization, trade or business. |
AUTHORITY QF THE COMMISSIONER TO DISTRIBUTE.
{PPORTION, ALLOCATE, AND IMPUTE INCOME AND DEDUCTION,
TO DISREGARD AND COUNTERACT TAN AVOIDANCE
ARRANGEMENTS. - IN CASE OF TWO OR MORE
ORGANIZATIONS, TRADES OR BL , WHETHER OR NOT
ORGANIZED IN THE PHILIPPIN! OWN D OR CONTROLLED
DIRECTLY OR INDIRECTLY BY THE SAME INTERESTS, THE
COMMISSIONER IS AU'THORIZED TO DISTRIBUTE, APPORTION,
ALLOCATE, OR IMPUTE INCOME OR DEDUCTIONS BETWEEN
OR AMONG SUCH ORGANIZATION, TRADE OR BUSINESS, LF
THE COMMISSIONER DETERMINES THAT SUCH DISTRIBUTION,
APPORTIONMENT, ALLOCATION, OR IMPUTATION 1S
NECESSARY IN ORDER ‘TO PREVENT AVOIDANCE OF TAXES OR
TO CLEARLY TO REFLECT THE INCOME OF ANY SUCH
ORGANIZATION, TRADE, OR BUSINE

IN CASES WIEN A TRANSACTION OR ARRANG! INT,
WHETHER ENTERED INTO BY THE PERSON AFFECTED BY TITE
TRANSACTION OR ARRANGEMENT OR BY ANOTHER PERSON,
THAT DIRECTLY OR INDIRECTLY HAS TAN AVOIDANCE AS ITS
PURPOSF:! “TS, WHETHER OR NOT ANY OTHER
PURPOSE OR EFFECT IS AYTRIBUTABLE AS TO ORDINARY
BUSINESS OR FAMILY DEATLIN TF THE AVOIDANCE
PURPOSE, ECT 18 NOT MERELY INCIDENTAL, THE.
COMME: IS AUTHORIZED TO DISREGARD AND
CONSIDER ST TRANSACTION OR ARRANGEMENT AS VOLD

16


FOR INCOME TAX PURPOSES, AND MAY ADJUST THE TAXABLE
INCOME OF A PERSON AFFECTED BY THE ARRANGEMENT IN 4
WAY THE COMMISSIONER THINKS APPROPRIATE, IN ORDER
TO COUNTERACT A TAX ADVANTAGE OBTAINED BY THE.
PERSON FROM OR UNDER THE ARRANGEMENT.

FOR PURPOSES OF THIS SECTION, THE TERM “TAX
AVOIDANCE” INCLUDES: (A) DIRECTLY OR INDIRECTLY
ALTERING TIFE INCIDENCE OF ANY INCOME TAX; (B)
DIRECTLY OR INDIRECTLY RELIEVING A PERSON FROM
LIABILITY TO PAY INCOME TAX OR FROM A POTENTIAL OR,
PROSPECTIVE LIABILITY TO FUTURE INCOME TAX; OR (C)
DIRECTLY OR INDIRECTLY AVOIDING, POSTPONING, OR
REDUCING ANY LIABILITY TO INCOME TAX, OR ANY
POTENTIAL OR PROSPECTIVE LIABILITY TO F INCOME,
TAX. THERE TS ‘TAX AVOLDANCE® IN THE AFOREMENTIONED
INSTANCES, WHERE THE TRANSACTION OR ARRANGEMENT IS.
MOTIVATED BY OBTAINING TAX BENEFIT OR ADVANTAGE
WITH NO COMMERCIAL REALITY OR ECONOMIC EFFECT AND
TH SE OF THE PROVISIONS OF THE TAXATION LAW ON
H TRANSACTION OR ARRANGEMENT WOULD NOT HAVE
THE INTENTION OF TILE LAW.”

hereby

“SEC, 73. Distribution of Dividends or Assets by Corporations. -

(A) Definition of Dividends. ~ The term ‘dividends’ when used in this
{itle means any distribution made by st corporation to its sharcholders out of
its earnings or profits and payable to its sharcholders. whether in money or in
other property.

[ Where a corporation distributes all of its assets in complete
liquidation or dissolution, the gain realized or loss sustained by the
stockholder. whether individual or corporate, is a taxable income or a
deductible loss, as the case may be. ]

(B) Stock Dividend. - \ stock dividend representing the transfer of
surplus to capital account shall not be subject to tax. However, ila corporation
cancels or redeems stock issued as a dividend at such time and in such manner
as to make the distribution and cancellation or redemption, in whole or in part,
essentially equivalent to the distribution of a taxable dividend, the amount so
distributed in redemption or cancellation of the stock shall be considered as
taxable income to the extent that it represents a distribution of camings or
profits.

(C) LIQUIDATING DIVIDENDS. - LIQUIDATING DIVIDENDS,
REPRESENTING THE REMAINING GAINS REALIZED OR LOSS


SUSTAINED BY THE STOCKHOLDER IN A  COMPL
LIQUIDATION OR DISSOLUTION BY A CORPORATION.

ETE

EC) | @) Dividends Divributed are Deemed Made from Most
Recently Accumulated Profits. - Any distribution made to the shareholders or
members of a corporation shall be deemed (o have been made from the most
recently accumulated profits or surplus, and shall constitute a part of the
annual income of the distribute for the year in which received.

1 (Dy KE) Net Income of a Partnership Deemed Constructively
Recetved by Parters. - The taxable income declared by a partnership for a
taxable year which is subject to tax under Section 27 (A) of this Cody. alter
deducting the corporate income tax imposed therein, shall be deemed to hi
been actually or constructively received by the partners in the same taxable
year and shall be taxed to them in their individual capacity. whether actually
distributed or not.”

112 (A) (B) of the National Internal Revenue Code of 1997. as
ther amended to read as follows:

ECTION 112. Refunds [ or Tax Credits. of Input Tax.

"(A) Zero-rated or Pffectively Zero-rated Sales. - Any VA\L-registered
person, whose sales are zero-rated or effectively zero-rated may. within two
(2) years after the close of the taxable quarter when the sales were made, apply
for | the issuance of a tax credit certificate or | refund of creditable input tax
due or paid attributable to such sales, except transitional input tax. 10 the
extent that such input tax has not been applied against output tax: Provided,
however. That in the case of zero-raled sales under Section 106(A)(2a)1)
(2) and [ (b) ] and Section 108 (B)(1) and (2). the acceptable foreign currency
exchange proceeds thereof had been duly accounted for in accordance with the
rules and regulations of the BangkoSentral ng Pilipinas (BSP): PROTTDED,
THAT SECTION 106(A)2\a)2) AND SECTION 108 (B)(1) SHALL NO
LONGER BE SUBJECT TO ZERO PERCENT VAT RATE UPON TI HE
SUCCESSFUL ESTABLISHMENT AND IMPLEMENT.
ENIIANCED VAT REFUND SYSTEM IN ACCORDANCE WH
y <VUND PROVISIONS UNDER SECTION — 16(A) AND
SECTION 108(B), RESPECTIVELY. Provided, further, ‘That where the
taxpayer is engaged in zero-rated or effectively zero-rated sale and also in
taxable or exempt sale of guods or propertivs or services. and the amount of
creditable input tax due or paid cannot be directly and entirely attributed to
any one of the transactions, it shall be allocated proportionately on the basis of
the volume of sales. Provided, finally, that for a person making sales that are
zero-rated under Section 108(13)(6), the input taxes shall be allocated ratably
between his zero-rated and non-zero-rated sales.

"(B) Cancellation of VAT Registration. - A person whose registration
has been cancelled due to retirement from or cessation of business, or due to
changes in or cessation of status under Section 106(C) of this Code may.
within two (2) years from the date of cancellation. apply for REFUND. | the

18


issuance of a tax credit certificate for any unused input tax. which may be used
in payment of his other intemal revenue taxes J

SEC. 14. SEC. 117 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997,
AS AMENDED, IS HEREBY AMENDED TO READ AS FOLLOWS:

117, PERCENTAGE TAX ON DOMESTIC CARRIERS AND
CARS FOR RENT OR HIRE DRIVEN BY ‘THE LE! :

PAS: ERS FOR HIRE, AND OTHER DOMESI'IC CARRIERS BY LAND FOR THE,
TRANSPORT OF PASSENGERS (EXCEPT OWNERS/OPERATORS OF TRICYCLES,
OPERATING NOT MORE THAN TWO (2) UNITS, OWNERS OF BANCAS) AND
OWNERS OF ANIMAL-DRAWN TWO-WHEELED VEHICLE), AND KEEPERS OF
GARAGES SHALL PAY A TAX EQUTV ALENT TO THREE PERCENT (3%) OF fHFIR
QUARTERLY GROSS RECEIP 1S.

x

SEC. 15. Sec. 119 of the National Internal Revenue Code of 1997. as amended, is
hereby amended lo read as follows:

“Section 149. Tax on Franchises. ~ Ane provision of general or spectal
faw te the contrary notwrthstanding, there shall he levied. assessed and
collected in respect t all EXISTING franchise agreement or law pertaining
TO franchises on radio and'or television broadeasting AND
TELECOMMUNICATION companies [whose annual gross receipts of the
preceding year do not exceed Ter million pesos (PI0,000,000.00) | , subject
to Section 236 of this Code, a FRANCHISE tux of three percent (3%) and on
gas and water utilities, a FRANCHISE tax of peo percent (2%) on the gross
receipis derived from the busmness covered hy the law granting the franchise:
Provided, however, That radio and/OR television broadcasting AND
TELECOMMENICATION companies referred lo in this Section shall | have
un option to] be registered as a value-edded taspaver and pay the tax due
thereon.| > Provided, further, That once the optton ix exercised, said option
shall not be irrevocable |

SEC. 16. Sec. 204 of the National Internal Revenue Code of 1997, as amended, is
hereby amended tw read as follows.

“SEC. 204. Authority of the Commissioner ta Compromise, Abate and
Refund or Credit Taxes. — The Commissioner may

(l) Compromise the payment of anv internal revenme tax, when

(1) A reasonable doubt as to the validity of the claim against the
taxpayer exists; or

(2) The financial position of the taxpayer demonstrates a clear inability
to pay the assessed tax

19


The compromise settlement of any tax liability shall be subject to the
following minimum amounts:

For cases of financial incapacity, a minimum compromise rate equivalent to
ten percent (10%) of the basic assessed tax; and

For other cases. a minimum compromise rate equivalent to forty percent
(40° ojof the basic assessed tax.

Where the basic tax involved exceeds | One| TEN million pesos [
(P1,000.000) ] (P10,000,000) or where the settlement offered is less than the
prescribed minimum rates, the compromise shall be subject to the approval of
the Evaluation Board which shall be composed of the Commissioner and the
four (4) Deputy Commissioners.

XN

SEC. 17, Sec, 222 of the National Internal Revenue Code of 1997, as amended, is
hereby amended to read as follows:

“SEC. 222. Exceptions as to Period of Limitation of Ass.
Collection of Taxes.

sument and

(a) XXX

(b) If before the expi ibed in Section 203 for
the assessment of the t joner and | the taxpayer
[ have agreed | APPLIES WITH THE COMMISSIONER in writing
to its assessment afler such time, the tax may be assessed within the
period | agreed upon | SPECIFIED IN THE APPLICATION
WITICIT SITALI, NOT EXNCEED SIN (6) MONTHS AT ANY
ONE TIME, ‘The FOREGOING period | so agreed upon | may be
extended by subsequent written | agreement ]APPLICATION made
before the expiration of the period previously | agreed upon
|APPLIED FOR.

NN”

SEC. 18. Sec. 237 of the National Internal Revenue Code of 1997, as amended, is
hereby amended to read as follows

“SHC, 237, Issuance of Receipts or Sates or Commercial Invoices. ~
(A) lssuance. - xxx

“Within five (5) years from the effectivity of this Act and upon the
establishment of a system capable of storing and processing the required date.
the Bureau shall roguire taxpayers engaged in the expat! of goods and service.
taxpayers engaged in e-commerce, and taxpayers under the jurisdiction of the

20


Large Taxpayers Service to issue AND TRANSMIT electronic receipts or
sales or commercial invoices [in lieu of manual receipts or sales ot
commercial invoices JTMRU DESIGNATED — ELECTRONIC
CHANNELS WITH A) PUBLIC CERTIFICATION | SYSTEM.
ACCREDITED BY THE BUREAU, subject to the rules and regulations to.
be issued by the Secretary of Finance upon recommendation of the
Commissioner | and after a | following a public hearing | shall have been ]
held for this purpose: Provided, That taxpayers not covered by the mandate of
this provision may issue electronic reccipts of sales or commercial invoices in
lieu of manual receipts or sales or commercial invoices. PROVIDED
FURTHER, SUBJECT VO THE RULES AND REGULATIONS TO BE
ISSUED BY THI REVARY OF FINANCE, THE COMMISSION.
MAY REQUIRE ANY TAXPAYER TO COMPLY WITH THE
PROVISIONS OF THIS SECTION.

A PUBLIC CERTIFICATION SYSTEM SHALL REFER TO A
DIGITAL PERSONAL AUTHENTICATION PROGRAM WITH
ABILITY TO VERIFY THE IDENTITY OF ISSUING TAXPAYER
AND ATTEST TO THE AUTHENTICITY OF THE INFORMATION IN
THE ELECTRONIC RECEIPTS OR SALES OR COMMERC
INVOICES. TE THE USE OF DIGITAL
SIGNATURE —ISSL ION AUTHORITY AS
ACCREDITED BY THE BUREAL OF INTERNAL REVENLE.

A DESIGNATED ELECTRONIC CHANNEL SHALL REFER TO ANY
MEDIUM OR PORTAL. IDENTIFIED BY THE BUREAU WITH AN
ABILITY TO RECEIVE THE TRANSACTION DATA OF THE
ELECTRONIC RECEIPTS OF SALES OR COMMERCIAL INVOICES
FOR ASSIGNMENT OF AN APPROVED ELECTRONIC TAX
TRANSACTION NUMBER.

AN APPROVED TAX TRANSACTION NUMBER SHALE REFER TO
THE UNIQUE IGNED SERVIES OF NUMBERS AND/OR
LETTERS LINKED TO A VALIDATED SALES ‘TRANSACTION
REPORTED THROUGH THE DESIGNATED ELECTRONIC
CHANNEL,

The original of cach receipt or invoice shall be issued to the purchaser.
customer, or client at the time the transaction is effected, who, if engaged in
the business or in the exercise of profession, shall keep and preserve the same
in his place of business for a period of three (3) years from the close of the
taxable year in which such invoice or receipt was issued, while the duplicate
shall be kept and preserved by the issue. also in his place of business. for a like
period: Provided. that in case of electronic receipts or sales or commercial
invoives, digital record of the same [ shall be kept by the purchaser. customer
or client and the issuer for the same period abuve stated] BEARING THE
APPROVED ELECTRONIC TAX TRANSACTION NUMBER SHALL.
BE SUFFICIENT COMPLIANCE



The Commissioner may, in meritorious cases, exempt any person subject to
internal revenue tax from compliance with the provision of this Section,

SEC. 19. Soc. 237-A of the National Internal Revenue Code of 1997, as amended, is
hereby amended to read as follows

“SEC. 237-A. Electronic Sales Reparting System. — Within five (5) years
from the effectivity of this Act and upon the establishment of a system capable
of storing and processing the required data, the Bureau shall require taxpayers
engaged in the export of gonds and services, taxpayers engaged in e-
commerce. and taxpayers under the jurisdiction of the Large Taxpayers
Service to USE A § EM CAPABLE OF ISSUING ELECTRONIC
RECEIPTS OR SALES OR COMMERCIAL INVOICES, COLLECT
‘TRANSACTION RECORDS, AND ‘TRANSMI' ' oT
THE DESIGNATED FI. ‘TRONTC CHANNELS OF THE BUREAU IN
THE STANDARD FORMAT REQUIRED{ clecironically report their
sales data to the Bureau of through the use of electronic point of sales systems,
] subject to the rules and regulations to be issued by the Secretary of Finance
upon recommendation of the Commissioner of Intemal Revenue: Proviced,
That the POINT OF SALE (POS) machines, VALUE ADDED NETWORK
(VAN) TERMINALS, fiscal devices, and fiscal memory devices WITH
CAPACITY TO MAKE SUCH TRANSMISSION shail be at the expense
of the taxpayers. PROVIDED FURTHER, SUBJECT ‘1O THE RULES
AND REGULATIONS TO BE ISSUED BY THE SECRETARY OF
FINANCE, THE COMMISSIONER MAY REQUIRE ANY TAXPAYER
TO COMPLY WITH THE PROVISIONS OF THIS SECTION.

IN YEAR ONE TO YEAR FOUR OF THE IMPLEMENTATION
PERIOD, A TAXPAYER WHO ADOPTS THE REQUIRED SYSTEM
SHALL BE GRANTED A TAX CREDIT OF 0.1% OF THE PURCHAS|
VALUE, NET OF VALUE ADDED TAX, FOR EVERY ELECTRONIC
RECEIPT OR SALE OR COMMERCIAL INVOICE TRANSMITTED
THRU THE DESIG: ED ELECTRONIC CHANNELS OF THE
BUREAU AND ISSUED AN ELECTRONIC TAX TRANSACTION
NUMBER.

! TRACEABLE PAYMED
<ETP) IN THE FORM OF ALLOWABLE DEDUCTIBLE EXPENSE OF
LP TO 10% OF THE ETP MADE BY THE TAXPAYER. AN ANNUAL

LIMIT ON THE ALLOWED ETP DEDUCTIBI
TAXPAYER MAYBE SET BY TITE COMMISSK
APPROVAL OF TELE SECRETARY OF FINANCE.

EXPENSE PER
ER WITH THE

ELECTRONICALLY TRACEABLE PAYMENTS REFER TO CREDIT
CARD, DEBI CARD, OR OTHER METHOD OF PAYMENT WITH A
SYSTEM TO VERIFY OR LINK THE PAYMENT TO THE IDENTITY
OF PAYOR.



THE BUREAU MAY LIKEWISE ESTABLISH A RECEIPT AND
INVOICE LOTTERY PROGRAM FOR ELE¢ IPTS OR
SALES OR COMMERCIAL INVOICES TRANSMITTED THRU THE
DESIGNATED ELECTRONIC CHANNELS OF THE BUREAU AND.
ISSUED AN ELECTRONIC TAX TRANSACTION NUMBER.

The data processing of sales and purchase data shall comply with the
provisions of Republic Act No. 10173, otherwise known as the "Data Privacy
Act" and Section 270 of the NIRC, as amended, on unlawful divulgence of
taxpayer information and such other laws relating to the confidentiality of
information.

‘The Bureau shall also establish policies, risk management approaches, actions.
training, and technologies ta protect the cyber environment, organization, and
data in compliance with Republic Act No. 10175 or the "Cybercrime
Prevention Act of 2012."

SEC. 2 254 of the National Internal Reve
hereby amended to read as follows:

Code of 1997, as amended, is

“SEC. 254. Attempt to Evade or Defeat Tax. - Any person who willlully
attempts in any manner to evade or defeat any tax imposed under this Code or
the payment thereof shall, in addition to other penalties provided by law, upon
conviction thereof, be punished by a fine of not less than THREE
HUNDRED THOUSAND (P300,000) | Thirty thousand pesos (30,000) |
but not more than ONE MILLION PESOS (P1,000,000) [One hundred
thousand pesos (100.000) J and sulfer imprisonment of not Kes than {two
(2) years but not more than four (4) 9 JSIX () YEARS BUT NOT
MORE THAN TWELVE (12) YEARS: Provided, That the conviction or
acquittal obtained under this Section shall not be a bar to the filing of a civil
suit for the collection of tax

a

SEC, 21. Sec, 255 of the National Intemal Revenue Code of 1997, as amended, is
hereby amended to read as follows:

“SEC. 258. Failure to File Return, Supply Correct and Accurate
Information, Pay Tax Witkhold and Remit Tax and Refund Excess Taxes
Withheld on Compensation. - Any person required under this Code or by
tules and regulations promulgated thereunder to pay any tax make a rerum,
keep any record, or supply correct the accurate information, who willfully fails
fo pay such tax. make such retum, keep such record. or supply correct and
accurate information, or withhold or remit taxes withheld, or refund excess
faxes withheld on compensation. at the time or times required by law or rules
and regulations shall, in addition to other penalties provided by law. upon
conviction thereof, be punished by a fine of not less than | Ten thousand
pesos (P10,000) [ONE HUNDRED THOUSAND (P100,000) and suffer
imprisonment of not less than one (1) year but not more than ten (10) years.

Any petson who attempts to make it appear for any reason that he or another
is in fact filed a return or st nent



subsequently withdraws the same return or statement sfler securing the official

fre
was
not

ving seal or stamp of receipt of internal revenue office wherein the same
actually filed shall. upon conviction therefore, be punished by a fine of
less than | Yen thousand pesos (P10,000) but not more than Twenty

thousand pesos (P20,000) JONE HUNDRED THOUSAND PESOS

(PW0,000) BUT NOT MORE THAN TWO HUNDRED THOU

SAND

{P200,000) and suffer imprisonment of not less than one (1) year but not more
than three (3) years.”

SEC. 22. See. 256 of the National Internal Revenue Code of 1997, as amended. is
hereby amen

“SEC.

d to read as follows:

. Penal Liability of Corporations. - Any corporation,

general co-partnership liable for any of the acts or omissions penalized under
this Code, in addition to the penaltics imposed herein upon the responsible
corporate officers, partners. or employees shall, upon conviction for cach act

or oni

ion, be punished by a fine of not less than | Fifty thousand pesos

¢P50,000) but not more than One hundred thousand pesos (P100,000) JONE
HUNDRED ‘THOUSAND PESOS (P100,000) BUT NOT MORE THAN:
THREE HUNDRED THOUSAND PESOS (P300,000).”

SEC. 23, See

hereby am

“SE

ded Lo read as follows:

'. 257. Penal Liability for Making False Entries, Records or Reports, or

Using Falsified or Fake Accountahle Forms. ~

(A)

Any financial officer or independent Certified Public Accountant engaged

fo examine and audit books of accounts of taxpayers under Section 232 (A)
and any person under his direction who

(1) Willfully falsifies any report or statement bearing on any
examination or audit, or renders a report, including exhibits,
statements. schedules or other forms of accountancy work which has
not been verified by him personally or under his supervision or by a
member of his firm or by a member of his staff in accordance with
sound auditing practives: or

(2) Centifies financial statements of a business enterprise containing an
essential misstatement of facts or omission in respect of the
transactions, taxable income, deduction and exemption of his client: or

(B) Any person who:

(1) Not being an independent Certitiod Public Accountant accore
fion 232(B) or a financial officer, examines and audits books of
ounts of taxpayers: or

(2) Offers to sign and certify financial statements without audit; or

24

257 of the National Internal Revenue Code of 1997, as amended, is


(3) Offers any taxpayer the use of accounting bookkeeping records for
internal revenue purposes not in conformity with the requirements
prescribed in this Code or rules and regulations promulgated
thereunder; or

(4) Knowingly makes any false ontry or enters any Lise ot fictitious
name in the books of accounts or record mentioned in the preceding

paragraphs: of

(5) Keeps two (2) or more sets of such records or books of account

(6) In any way commits an act or omission, in violation of the
provisions of this Section; or

(7) Fails to keep the books of accounts or records mentioned in Section
232 in a native language, English or Spanish, or t@ make a true and
complete translation as required in Section 234 of this Code, or whose
books of accounts or records Kept in a native language. English or
Spanish. and found to be at material variance with books or records
kept by him in another language: or

(8) Willfully attempts in any manner to evade or defeat any: tax
imposed under this Code, or knowingly uses fake or falsified revenue
official reevipts, Loters of Authority. certificates authorizing
registration, Lax Credit Certificates, Tax Debit Memoranda and other
accountable forms shall, upon conviction for each act or omission, be
punished by a fine not less than [ Filly thousand pesos (P50.000) but
not more than One hundred thousand pesos (P100,000) {ONE
ITUNDRED THOUSAND PESOS (P100,000) BUT NOT MORE
THAN THREE HUNDRED THOUSAND PESOS (P300,000) and
suffer imprisonment of not less than | two (2) years but not more than
six (6) years ] SIX (6) years but not more than TWELVE (12)

years.

If the ollender is a Certified Public Accountant, his certificate as a Certified
Public Accountant shall be automatically revoked or cancelled upon
conviction

In the case of foreigners. conviction under this Code shall result in his
immediate deportation aller serving sentence. without further proceedings Lor
deportation.”

SEC. 24. 258 of the National Intemal Rev
hereby amended to read as follows:

enue Code of 1997. as amended, is

“SEC. 258. Unlawful Pursuit of Business. - Any person who carries on any
business for which an annual registration fee is imposed without paying the
tax as required by law shall, upon conviction for cach act or omission. be
punished by a fine of not less than [_ Five thousand pesos (P5.000) but not
more than Twenty thousand pesos (P20,000) [FIFTY THOUSAND PESOS

25


(P50,000) BUT NOL MORE THAN TWO HUNDRED THOUSAND
PESOS (P200,000) and suffer imprisonment of not lessthan six (6) monthsbut
not more than two (2) years: Provided, That in the case of a person engaged in
the business of distilling, rectifying, repacking, compounding or
manufacturing any article subject to excise tax, he shall, upon conviction for
each act or omission, be punished by a fine of not less than | ‘Thirty thousand
pesos (P30,000) but not more than Fifty thousand pesos (P50,000) JTHREE,
HUNDRED THOUSAND PESOS (P300,000) BUT NOT MORE THAN
FIVE HUNDRED THOUSAND PESOS (P500,000) and suffer
imprisonment of not less than two (2) years but not more than four (4) years.”

SEC. 25. Sec. 260 of the National Internal Revenue Code of 1997. as amended, is
hereby amended to read as follows:

SEC. 260. Unlawful Possession of Cigarette Paper in Bobbins or Rolls, Ete.
= It shall be unlawful for any person to have in his possession cigarette paper
in bobbins or rolls, cigarette tipping paper or cigarette filter tips. without the
corresponding authority therefor issucd by the Commissioner, Any person,
importer, manufacturer of cigar and cigarettes, who has been found guilty
under this Section, shall, upon conviction for each act or omission, be
punished by a fine of not less than than[ Twenty thousand pesos (P20,000)
but not more than One hundred thousand pesos (P100.000) [ONE
HUNDRED THOUSAND PESOS (P 100,000) BUT NOT MORE THAN
FIVE HUNDRED THOUSAND PESOS (P500,000) and — suffer
imprisonment for a term of not less than six (6) years and one (1) day but not
more than twelve (12) years.”

SEC. 26. Sec. 261 of the
mended to read as [ullows:

National Internal Revenue Code of 1997, as amended, is

hereby

“SEC. 261. Unlanfiul Use of Denatured Meokot. - Any person who tor the
purpose of manufacturing any beverage. uses denatured alcohol or alcohol
specially denatured to be used for motive power or withdrawn under bond for
industrial uses or alcohol knowingly misrepresented to be denatured to be
unfit for oral intake or who knowingly sells or offers for sale any beverage
made in whole or in part from such alcohol or who uses such alcohol for the
manufacture of liquid medicinal preparations taken internally, or knowingly
sells or offers for sale such preparations containing as an ingredient such
alcohol, shall upon conviction for cach act or omission be punished by a fine
of not less than than|'lwenty thousand pesos (P20,000) but not more than One
Imindred thousand pesos (P100,000) JONE HUNDRED THOUSAND
PESOS (P100,000) BUT NOT MORE THAN FIVE HUNDRED
THOUSAND PESOS (P$00,000) and suffer imprisonment for a term of not
Jess than six (6) years and one (1) day but not more than twelve (12) years.

Any person who shall unlawfully recover or attempt to recover by distillation
or other process any denatured alcohol or who knowingly sells or ollers tor
sale, conceals or otherwise disposes of alcohol so recovered or redistilled shall
be subject to the same penalties imposed under this Section.

26


hereby

hereby

SEC.
amended to read as follows:

“SEC. 262. Shipment or Removat of Liquor or Tobacco Products under
False Name or Brand or as an Imitation of any Existing or Othernise
Known Product Name or Brand. - Any person who ships. transports or
removes spirituous, compounded or fermented liquors, wines or any
manufactured products of tobacco under any other than the proper name or
brand known to the trade as designating the Kind and quality of the contents of
the cash, boule or package containing, the same or as an imitation of any
existing or otherwise known product name or brand or causes such act to be
done, shall, upon conviction for each acl or omission, be punished by a fine of
not less than [ Twenty thousind pesos (P20,000) but not more than One
hundred thousand pesos (P100,000) JTWO IFUNDRED THOUSAND
PESOS (P200,000) BUT NOT MORE THAN FIVE HUNDRED
THOUSAND PESOS (P500,000) and suffer imprisonment of not less than
six (6) years and one (1) day but not more than twelve (12) years.”

SEC. 28. Sec. 263 of the National Intemal Revenue Code of 1997, as amended. is

amended to read as follows

“SEC. 263. Unlawfial Possession or Removat of Articles Subject to Excise
Tux without Payment of the Tax. Any person who owns and/or is found in
possession of imported articles subject to excise tax, the tas on which has not
been paid in accordance with law, or any person who owns andor is found in
possession of imported tax-exempt articles other than those to whom they are
legally issued shall be punished by

(a) A fine of not Jess than | One thousand pesos (P1,000) |TWENTY
FIVE THOUSAND PESOS (P25,000) [ nor ] BUT NOT more than [ Two
thousand pesos (P2,000) SEVENTY FIVE THOUSAND PESOS (P75,000)
and suffer imprisonment of not less than | sixty (60) days but not more than
one hundred (100) days] THIRTY (30) DAYS AND ONE (1) DAY BUT
NOT MORE ‘THAN SIX (6) MONTHS if the appraised value. to be
determined in the manner prescribed in the | ‘Tariff and Customs Code
CUSTOMS MODERNIZATION AND TARIFF ACT, including duties
and taxes, of the articles does not exceed | One thousand pesos (P1.000).
JTWO TIUNDRED FIFTY THOUSAND PESOS (P250,000).

(b) A fine of not tess than {Ten thousand pesos (P10,000) |
SEVENTY FIVE THOUSAND PESOS (P75,000) but not more than [
Twenty thousand pesos (220,000) [ONE HUNDRED FLFPY THOUSAND
PESOS (P150,000) and. suffer imprisonment of not fess than [two (2) years
but not more than four (4) years ]SIX (6) MONTHS AND ONE (1) DAY
BUT NOT MORE THAN ONE (1) YEAR if the appraised value, 10 be
determined in the manner prescribed in the [Tariff and Customs Code
}CUSTOMS MODERNIZATION AND TARIFF ACT. including duties
and taxes, of the articles exceeds [ Cne thousand pesos (P1,000) | TWO
IIUNDRED FIFTY THOUSAND PESOS (P250,000) but does not exceed |

7. See. 262 of the National Intemal Revenue Code of 1997, as amended. is


Fifty thousand pesos (750,000) JFIVE HUNDRED THC
(P500,000),

SAND PESOS

(c) A fine of not less than | Thirty thousand pesos (P30,000) ] ONE
HUNDRED FU'TY THOUSAND PESOS (P150,000) but not more than [
Sixty thousand pesos (P60,000) JTHREE HUNDRED THOUSAND
PESOS (P300,000) and suffer imprisonment of not less than [four (4)
years but not more than six (6) years ] ONE (1) YEAR AND ONE (1) DAY
BUT NOT MORE THAN THREE (3) YEARS, if the appraised value, to be
determined in the manner prescribed in the [ Tariff and Customs Code
JCUSTOMS MODERNIZATION AND TARIFF ACT, including duties
and taxes of the articles is more than [ Fifty thousand pesos (P30.000)
but does not exceed One hundred filly thousand pesos (P150,000) [FIVE
HUNDRED THOUSAND PESOS (PSU0,000) BUT DOES NOT EXCEED
ONE MILLION PESOS (P1,000,000); or

(d) A fine of not less than [Fifty thousand pesos (PS0.000) [TITREE
TIUNDRED THOUSAND PESOS (P306,000) but not more than {One
hundred thousand pesos (P100, 000) | ONE MILLION FIVE TTUNDRED
THOUSAND PESOS (P1,500, 000) and suffer imprisonment of not less than
ton (10) vears but not more than twelve (12) years THREE 3) YEARS AND
ONE (4) DAY BUT NOT MORE THAN SIX (6) years. if the appraised
valug, to be determined in the manner prescribed in the | Tariff and Customs
Code J]CUSTOMS MODERNIZATION AND TARIFF ACT, including
duties and taxes, of the articles exceeds | One hundred fifty thousand pesos
(P150,000). JONE MILLION PESOS (P1,000,000),

Any person who is found in possession of locally manufactured articles
subject to excise tax, the tax on which has not been paid in accordance with
aw. or any person who is found in possession of such articles which arc
exempt from excise tax other than those to whom the same is lawfully issued
shall by punished with a fine of not less than (10) times the amount of exeise
tax due on the articles found but not less than [Five hundred pesos (P00)
JTWENTY FIVE THOUSAND PESOS (P25,000) and suffer imprisonment
of not less than two (2) years but not more than four (4) yours

Any manufacturer. owner or person in charge of any’ article subject 0
excise tax who removes or allows or causes the unlawful removal of any such
articles from the place of production or bonded warchouse, upon which the
excise fax has not been paid al the time and in the manner required, and any
person who knowingly aids or abels in the removal of such articles as
aforesaid, or conceals the same after illegal removal shall, for the Lirst oflonse.
te punished with a fine of not less than fen (10) times the amount of excise tas
due on the articles but not less than | One thousand pesos (PL,
|TWENTY FIVE THOUSAND (P25,000) and suffer imprisonment
less than { one (1) year but not more than two (2) years | TWO (2) YEARS
BUT NOT MORE THAN FOUR (4) YEARS.

28


‘The mere unevplained possession of articles subject lo excise tax, the
fax on which has not been paid in accordance with law, shall be punishable
under this Section.”

SEC. 29. See. 264 of the National Internal Revenue Code of 1997, as amended,
hereby amended to read as follows:

“SEC. 264. Failure or refusal to Issue Receipts or Sales or Commercial
Invoices, Violations related to the Printing of suck Receipts or Invoices and
Other Violations. -

(a) Any person who, being required under Section 237 to issue
receipts or sales or commercial invoices, fails or refuses to
issue such receipts of invoices, issues receipts or invoices that
do not truly reflvet and’or contain all the information required
to be shown therein, or uses multiple or double receipts or
invoices, shall, upon conviction for each act or omission, be
punished by a fine of not less than [ One thousand pesos
(P1,000) but not more than Fifty thousand pesos (PS0,000)
IONE HUNDRED THOUSAND PESOS (P100,000) BUT
NOT MORE THAN FIVE HUNDRED THOUSAND
PESOS (P500,000) and suffer imprisonment of not Jess than [
two (2) years bul not more than four (4) years | FOUR (4)
YEARS BUT NOT MORE THAN EIGHT (8) YEARS.

(b) Any person who commits any of the acts enumerated
hereunder shail be penalized in the same manner and to the
same estent as provided for in this s

(1) Printing of receipts or sales or commercial invoices without
authority from the Bureau of Intemal Revenue: ot

(2) Printing of double or multiple sets of invoices or receipts; or

(3) Printing of unnumbered receipts or sales or commercial
invoices. not bearing the name, business style. Taxpayer
Kdentification Number, and business address of the person or
omlily.’

SEC. 30. See. 265 of the National Internal Revenue Code of 1997, as amended. is
hereby amended to read as follows:

“SEC. 265. Offenses Relating to Stamps. - Any person who commits any of
the acts enumerated hervunder shall, upon conviction thereof, be punished by
a fine of not less than | ‘I'wenty thousand pesos (P20.000) ] TWO HUNDRED
THOUSAND PESOS (P200,000) but not more than { Fifty thousand pesos
(280.000) | FIVE HUNDRED THOUSAND PESOS (P500,000) and suffer
imprisonment of not less than four (4) years but not more than eight (8) years:

2g


(a) Making, importing. selling, using or possessing without express authority
from the Commissioner. any die for printing or making stamps, labels, tags ot
playing cards:

(b) Erasing the cancellation marks of any stamp previously used, or altering
the writen figures or letters or cancellation marks on internal revenue stamps:

(c) Possessing false. counterfeit, restored or altered s
causing the commission of any such offense by another

mps, labels or tags or

(d) Selling or offering for sale any box or package containing articles subject
to excise tax with false, spurious or counterleit stamps or labels or selling from
any such fraudulent box, package or container as aforementioned: or

(e) Giving away or accepting from another, or selling. buying or using
containers on which the stamps are not completely destroyed.”

SEC. 31. Sec. 266 of the National Internal Revenue Code of 1997, as amended, is
hereby amended to read as follows:

“Sec. 266. Failure to Ohey Summons. - Any person who, being duly
summoned to appear to testify. or t appear UNDER SECTION 6-4 OF
THIS CODE | and produce books of accounts, records. memoranda or other
papers, ] or to furnish information as required under the pertinent provisions
of this Code, neglects to appear or to produce such books of accounts, records,
memoranda or other papers, or to furnish such information. shall, upon
conviction, be punished by a fine of not less than [Five thousand pesos
(P3.000) JFUFTY THOUSAND PESOS (P50,000) but not more than [ten
thousand pesos (P10.000)  JONE HUNDRED THOUSAND PESOS
(P100,000) and sufler imprisonment of not fess than [ one (1) year but not
more than two (2) years. | TWO @) YEARS BUT NOT MORE THAN
FOUR (4) YEARS.

SEC. 32. Sec. 275 of the National intemal Revenue Code of 1997, as amended, is
hereby amended to read as follows:

Violation of Other Provisions of this Code or Rules and
Regulations in General.- Any person who violates any provision of this Code
or any rule or regulation promulgated by the Department of Finance, for which
no specific penalty is provided by law. shall, upon conviction for each act or
omission, be punished by a line of not more than [ One thousand pesos
(P1,000) | TEN THOUSAND PESOS (P10,000) or suffer imprisonment of
not more than [ six (6) months ] TWO (2) YEARS, or both.”

3C. 33. SEC. 288 OF THE, NATIONAL INFERNAL REVENUE CODE OF 199
AMENDED, IS HEREBY AMENDED TO READ AS FOLLOWS:

“SEC. 288, DISPOSITION OF IXCREMENT AL. REVENUE.
(A) XXX

30


(G)DISPLACED WOR: SS FUND. - A DISPLACED
WORKERS’ FUND LN THE AMOUNT OF FIVE HUNDRED
MILLION — PESOS —_(P500,000,000) MAY BE
APPROPRIATED, IN ADDITION TO ANY ADJUSTMENT
FUND APPROPRIATED UNDER THE BUDGET OF THE
DEPARTMENT OF LABOR AND EMPLOYMENT, TO
PROVIDE TARGETED CASH GRANTS TO DISPLACED
WORKERS OF FIRM/S THAT MAY BE AFFECTED BY
THE RATIONALIZATION OF FISCAL LINCENT
PROVIDED THAT KARMARKING FOR THIS FUND
SHALL TERMINATE AFTER FIVE YEARS FROM THE
EFFECTIVITY OF THIS ACT.

(H) SKILLS RETOOLING FUND. — A SKILLS RETOOLING
FUND IN ‘THE AMOUNT OF FIVE ITUNDRED MILLION
PESOS (P500,000,000) MAY BE APPROPRIATED, IN
ADDITION TO ANY FUND APPROPRIATED UNDER THE
BUDGET OF ‘THE TECHNICAL EDUCATION AND
SKILLS DEVELOPMENT AUTHORITY, TO PROVIDE
TARGETED TRAININGS TO DISPLACED WORKERS OF
FIRMS THAT MAY BE AFFECTED BY TH

OF r AL INCENTVES.

PROVIDED EARMARKING R THIS F

SHALL TERMINATE AFTER KIVE YEARS FROM THE

FRECTIVITY OF THIS ACT.

() INFORMATION = TECHNOLOGY = AND BUSINESS:
PROCESS OUTSOURCING (I1-BPO) SKILLS UPGRADING
PROGRAM. - A SKILLS UPGRADING PROGRAM
SPECIFICALLY FOR THE It-BPO INDUSTRY IN TUE
AMOUNT OF FIVE BILLION PESOS (P5,000,000,000) MAY.
BE ALLOCATED TO FUND A SKILLS UPGRADING
PROGRAM FOR THE IT-BPO INDUSTRY. THE FUND
SHALI. BE SOLELY USED TO PAY FOR FORMAL

OR TRAINING PROGRAMS — OF

TE OR PUBLIC SCIIOOLS AND
TRAINING CENTERS. PROVIDED THAT EARMARKING
FOR THIS FUND SHALL TERMINATE AFTER FIVE
YEARS FROM THE EFFECTIVITY OF THIS ACT.

(J) STUDENT VOUCIIERS. - INCREMENTAL REVENUE
FROM TAN PAYMENT = OF — EDUCATIONAL,
INSTITUTIONS THAT FAI. TO \IRET THE

BLISHED PERFORMANCE CRITERIA SHALL FUND.

A STUDENT VOUCHER ~=PROGRAM TO BE

IMPLEMENTED UNDER TITE COMMISSION ON HIGHER



EDUCTION (CHED) OR THE DEPAR' OF
EDUCATION (DEPED).

(OQUNIVERSAL HEALTHCARE. - INCREMENTAL REVENUE
FROM TAX PAYMENT OF HOSPITALS THAT FALL TO
MEET TIE ESTABLISIIED PERFORMANCE CRITERTA
SHALL FUND THE UNIVERSAL HEALTHCARE
PROGRAM TO BE IMPLEMENTED UNDER THE
DEPARTMENT OF HEALTH (DOID.

SEC. 34. A new title is hereby inserted beginning Section 291, Tithe XII of the
‘National Internal Revenue Code of 1997, as amended, to read as follows:

“TITLE XTIT
CHAPTER 1
GENERAL PROVISIONS ON TAX INCENTIVES

“SEC 291. GENERAL PROVISION. — AL‘, EXPORT
ACTIVITIES AND STRATEGIC INVESTMENTS, INCLUDING
THOSE INTENDED FOR THE DOMESTIC MARKET UNDER THE
STRATEGIC INVESTMENTS PRIORITY PLAN (SIPP) AS DEFINED
UNDER CHAPTER Tl OF THIS TIPLE, WHETHER LOCATED
INSIDE OR OUTSIDE ECOZONKS AND FREFPORT, ELIGIBLE FOR
REGISTRATION IN THE RESPECTIVE ESTMENT
PROMOTION AGENCIES (IPAS) EFFECTIVE JANUARY 1, 2020,
AND WHICH ILL QUALIFY FOR INCENTIVES UPON
EVALUATION, REVIEW, OR APPROVAL BY THE FISCAL
INCENTIVES REVIEW BOARD (FIRB), MAY ONLY BE GRANTED
TAX INCENTIVES UNDER TITS TITLE. PROVIDED, THAT THE
TAX INCENTIVES AVAILABLE UNDER THIS TITLE TO TIE
AFOREMENTIONED ENTERPRISES SHALL BE APPLICABLE TO
THE REGISTERED ACTIVITY OR PROJECT ONLY. INCOME OR
SALES DERIVED FROM NON-REGISTERED ACTIVITY OR
PROJECT SHALL, TITUS, BE SUBJECTED TO APPROPRIATE
‘TAXES UNDER THIS CODE. THE PERIOD OF AVAILMENT OF
INCENTIVES SHAT, BE RECKONED FROM THE START OF
COMMERCIAL OPERATION.

SEC. 292. INVESTMENT PROMOTION AGENC!

(A) SCOPE AND COVERAGE. - THIS TITLE SHALL COVER
ALL EXISTING INVESTMENT PROMOTION AGENCIES (IPAS) AS
DEFINED IN THIS CODE OR RELATED LAWS, AND ALL OTHER
IPAS AND OTHER SIMILAR AUTHORITIES THAT MAY BE
CREATED BY LAW. TILESE IPAS INCLUDE THE BOARD OF
INVESTMENTS (BOD, REGIONAL BOARD OF INVESTMENTS:
AUTONOMOUS REGION IN MUSLIM MINDANAO (RBOL. ARMM).
PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), BASE!

32


CONVERSION AND DEVELOPMENT AUTHORITY (BCDA), SUBIC
BAY = METROPOLITAN = AUTHORITY — (SBMA), CLARK
DEVELOPMENT CORPORATION (CnC), JOWN HAY
MANAGEMENT CORPORATION (JHMC),  PORO POINT
MANAGEMENT CORPORATION (PPMC), CAGAY AN ECONOMIC
ZONE AUTHORITY (CEZA), ZAMBOANGA CITY SPECIAL.
ECONOMIC ZONE AUTHORITY — (ZCSEZA),— PHIIVIDEC
INDUSTRIAT. AUTHORITY (PLA), AURORA PACIFIC ECONOMIC
ZONE AND FREEPORT AUTHORITY (APECO), AUTHORITY OF
THE FREEPORT AREA OF BATAAN (AFAB), AND TOURISM
INFRASTRUCTURE, AND ENTERPRISE ZONE AUTHORITY
(LIEZA).

(B) GOVERNING PROVISION FOR IPAS. — ALL. EXISTING
AND FUTURE IPAS SHALL UNIFORMLY RECOMMEND TIIE
GRANT OF TAX INC IVES PROVIDED IN THIS TITLE 1O THE
FIRB FOR ITS APPROVAL OR REVIEW.

(C) EXISTING CHARTERS OF IPAS. - THE IPAS SHALL
MAINTAIN ‘THEIR FUNCTIONS AND POWERS AS PROVIDED
UNDER THE SPECIAT. LAWS GOVERNING THEM EXCEPT ON
THE EXTENT MODIFIED BY THE PROVISIONS OF THIS CODE,
= PERTAINING TO THE REVIEW AND GRANT OF

. 293. DEFINITIONS - WHEN USED IN THIS TITI

(A) THE TERM ‘CAPITAL EQUIPMENT’ REVE
MACHINERY, EQUIPMENT, MAJOR COMPONENTS THEREOF,
FITTINGS AND ACCOMPANIMENTS WHICH ARE DIRECTLY AND.
REASONABLY NEEDED IN THE REGISTERED ACTIVITY OF THE
REGISTERED ENTERPRISE.

(B) THE TERM ‘DOMESTIC ENTERPRISE’ SHALT. MEAN A
PGISTERED ENTERPRISE WHICH PRODUCES GOODS FOR
LE OR REND! SERVICES EXCLUSIVELY TO THE
DOMESTIC MARKET OR DOES NOT MEET THE MINIMUM
EXPORT REQUIREMENT OF AN EXPORT

(©) THE TERM 'EXPORT SALES OF GOODS’ SHALL MEAN
‘THE SALES OF AN EXPORT ENTERPRISE PAID FOR IN FREELY
ce RTIBLE FORFIGN CURRENCY INWARDLY REMITTED TO
THE PHILIPPINES, FROM TIE FOLLOWING:

() THE SALE AND ACTUAL SIMPMENT OF GOODS FROM
THE PHILIPPINES TO A FOREIGN COUNTRY BY AN
EXPORT ENTERPRIS

Q) SALES TO DIPLOMATIC M
COVERED BY INTERNATION:

SIONS AND INSTIT!
TREATY;

33


@) SALES OF AN EXPORT ENTERPRI TO AN
INTERNATIONAL SEA OR AIR TRANSPORT OPERATIONS.
OF GOODS, EQUIPMENT, SPARE PARTS, AND SUPPLIES,
CEPT FUEL, FORMING PART OF DIRECT COSTS AND
TO BE USED IN THE AIRCRAFT OR SEACRAFT, AND
CAPITAL EQUIPMENT NEEDED FOR THE SHIPPING OR
AIR TRANSPORT OPERATIONS;

(D) THE TERM ‘EXPORT S OF SERVIC. SHALL.
MEAN THE SALES OF AN EXPORT ENTERPRISE, PAID FOR IN
FREELY CONVERTIBLE FOREIGN CURRENCY INWARDLY
‘CED TO THE PHILIPPINES, FOR THE FOLLOWING:

(1) SERVICES RENDERED TO NON-RESIDENT FORE
CLIENTS BY EXPORT ENTERPRISES;

@) SERVICES RENDERED TO DIPLOMATIC MISSIONS
AND INSTITUTIONS COVERED BY INTERNATIONAL
TREATY;

@) SERVICES FOR THE OVERHAUL, REPAIR, AND
MAINTENANCE OF INTERNATIONAL SHIPPING, OR AIR
TRANSPORT OPERATIONS.

(EF) THE TERM ‘INVESTMENT PROMOTION AGENCIES’
(PAS) SUALL REFER TO GOVERNMENT ENTITIES CREATED BY
LAW, EXECUTIVE ORDER, DECREE OR OTHER ISSUANCE, IN
CHARGE OF PROMOTL STMENTS, ADMINISTERING TAX
AND NON-TAX INCE AND/OR OVERSEEING THE
OPERATIONS FOR TUE DIFFERENT ECONOMIC ZONES AND
FREEPORTS IN ACCORDANCE WITH THEIR) RESPECTIVE
CHARTERS. TI INCLUDE THE BOARD OF INVES
(BOD, REGIONAL BOARD OF INVESTMENTS AUTONOMOU:
REGION IN MUSLIM MINDANAO (RBOIL-ARMM), PHILIPPI!
ECONOMIC ZONE AUTHORITY (PEZA), BASES CONVERSION
AND DEVELOPMENT AUTHORITY (BCDA), SUBIC BAY
METROPOLITAN AUTHORITY (SBMA), CLARK DEVELOPMENT.
CORPORATION = (CDC), JOLIN. HAY. MANAGEMENT
CORPORATION (JHMC),  PORO POINT | MANAGEMENT
CORPORATION — (PPMC). AYAN ECONOMIC — ZONE
AUTHORITY (CEZA), ZAMBOANGA CITY SPECIAL ECONOMIC
ZONE AUTHORITY — (ZCSEZA), — PHIVIDEC — INDUSTRIAT.
AUTHORITY (PIA), AURORA PACIFIC ECONOMIC ZONE AND.
FREEPORT AUTHORITY (APECO), AUTHORITY OF THE
FREEPORT AREA OF BATAAN  (AFAB), TOURISM
INFRASTRUCTURE AND ENTERPRISE ZONE AUTHORITY
(THe AND ALL OTHER SIMILAR AUTHORITIES THAT MAY
BE ED BY LAW IN THE FUTURE.

34


(F) THE TERM ‘REGISTERED ENTERPRISE’ SUALI, WEAN
ANY INDIVIDUAL, PARTNERSHIP, CORPORATION, PHILIPPINE
BRANCH OF A FOREIGN CORPORATION, OR OTHER ENTITY
ORGANIZED AND EXISTING UNDER PHILIPPINE LAWS AND
REGISTERED WITH AN INV TENT PROMOTION AGENCY
(IPA) AS DEFINED UNDER REPUBLIC ACT NO. 10708, OR THE
TIMTA LAW, PROVIDI HOWEVER, THAT TIE THRM
“RES ERED ENTERPRISE” SHALL NOT INCLUDE ANY OF THE
FOLLOWING SERVICE ENTERPRISES SUCII AS, BUT NOT
LIMITED ‘TO, THOSE ENGAGED IN CUSTOMS BROKERAC
TRUCKING OR FORWARDING — SERVICES, NYLORIAL,
SERVICES, SECURITY "ICE!

BE DETERMINED RY THE IPA BOARD, IRRESPEC
LOCATION, WHETHER INSIDE OR OUTSIDE THE ZON:
ACCREDITED AND/OR LICENSED BY ANY OF THE IP:
WHOSE INCOME DELIVERED WITHIN THE ECONOMIC ZONES:
SHALL BE SUBJECT TO TAXES UNDER THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED,

(G) THE TERM ‘SPECIAL ECONOMIC ZONE’ OR ‘ECOZONE’
SHALL REFER TO 4 SELECTED AREA WITIL WHICH TS HIGHLY
DEVELOPED, OR WHICH HAS THE POTENTIAL 10 BE
r LOPED — INTO, = AGRO-INDUSTRIAL, — INDUSTRIAL,
INFORMATION ~~ TECHNOLOGY, — TOURIST/RECREATIONAL,
WHOSE METES AND BOUNDS ARE KIXED OR DELIMITED BY
PRESIDENTIAL PROCLAMATIONS AND WITHIN A SPECIFIC
GEOGRAPHICAL ARFA. AN ECOZONE MAY CONTAIN ANY OR
ALL OF THE FOLLOWI! NDUSTRIAL, ATES (IFS), EXPORT
PROCESSING ZONES (EPZS), ICT PARKS AND CENTERS, AND
FREE TRADE ZONES, PROVIDED, HOWEVER, THAT AREAS
WHERE MINING EXTRACTIONS ARE UNDERTAKEN SHALL NOT
HECLARED AS ECOZONES. PROVIDED FURTHER, THAT THE
SHOULD COMPLY WITH THE
!OUS LAND AREA TO BE DETERMINED BY THE FISCAL
INCENTIVES REVIEW BOARD (FIRB).

(H) THE TERM “FREEPORT ZONES’ REFERS TO AN
ISOLATED AND POLICED AREA ADJACENT TO A PORT OF
ENTRY, WHICH SHALL BE OPERATED AND MANAGED AS A
SEPARATE CLSTOMS TERRITORY TO ENSURE FREE FLOW OR
OF GOOr THOSE .
PROHIBITED BY LAW, WITHIN, INTO, AND EXPORTED OUT OF
TNE FREEPORT ZONE WHERE IMPORTED GOODS MAY BE
OADED FOR IMMEDIATE 1 HIPMENT OR STORE

y ‘D, IERWISE MANIPULA’
WITHOUT BEING SUBJECT TO IMPORT DUTIES. HOWEY
MOVEMENT OF THESE IMPORTED GOODS FROM THE



TRADE AREA TO A NON-FREE TRADE AREA IN THE COUNTRY
SHALL BE SUBJECT TO ALL APPLICABLE INTERNAL REVENUE.
TAXES AND DUTIES.

() THE TERM X EXPENDITURES’ REFER TO
PROVISIONS OF LAW THAT GIVE RELIEF IN THE FORM OF TAX
SUBSIDIES OR TAX INCENTIVES TIIAT REDUCE TAX
REVENUES. FOR PURPOSES OF LOWERING THE CORPORATE,
INCOME TAX RATE, THE ESTIMATES OF TAX EXPENDITUR!
SHALL INCLUDE ALL TAX SUBSIDIES OR TAX INCENTILV!
OF BY BUSI TAXPAYERS TN A PARTICULAR
YEAR AS REPORTED BY THE DOF, PROFIDED, THAT IN TIE VAT
SHOULD BE ACCOUNTED NET OF REFUND,

CHAPTER I

TAX AND DUTY INCENTIVES

SEC. 294. — THE FOLLOWING TAX AND CUSTOMS DUTY
INCENTIVES MAY BE GRANTED FOR QUALIFIED REGIST D
ENTERPRIS AS DETERMINED BY THE BOARD OF TIE
RESPE INVESTMENT PROMOTION AGENCY (IPA),
SUBJECT YO THE REVIEW OR APPROVAL OF TITE FIRB.

(A) INCOME TAN INCENTIVES

(a) INCOME TAN HOLIDAY (TH). — THE ITH SULALL BE
GRANTED FOR A PERIOD NOT DING THREE (3)
YEARS: PROVIDED, THAT AFTER THE EXPIRATION OF
‘HE tH, THE FOLLOWING INCENTIVES MAY BE
APPLIED FOR A PERIOD NOT EXCEEDING FIVE (5) YEARS,
WHICH INCLUDES TILE PERIOD OF ITH AVATLMENT.

(b) REDUCED CORPORATE INCOME TAX. - A REDUCED
TAX RATE OF EIGHTEEN PERCENT (18%) OI THE
TAXABLE INCOME AS DEFINED UNDER SECTION 31 OF
THIS CODE. PROVIDE THAT IN THE CASE OF
REGISTERED ENTERPRISES WITHIN ECONOMIC ZONES
AND FREEPORTS THE TAX SHALL BE PAID AS FOLLOWS:

15% TO THE NATIONAL GOVERNMEN'

% TO BE DIRECTLY REMITTED TO THE
TREASURI OFFICE OF THE PROVINCE
WHERE THE ENTERPRISE IS LOCATED, IN
LIEU OF THE LOCAL BUSINESS TAX



1.5% TO BE DIRECTLY REMITTED TO THE
TREASURER'S, OFFICE OF THE
MUNICIPALITY OR COMPONENT CITY
WHERE THE ENTERPRISE IS LOCATED, IN
LIEU OF THE LOCAL BUSINESS TAX;

PROVIDED THAT LF THE ENTERPRISE
UNDER TIE JURISDICTION OF A HIGHLY
URBANIZED CITY (IUC), THE 3% SHARE OF
THE LGU SHALL BE DIRECTLY REMITTED
TO THE TREASURER'S OFFICE OF THE HUC

(©). DEPRECIATIO:

OF THE ASSETS THAT IS
ACQUIRED FOR 'S PRODUCTION OF GUODS
AND SERVICES (QUAL. ED CAPITAL EXPENDITURE)

L TEN PERCENT (10%) FOR BUILDINGS; AND.

Ho TWENTY PERCENT (20%) FOR MACHINERIES

AND EQUIPMENT, OR MAY BE COMPUT!

YG THE DOUBLE DELINING 2
METHOD. PROVID, THAT THE ASSETS 1S
ACQUIRED DIRECTLY FOR THE ENTITY'S
PRODUCTION OF GOODS AND SERVICES
OTHER THAN ADMINISTRATIVE AND OTHER
SUPPORT SERVICES, AND

(dy) UP TO FIFTY PERCENT? (50%) ADDITIONAL DEDUCTION
ON THE INCREMENT OF DIRECT LABOR EXPENSE.
PROVIDED, THAT THIS DOES NOT INCLUDE INDIRECT
LABOR, SALARIES AND WAGES, AND OTHER

URREED FOR ADMINISTRATIVE

AND OTHER SUPPORT SERVICES.

UP 10 ONE HUNDRED PERCENT (100%) ADDITIONAL
(D DEVELOPMENT
AR. PROVIDED, THAT IT
REGISTERED

JS DIRECTLY RELATED
ACTIVITIVAES OF THE ENTITY

@ UP tO ONE HUNDRED PERCENT (100%) ADDITIONAL
DEDUCTION ON TRAININGS INCURRED. PROVIDED,
THAT IT IS GIVEN TO THE EMPLOYEES ENGAGED
DIRECILY IN THE ENTITY'S PRODUCTION OF GOODS
AND SERVICES, PROVID FURTHER, THAT THE

INCERNED IPA HAS ISSUED A CORRESPONDING

CERTIFICATE OF ENTITLEMENT UPON APPLICATION,

AND A CERTIFICATE OF APPROVAL AFTER A RE -

NTATIONS OF TRAININGS SUBMITTED BY

ERPRISE AT THE END OF THE TAXABLE YEAR,

OTHERWISE, THIS INCENTIVE SHALL BE DEEMED

WAIVED.

37


(g) UP TO ONE HUNDRED PERCENT (100%) DEDUCTION ON
INFRASTRUCTURE DEVELOPMENT. REGISTERED
ENTERPRIS! ESTABLISHING THEIR ACTIVITY IN AN
AREA THAT THE STRATEGIC INVESTMENTS PRIORITY
PLAN (SIPP) DESIGNATES AS NECESSARY FOR COUNTRY-
WIDE DEVELOPMENT OR IN AN AREA FOUND TO BE
DEFICIENT IN INFRASTRUCTURE, PUBLIC UTILITIES,
AND OTITER FACILITIES, SUCIT AS IRRIGATION,
DRAINAGE, OR OTHER SIMILAR WATERWORKS
INFRASTRUCTURE MAY DEDUCT FROM THE GROSS
INCOME N AMOUNT EQUIVALENT TO UP TO ONE
H PERCENT (100%) OF NECESSARY AND MAJOR
INFRASTRUCTURE WORKS IT MAY HAVE UNDERTAKEN
WITH THE PRIOR APPROVAL AND RECOMMENDATION
OF THE IPA CONCERNED; PROVIDED, THAT ‘THE TITLE
TO ALL SUCH INFRASTRUCTURE WORKS SILALL UPON
COMPLETION, BE TRANSFERRED TO THE PHILIPPINE
GOVERNMENT; PROVIDED FURTHER, THAT ANY
AMOUNT NOT DEDUCTED FOR A PARTICULAR YEAR
MAY BE CARRIED OVER FOR DEDUCTION FOR
SUBSEQUENT YEARS NOT EXCEEDING FIVE (5) YEARS
FROM COMMERCIAL OPERATION.

(h) DEDUCTION FOR REINVESTMENT ALLOWANCE TO
MANUFACTURING INDUSTRY. - WHEN A
MANUFACTURING REGISTERED ENTERPRISE REINVESTS
ITS UNDISTRIBUTED PROFIT OR SURPLUS IN ANY OF THE
ACTIVITIES LISTED IN THE SIPP, THE AMOUNT SO
REINVESTED TO A MAXIMUM OF FIFTY PERCENT (50%)
SHALL BE ALLOWED AS A DEDUCTION FROM ITS
TAXABLE INCOME WITHIN A PERIOD OF FIVE (5) YEARS
FROM THE TIME OF SUCH REINYESTME> PROVIDED,
THAT PRIOR APPROVAL AND RECOMMENDATION BY
TIE IPA CONCERNED OF SUCH REINVESTMENT WAS.
OBTALNED BY THE REGI: ED ENTERPRISE PLANNING
SUCH REINVESTMENT.

PROVIDED, THAT IN LIEU OF THE ITH UNDER (a) OR THE
SPECIAL RATE UNDER (b), THE TAX INCENTIVES UNDER (0), (@),
(@), (), (g) AND (h) MAY BE GRANTED ON AN INDUSTRY -SPECIFIC
BASIS A: IETERMINED BY TIE BOARD OF INVESTMENT IN ITS
STRATEGIC INVESTMENT PRIORITY PLAN.

PROVIDED FURTHER, THAT IN NO SUCIL CASE SIIALL
INCOME TAX INCENTIVE BE EXTENDED BEYOND ‘THE INITIAL
GRANT OF FIVE (5) YEARS.

PROVIDED FURTHER, THAT AGRO-INDUSTRIAL ACTIVITIES
IDENTIFIED IN THE STRATEGIC INVESTMENT PRIORITY PLAN

38


LOCATED OUTSIDE METRO MANILA AND OTHER URBAN
AREAS TO BE IDENTIFIED BY THE BOARD OF INVESTMENT
MAY BE GRANTED TWO (2) MORE YEARS OF INCENTIVES ON
TOP OF THE FIVE (8) YEARS STANDARD PERIOD.

PROVIDED FURTHER, THAT AN ADDITIONAL TWO (2) YEARS OF
INCOME TAX ID VE MAY BE GRANTED TO ACTIVITIES IN
LAGGING | ARI AS DEFINED BY THE BOARD OF
INVESTMENT, AND AREAS RECOVERING FROM ARMED
CONFLICT OR A MAJOR DISASTER.

PROVIDED FINALLY, THAT REGISTERED ACTIVITIES PRIOR TO
THE EFFECTIVITY OF THIS ACT RELOCATING FROM METRO
MANILA AND SELECTED AREAS OF REGIONS Ul AND IV-A TO
OTHER AREAS OF THE COUNTRY MAY BE ALLOWED A ‘EWO (2)
YEAR INCOME TAX INCENTIVE AS RELOCATION INCENTIVE.

(B) VALUE-ADDED TAX (

LOCATED IN:
PORT SALES IN THE PRECEDING YEAR IS AT LEAST
NINETY (90) PERCENT OF TOTAL SALES MAY BE EXEMPTED
FROM THE VAT. ALL OTHER REGISTERED ENTERPRISES
OUTSIDE ECOZONES OR FREEPORT, OR WHOSE EXPORT

PERCENT OF rors
RATED VAT.

(©) CUSTOMS DUTY INCENTIVES. - REGISTERED ENTERPRISES
FOR INCENTIVES MAY BE ALLOWED A MAXIMUM

‘ TOMS DUTY ON
IMPORTED CAPITAL EQUIPMENT, MACHINERY, AND SPARE
PARTS EXCLUSIVELY USED FOR CAPITAL EQUIPMENT AND
MACHINERY, ALL INCLUDING CONSIGNMENT THEREOF, RAW
MATERL USED IN THE MANUFACTURE, PROCESSING, AS
DEFINED HEREIN, OF PRODUCTS, AND IMPORTATION OF
SOURCE DOCUMENTS BY THE REGISTERED ENTERPRISE.
PROVIDED, TUAT THE DUTY-FREE IMPORTATION SHALL BE
USED EXCLUSIVELY FOR THE REGISTERED EXPORT ACTIVITY,
PROVIDED FURTHER, YHAT EXPANSION OF REGISTERED
ACTIVITIES MAY BE GRANTED DUTY EXEMPTION ON CAPITAL
EQUIPMENT ONLY, — SUBJE TO THE FOLLOWING
CONDITIONS:

i) THE ACTIVITY IS STILL COVERED BY THE
STRATEGIC INVESTMENTS PRIORITY PLAN (SIPP) OR IS
AN INNOVATION PROJEC

(Ul) CUSTOMS DUTY EXEMPTION WILL ONLY APPLY ON
THE INCREMENTAL PORTION OF THE ACTIVITY; AND



(Wb THE CUSTOMS DUTY EXEMPTION EXTENSION
SHALL NOT EXCEED FIVE (8) YEARS.

FOR THIS PURPOSE, ‘PROCESSING’ SHALL REFER TO
CONVERTING RAW MATERIALS INTO MARKETABLE FORM
THROUGIL PHYSICAL, MECHANICAL, CHEMICAL,
ELECTRICAL, BIOCHEMICAL, BIOLOGICAL, OR OTHER MEANS,
OR BY A SPECIAL, TREATMENT OR A SERIES OF ACTIONS,
SUCH AS SLAUGHTERING, MILLING, PASTEURIZING, DRYING,
OR DESICCATING, QUICK FREEZING, THAT RESULTS IN A
CIIANGE IN THE NATURE OR STATE OF THE PRODUCTS. MERE
OR PACKAGING SHALL NOT CONSTITUTE

‘SOURCE DOCUMENTS’ REFER TQ INPUL MATERIALS AND
DOCUMENTS REASONABLY NEEDED BY LT. AND 1 ABLED
INDUSTRI ICH AS, BUT NOT LIMITED TO, BOOKS,
DIRECTORIES, MAGAZINES, NEWSPAPERS, BROCHURES,
PAMPHLETS, MEDICAL RECORDS/FILES, LEGAL
RECORDS/ILES, INSTRUCTION MATERTALS, AND
DRAWINGS/BLUEPRINTS/OUTLINES.

CHAPTER HL

ADMINISTRATION OF TAX INCENTIV

SEC, 295. EXPANDED FUNCTIONS OF THE FISCAL.
INCENTIVES REVIEW BOARD. - THE INCENTIVES
TION 290 MAY BE GRANTED BY THE KI
REVIEW BOARD (FIRB) TO THE REGISTERE!
THE EXTENT OF THEIR REGISTERED ACTIVITY UPON
RECOMMENDATION OF THE ADMINISTERING LNY! 1
PROMOTION AGENCY (IPA). THE PERIOD OF AVAILMENT OF
INCENTIVES SHALL BE RECKONED FROM THE START OF
COMMERCIAL OPERATION. IN THIS REGARD, TILE FIRB
CREATED UNDER PRESIDENTIAL DECREE (PD) NO. 776, AS
AMENDED BY PD 1931 AND PD 1985, OFFICE OF THE PRESIDENT
MEMORANDUM ORDER NO. 23, SERIES OF 1986 AND EXECUTIVE
ORDER 93, SERTES OF 1986, XPANDED TO INCLUDE
TIE FOLLOWING FUNCTIONS AND POWERS:

a) TO SERVE AS THE OVER-ALI. ADMINISTRATOR OF ALL
INVESTMENT INCENTIV

b) TO REVIEW ALL IPA POLICY DECISIONS RELATED TO THE
ENDORSEMENT AND AVALLMENT OF TAX INCENTIVES;

40


©) TO REVIEW THE IPAS’ RECOMMENDATION AND APPROVE
THE GRANT OF INVESTMENT TAX INCENTIVES OF TIE
FOLLOWING:

1 PROJECTS OR ACTIVITIES WHICH MAY POSE RISK
TO THE ENVIRONMENT, HEALTH, AND THE
ECONOMY.

IL PROJECTS OR ACTIVITIES WIIOSE APPROVAI, IN
THE IPA BOARD LEVEL ENCOUNTERS A
DEADLOCK.

d) TO PUBLISH THE NAMES OF THE REGISTERED ENTERPRISES:
OR BENEFICIARIES OF TAX INCENTIVES WITH APPROVED
ESTIMATED AMOUNT OF THE CORRESPONDING INCENTIVES;
AND.

e) TO GRANT TAN SUBSIDIES TO GOVERNMENT-OWNED
AND/OR -CONTROLLED CORPORATIONS (GOCCS),
GOVERNMENT INSTRUMENTALITIES (GIS), GOVERNMENT
COMMISSARIFS, AND STATE UNIVERSITIES AND COLLEGES
(SUCS) AS MAY BE PROVIDED UNDER THE ANNUAI GENERAT.
APPROPRIATIONS ACT.

PROVIDED THAT,
SECRETARY OF FINANCE SE
SHALL HAVE VETO POWER AS
PRUD!
OR SUSPEND THE GRANT OF INCENTIVES UPON THE REV!
AND RECOMMENDATION OF THE FIRB BASED ON THE
EVALUATION OF CRITERIA STATED IN SEC. 295 (C).

CHAIR OF THE FIRB, THE
EXERCISE OVERSIGHT AND
IEC

PROVIDED FURTHER, THAT THE SECRETARY OF
FINANCE SHALL AUTOMATICALLY BE THE CO-CHAIR OF ALL
THE EXISTING AND FUTURE IPAS

PROVIDED FINALLY, THAT THE NATIONAL ECONOMIC
AND DEVELOPMENT AUTITORITY (NEDA) AND THE
DEPARTMENT OF TRADE AND INDUSTRY (DTI) SHALL BE A
MEMBER OF ALT. IPAS, BOTH EXISTING AND CREATED IN THE
FUTURE.

. 296. COMPOSITION OF THE FIRB - THE FIRB SHALE. BE
RECONSTITUTED AS FOLLOWS:

BOARD PROPER:

CHAIRPERSON — SECRETARY OF FINANCE,

MEMBERS ~ SECRETARY TRADE AND INDUSTRY

at


NED!

DIR) TOR GENERAL OF THE
ECONOMIC AND DEVELOPME!
(NEDA)
— SECRETARY OF BUDGET AND MANAGEMENT
ECUTIVE SECRETARY

NATIONAL
AUTHORITY

TECIINICAL COMMITTEE — UNDERSECRETARY OF I'INANCE

DERSECRETARY OF TRADE AND
INDUSTRY

- UNDERSECRETARY OF BUDGET AND

MANAGEMENT

~ DEPUTY DIRECTOR GENERAL OF

COMMISSIONER OF — INTERNAL
REVENUE

— COMMISSIONER OF CUSTOMS
EXECUTIVE DIRECTOR OF ‘THE
NATIONAL TAX RESEARCH CENTER
(NERC)

SECRETARIAT —NFRC

CHAPTER IV

LIES FOR TAX INCENTIVES

‘STRATEGIC INVESTMENTS PRIORITY PLAN’
(SLPP), — ‘THE BOARD OF INVESTMENT (BOD, IN COORDINATION
WITIT THE OFFICE OF THE PRESIDENT, THE CONCERNED IPAS,
AND OTHER GOVERNMENT AG! THE PRIVATE
SECTOR, SHALL FORMULATE THE SIPP TO BE SUBMITTED TO
THE PRESIDENT FOR HIS APPROVAL THROUGH THE ISSUANCE
OF AN EXECUTIVE ORDER NOT LATER THAN DECEMBER OF
THE THIRD YEAR SET FOR PERIODIC REVIEW. THE PLAN
SHALL BE VALID FOR A PERIOD OF TIIR' UBIECT
‘TO REVIEW AND AMENDMENT AS THE NEED ARISES.

OLLOWING CRITERIA SIIALL BE COMPLIED WITIT
1 OF ECONOMIC ACTIVITIES LN THE PLAN:

a THE ACTIVITY SHALL BE COVERED BY THE
PHILIPPINE DEVELOPMENT PLAN OR LTS EQUIVALENT
AND OTHER GOVERNM PROGRAMS, AND SHALL
REFLE¢ THE HIGH-LEVEL PRIORITIES QF ‘THE
COUNTRY;

b. THE ACTIVITY SHALL ENDEAVOR TO BE NEUTRAL IN
TERMS OF NATIONALITY AND MARKET, PROVIDED
THAT THOSE INTENDED FOR THE DOMESTIC MARKET

42


BE LMPORT-SUBSTITUTING OR JMPORT-COMPETING
PRODUCTS OR ACTIVITIES;

PERFORMANCE SITALL BE
MEASURABLE IN TI LES, ACT
INVESTMENTS, ACTUAL JOB € TON, INVESTMENTS
IN LAGGING REGIONS AS DEFINED IN THE  SIPP,
INVESTMENT AND EMPLOYMENT IN RESEARCH AND
DEVELOPMENT, LINKAGES CREATION, AND SPLLL-OVER
EFFECTS, AMONG OTIIERS;

© THE ACTIVITY

ad. THE ACTIVITY THOSE THAT.

ARE PART OF CROS

HALT, NOT INCLUDE
SUBSIDY SCIIEY

e. THE ACTIVITY IN LAGGING REGIONS SIALL BE GIVEN
PREFERENCE;

f THE AC TAKE INTO ACCOUNT THE

FOLLOWING:

IVITY SHALL

(1) SUBSTANTIAL AMOUNT OF ACTUAL INVESTMENTS;

@) CONSIDERABLE GENERATION OF ACTUAL FULL TIME
EMPLOY MENT;

@) ADOPT INCLUSIVE BUSINESS ACTIVITIES AND VALUE-ADDED
PRODUCTION BY MICRO, SMALL, AND, MEDIUM-SIZE
ENTERPRISES (MSM

(4) USE OF MODERN OR NEW TECHNOLOGY;

) ADOPTION OF ADEQUATE ENVIRONMENTAL PROTECTION
SYSTEMS;

APS IN THE SUPPLY/VALUE CHAIN
‘ALUE CHAIN OR PRODUCT LADDER:

(6) ADDRESS MISSING G.
AND/OR MOVE UP TIL

(7) PROMOTION OF MARKET COMPETITIVENESS; AND

(@) COMMERCIALIZATION OF IDEAS AND INTRODUCTION OF
INNOVATION ACTIVITIES WHETHER PRODUCT, PROCE
MARKETING, OR NEW BL MODEL.

THE THRESHOLD AMOUNT OF INVESTMENTS AND
EMPLOYMENT GENERATION REQUIRED FOR A SPECIFIC
ACTIVITY TO BE GRANTED TAX INCENTIVES AND RETAIN THE
TAX INCENTIVE SHALL BE SUBJECT TO A PERIODIC REVIEW
EVERY THREE (3) YEARS TAKING INTO CONSIDERATION
INTERNATIONAL STANDARDS AND OTHER INDIC.

43


THE ACTIVITY MUST COMPLY WITIT TIEE SPECIFIC
QUALIFICATION REQUIREMENTS AND/OR CONDITIONS FOR A
PARTICULAR SECTOR OR INDUSTRY AND OTITER
LIMITATIONS AS SET AND DETERMINED BY TILE BOL.

PROVIDED, THAT THE PRESIDENT MAY, IN THE INTEREST OF NATIONAL,
ECONOMIC DEVELOPMENT AND UPON THE RECOMMENDATION OF THE,
BOARD OF INVESTMENTS AND THE ECONOMIC MANAGERS, GRANT
INCENLIVES TO HIGHLY DESTRABLE PROJECTS THAT MAY INCLUDE
LHOSE THAT ARE NOT PROVIDED IN THE SIPP: PROVIDED, THAT THE
BENEKITS THAT THE GOVERNMENT COULD DERIVE FROM SUCH
INVESTMENT THERETO IS CLEAR AND CONVINCING AND FAR OUTWELGHS
THE COST OF INCENTIVES THAT WILL BE GRANTED. PROVIDED FURTHER,
THAT THE FOLLOWING CRITERIA, AMONG OTHERS, ARE CONSIDERED: (A)
MINIMUM INVESTMENT OF FIVE HUNDRED MILLION US DOLLARS
(UIS$$00,000,000); (By MINIMUM DIRECT EMPLOYMENT GENERATION OF AT
LEAST ONE THOUSAND FIVE HUNDRED (1,500) WITIHN THE FIRST YEAR OF
ITS OPERATION. PROVIDED, THAT THE GOVERNMENT MAY UTILIZE ITS
RESOURCES FOR THE GRANT OF INCENTIVES SUCII AS LAND USE, WATER
APPROPRIATION, POWER PROVISION, AND THE LIKE. PROVIDED FINALLY,
THAT THE TAX INCENTIVES OF ALL CLURRENELY REGISTERED FNTERPRISES
AND SECTORS QUALIFIED FOR INCENTIVES UNDER THE SPECTAT. LAWS
WITCH WILL BE REI SHALL CONTINUE FOR THE FIRST ‘LWO (2) YEARS:
FROM THE EFFECTIVITY OF TIS ACT.

SEC, 298. AMENDMENTS. - SUBJECT TO PUBLICATION
REQUIREMENTS AND TIE CRITERIA FOR INVESTMENT
PRIORITY DETERMINATION, THE BOI MAY, AT ANY TIME,

ON THE PLAN IF IT CONSIDERS THAT SUCH ACTIVITY IS NO
LONGER A PRIORITY. THE IPAS SHALL NOT ACCEPT
APPLICATIONS IN AN AREA OF INVESTMENT PRIOR TO THE
APPROVAL OF THE SAME AS A PREFERRED AREA OR AFTER
APPROVAL OF ITS DELETION AS A PREFERRED AREA OF
INVESTMENT JN THE PLAN.

SEC. 299. PUBLICATION, - UPON APPROVAL OF THE PLAN,
IN WHOLE OR IN PART, OR UPON APPROVAL OF AN
AMENDMENT THEREOF, THE PLAN OR THE AMENDMENT,
SPECIFYING AND DECLARING THE ARFAS OF INV
SHALL, BE PUBLISHED IN AT LEAST ONE (1) NEW
GENERAL CIRCULATION OR THE OFFICLAL GAZETTE AND ALL,
SUCH AREAS SHALL BE OPEN FOR APPLICATION UNTIL
PUBLICATION OF AN AMENDMENT OR DELETION THEREOF.

44


SEC. 300. QUALIFICATIONS OF A REGISTERED ENTERPRISE
FOR TAX INCENTIVES. — A REGISTERED ENTERPRISE MUST
SATISFY THE FOLLOWING CONDITIONS FOR CONSIDERATION
IN THE REVIEW AND GRANT OF TAX INCENTIVES:

A. [TWILL ENGAGE LN AN ACTIVITY INCLUDED IN TITE PLAN;

B. IF THE APPLICANT IS ENGAGED OR PROPOSES TO ENGAGE,
IN ACTIVILLES OTHER THAN THE REGISTERED PROJECTS, IT
INSTALL AN ADEQUATE ACCO) ING SYSTEM THAT
SHALL IDENTIFY THE INVESTMENTS, REVENLIES, COSTS AND
PROFITS OR LOS: OF EACH REGISTERED PROJECT
UNDERTAKEN BY THE ENTERPRISE SEPARATELY FROM THE
AGGREGATE INVESTMENTS, REVENUES, COSTS AND PROFITS
OR LOSSES OF TITE WIIOLE ENTERPRISE, OR ESTABLISH A
SEPARATE CORPORATION FOR EACH REGISTERED PROJECT
LF THE IPAS SHOULD SO REQUIRE;

C. TE SHALL SATISFY THE PERFORMANCE TARGETS SET
FORTIL IN THE SIPP, WHICH SHALL INCLUDE, BUT NOT
LIMITED TO, EXPORT SALES, ACTUAL INVESTMENTS, ACTUAL
JOB CREATION, INVESTMENTS IN LAGGING REGIONS AS
DEFINED IN THE SIPP, INVESTMENT AND EMPLOYMENT IN
RESEARCH AND DEVELOPMENT, AND INVESTMENT AND
EMPLOYMENT IN INTERMEDIATE PARTS AND COMPONENTS,
SUPPLIES, AND RAW MATERIALS. AMONG OTHERS: AND

D. IT SIIALL REGULARLY REPORT AND COMPLY WITI THE
REPORTORIAL REQUIREMENTS UNDER REPUBLIC ACT NO.
10708 OR THE TIMTA LAW.

PROVIDED, YHA NON-COMPLIANCE OF THE ABOVE-
MENTIONED CONDITIONS SHALI, CAUSE THE REVOCATION OF
THE TAX INCENTIVES GRANTED AND THE REGISTERED
ENTERPRISE SHALL BE LIABLE ‘lO ‘THE PENALTIES UNDER
SECTION 301 OF THIS CODE. PROVIDED FURTHER, THAT
REGISTERED EXPORT ENTERPRISES INSIDE ECONOMIC ZONES
AND FREEPORTS MAY AVAIL OF THE TAX AND DUTY FREE
IMPOR! “APITAL EQUIPMENT AND RAW MATERIALS:
DIRECTLY AND EXCLUSIVELY USED IN THE REGI ED
ACTIVITY INSIDE THE ZONES.

CHAPTER V

AVAILM

FOF TAX INCENTIVES

EC. 301. INCOME TAN-BASED INCENTIVES. ~ ALL
REGISTERED ENTERPRISES ARE REQUIRED TO FILE ALL
THEIR TAX RETURNS USING THE EI! RONIC/ONLINE
FACILITIES OF THE BUREAU OF INTERNAL REVENUE (BIR). ON

45


AVAILING ‘THE INCOME TAX-BASED INCENTIV
RED ENTERPRISE SHALL BE REQUIRED TO S$!
y ISSLED BY THE FIRB AND
.CH THE SAME TO ITS INCOME TAX RETURN (ITR) OR
ANNUAL INFORMATION RETURN (AIR), WHICHEVER 1S
APPLICABLE. THEREAFTER, THE REGISTERED ENTERPRISE
SHALL FILE ITS CLAIM WITH THE BIR FOR VALIDATION

FAILURE TO SECURE AND ATTACH THE CERTIFICATION
TO TE R OR AIR, AND/OR FILE THE INCENTIVE AVAILMENT
APPLICATION SHALL CAUSE ‘THE FORFEITURE OF THE
INCENTIVE FOR THAT TAXABLE PERIOD.

SEC. 302. CUSTOMS DUTY ENEMPTION ON CAPITAL
PME. IMPORTATION OF CAPITAL EQUIPMENT,
MACHINERY AND SPARE PARTS EXCLUSIVELY USED FOR
CAPITAL EQUIPMENT AND = MACHINERY — INCLUDING
CONSIGNMENT THEREOF BY REGISTERED ENTERPRISES MAY
BE EXEMPTED TO THE EXTENT OF ONE HUNDRED PERCENT.
(100%) OF THE CUSTOMS DUTY, PROVIDED THAT THE
FOLLOWING CONDITIONS ARE COMPLIED WITH:

(A) THE CAPITAL EQUIPMENT AND/OR SPARE PARTS IS
ARE DIRECTLY AND REASONABLY NEEDED AND WILT
BE USED EXCLUSIVELY IN AND AS PART OF THE DIRECT
COST OF THE REGISTERED ACTIVITY OF THE
REGISTERED ENTERPRISE, AND ARE NOL
MANUFACTURED DOMESTICALLY IN — SUFFICIE!
QUANTITY, OF COMPARABLE QUALITY AND A’
REASONABLE PRICES. PRIOR APPROVAL OF THE IPA
MAY B CURED FOR TIIE PART TIME UTILIZATION OF
SAID EQUIPMENT IN A NON-REGISTERED ACTIVITY TO
MANIMIZE USAGE THEREOF, = PROVIDED THE
PROPORTIONATE TAXES AND DUTIES ARE PAID ON A
SPECIFIC EQUIPMENT AND MACHINERY IN PROPORTION
TO ITS UTILIZATION FOR NON-REG ACTIVITIES.
IN THE EVENT, IT SHALL BE USED FOR NON-REGISTERED
ACTIVITY OF THE REGISTERED ENTERPRISE AT
ANYTIME WITIIN THE FIRST FIVE (3) YEARS FROM DATE
OF IMPORTATION, THE REGISTERED ENTERPRISE
SHALL FIRST SEEK PRIOR APPROVAL OF THE
AUTHORITY, AND PAY THE TAXES AND CUSTOMS

“TIES THAT WERE NOT PAID UPON FES IMPORTATION;

(B) THE APPROVAL OF THE IPA WAS OBTAINED BY TIE.
REGISTERED ENTERPRISE PRIOR TO THE IMPORTATION
OF SUCH CAPITAL EQUIPMENT AND/OR SPARE PART!

46


APPROVAL OF THE IPA MUST BE SECURED BEFORE ANY
SALE, TRANSFER OR DISPOSITION OF THE CAPITAL
EQUIPMENT AND/OR SPARE PARTS WHICH WAS GRANTED TAX
AND CUSTOMS DUTY EXEMPTION HEREUNDER IS MADE, AND
IT SHALL BE ALLOWED ONLY UNDER THE FOLLOWING
CIRCUMSTANCES:

fA) IF MADE TO ANOTITER ENTERPRISE ENJOYING
CUSTOMS DUTY EXEMPTION ON IMPORTED CAPITAL
EQUIPMENT AND/OR SPARE PARTS;

(B) IF MADE TO ANOTHER ENTERPRISE NOT DI
EXEMPTION ON IMPORTED CAPETAL EQUIPMENT
AND/OR SPARE PARTS, UPON PAYMENT OF ANY TAXES
AND DUTIES DUE ON THE NET BOOK VALUE OF THE
CAPITAL EQUIPMENT AND/OR SPARE PARTS TO BE
SOLD,

«© EXPORTATION OF CAPITAL EQUIPMENT,
MACHINERY , SPARE PARTS OR SOURCE DOCUMENTS, OR
THOSE, REQUIRED FOR POLLUTION ABATEMENT AND
CONTROL; OR

@) FOR REASONS OF PROVEN TECHNICAL
OBSOLESCENCE.

PROVIDED, TUAT IF THK R RED ENTERPRISE
SELLS, TRANSFERS OR DISPOSES THE AFOREMENTIONED
IMPORTED ITEMS WITHOUT PRIOR APPROVAL, THE
REGISTERED ENTERPRISE AND THE VENDI TRANSFEREE, OR
ASSIGNEE SHALL BE SOLIDARILY LIABLE TO PAY TWICE THE
AMOUNT OF TITE DUTY EXEMPTION THAT SHOULD HAVE.
BEEN PAID DURING ITS IMPORTATION. PROF , FURTHER,
THAT EVEN IF THE SALE, TRANSFER OR DISPOSITION OF THE
CAPITAL EQUIPMENT WAS MADE AFTER FIVE (5) YEARS FROM
DATE OF IMPORTATION WITH THE APPROVAL OF THE IPA,
THE REGISTERED ENTERPRISE IS STILL LLABLE LO PAY THE
DUTIES BASED ON THE NET BOOK VAL OF THE CAPITAL
{QUIPMENT LF LT HAS VIOLATED ANY OF [TS REGISERATION
TERMS AND CONDITIONS.

CTIAPTER VI

FINAT. PROVISIONS.

SEC. 303. NO DOUBLE REGISTRATION OF ENTERPRISE!
REGISTERED ENTERPRIS SHALT. NOT BE ALLOWED TO
REGISTER THEIR ACTIVITIES IN MORE THAN ONE (1) IPA.

a7


SEC. 304. GOVERNANCE RULES. — THE DIFFERENT IPAS
MAY REQUIRE DOMESTIC REGISTERED ENTERPRISES TO LIST
THEIR SHARES OF STOCK IN ANY ACCREDITED STOCK
EXCHANGE OR DIRECTLY OFFER A PORTION OF THER
CAPITAL STOCK TO THE PUBLIC AND/YOR THELR EMPLOY
WITHIN FIFTEEN (15) YEARS FROM DATE OF REGISTRATIO!

SEC. 308, INVESTMENTS PRIOR TO THE EFFECTIVITY OF
THIS ACT. EXISTING REGISTERED ACTIVITIES GRANTED THE
INCOME TAX HOLIDAY SHALL. BE ALLOWED TO CONTINUE
WITH THE AVAILMENT OF THE SAID INCENTIVE FOR THE
REMAINING PERIOD OF THE ITH OR FOR A PERIOD OF FIVE (5)
YEARS ONLY, WHICHEVER COMES FIRST; PROVIDED THAT
THE TAX INCENTIVE GRANTED TO EXISTING REGISTERED
ACTIVITIES SHALL BE ALLOWED TO CONTINUE FOLLOWING
THE SCHEDULE STATED HEREIN:

(Ay) TWO Q@) YEARS FOR ACTIVITIES THAT HAVE
RECEIVED THE SPECIAL TAX RATE OF 8% OF GROSS
INCOME EARNED FOR MORE THAN TEN (10) Y EARS;

(B) ‘THREE (3) YEARS FOR ACTIVITIES THAT HAVE
RECEIVED THE SPECIAL, TAX RATE OF 5% OF GROSS
INCOME EARNED BETWEEN FIVE (5) AND TEN (10)

(C) FIVE (5) YEARS FOR ACTIVITIES THAT HAVE
RECEIVED THE INCOME TAX HOLIDAY (ITH) OR THE
. TAX RATE OF 8% OF GROSS INCOME EARNED
BELOW FIVE @) YEARS.

PROVIDED THAT THE 5% TAX ON GRO
EARNED SHALL COMMENCE AFTER

INCOME
HE FPH PERIOD

HAS LAPSED ONLY FOR TITE REMAINING YEARS WITHIN
‘THE FIVE-YEAR PERIOD.

_ vATIO.
PROBABLE TO BELIEVE THAT THE REGISTERED
ENTERPRISE HAS VIOLATED ITS REGISTRATION TERMS AND
CONDITIONS, THE IPA SHALL RECOMMEND TO THE FIRB THE

s! OF TPS AVAILMENT OF INCENTIVES, UNTIL
PROVEN OTHERWISE.

IN CASE OF CANCELLATION OF THE CERTIFICATE OF
REGISTRATION GRANTED UNDER THIS ACT, THE BIR, IN
COORDINATION WITTT THE FIRB, WILL) REQUIRE THE
PAYMENT OF INCENTIVES ASSESSED TO HAVE BEEN GRANTED

48


AID ENTERPRISE FOR ITS REGISTERED ACTIVITY
AND IMPOSE CORRESPONDING FINES AND PENALTLES.

THE FOREGOING IS WIEIILOUT PREJUDICE TO THE
AUTHORITY OF THE BIR TO CONDUCT AUDIT AND IMPOSE
PENALTIES UNDER THIS CODE.

SEC. 307, ALL INTERNAL REVENUE TAX AND DUTY
OBLIGATIONS OF GOVERNMENT CORPORATIONS, SHALT. BE
CHARGEABLE TO THE TAX EXPENDITURE FUND OF THE
GOVERNMENT

SEC. 308. THE NAME OF RECIPIENTS OF INCENTIVES AND
THE AMOUNT OF INCENTIVES AVAILED SIIALL BE REPORTED
BY THE INVESTMENT PROMOTION AGENCIES ANNUALLY TO
CONGRESS. THE REPORT SHALT. BE MADE AVAILABLE TO THE
PUBLIC.

SEC. 34. Title NTI of the National Internal Revenue Code of 1997, as amended, is hereby
retided as Title XIV.

©, 35. Title XIV of the National Internal Revenue Code of 1997, as amended, is hereby
ed as Title XV,

36. Amending Clause. - to ensure that the DOF, NEDA and DTI are represented in the
Governing Boards of all IPAS, where the DOF shall aulomatically serve as ir, and DT
and NEDA as members, pursuant to section 295 of this the following provisions, among
others, are amended accordingly:

i Article 4 of Executive Order No. 226, as amended, entitled “Lhe
Omnibus Investments Code of 1987:”

Sections 9 and 13 (c) of Republic Act No. 7227, entitled “An Act
Accelerating the Conversion of Military Reservations into Other Productive
Uses, Creating the Bases Conversion and Development Authority for this
Purpose, Providing Funds therefor and for Other Purposes:”

iii, Scction 3. of Exvcutive Order No, 80, series of 1993, entitled
“Authorizing the Establishment of the Clark Development Corporation as the

Implementing Arm of the Bases Conversion and Development Authority for
the Clark Special Evonomic Zone, and Directing All Heads of Departments,
Bureaus, Offices, Agencies and Instrumentalities of Government to Support
the Program:

iv. Section 6 of Executive Order No, 132, series of 2002, entitled
“Authorizing the Creation of the Poro Point Management Corporation as the
Implomenting Arn of the Bases Conversion Development Authority over the
Poro Point Special Economic and Freeport Zone and Renaming the John Hay
Poro Point Development Corporation as the John Hay Management
Corporation:”



y. Section 9 of Republic Act No. 7903, entitled “An Act Creating a
Special Foonomic Zone and Freeport in the City of Zamboanga Creating for
this Purpose the Zamboanga City Special Economic Zone Authority,
Appropriating Funds therefor, and for other Purposes,”

vi. Section 14 of Republic Act No. 9728.
Bataan Economie Zone Located in the Munic
Bataan, into the Freeport Area of Bataan (Fab), Creating for this Purpose the
Authority of the Freeport Area of Bataan (AFAB), Appropriating Funds
thorefor and for other Purposes:

entitled “An Act Converting the

vii, Section 65 of Republic Act No. 9593, entitled “An Act Declaring a
National Policy for Tourism as an Engine of Investment, Employment, Growth
and National Development, and Strengthening the Department of Tourism and
its Attached Agencies to Eflcctively Efficiently implement that Policy, and
Appropriating Funds therefor:

viii. Section 15 of Republic Act No. 9490, entitled “An Act Establishing
the Aurora Special Economic Zone in the Provinee of Aurora, Creating for
the Purpose the Aurora Special Economic Zone Authority, Appropriating
Funds Therefor and for other Purposes.” as amended by Republic Act No.
10083;

Section 7 of Republic Act No. 7922, entitled “An Act Fstablishing a
Special Economic Zone and Freeport in the Municipality of Santa Ana and the
Neighboring Islands in the Municipality of Aparti, Province of Cagayan
Providing Funds Therefor, and for other Purposes:”

x. Section 6 of Presidential Deoree No, $38, entitled “Creating and
Establishing the Phividec Industrial Authority and Making It a Subsidiary
Agency of the Philippine Veterans Investment Development Corporation
Defining ils Powers, Functions and Responsibilities, and for Other Purposes,”
as amended by Executive Order No. 1031, series of 1985;

xi. Section 11 of Republic Act No. 7916, entitled “An Act Providing for
the Legal Framework and Mechanisms for the Creation, Operation,
Administration, and Coordination of Special Foonomic Zones in the
Philippines, Creating For This Purpose. The Philippine Economic Zone
Authority (PEZA), and for Other Purposes.”

Sec. 37. The following Laws are hereby amended to mandate all internal revenue tas and
duty obligations of the relevant entities be chargeable to the ‘Tax Expenditure Fund (TEF):

i, Section 18 of Republic Act No. 7884, entitled “An Act Creating the
National Dairy Authority to Accelerate the Development of the Dairy Industry
in the Philippines, Providing for a Dairy Development Fund, and for Other
Purposes:”

50


ii Section 8 of Republic Act No. 7903, entitled “An Act Crea
Feonomic Zone and Frovport in the City of Zamboanga for this Purpose the
Zamboanga City Special Economic Zone Authority, Appropriating Funds
Lherefor, and for Other Purpo

iii, Section 12-a of Republic Act No. 10083, entitled “An Act Amending
Republic Act No. 9490, otherwise known as the Aurora Special Economic
Zone Act of 2007,"

iv. Seotions 29. 57, 74, 95 (c) of Republic Act No. 9593, entitled “An Act
Declaring Tourism as Engine of Investment, Employment, Growth and
National Development and Strengthening the Department of Tourism or
Tourism Act of 2009:"

V. Section 10 of Presidential Decree No. 538, entitled “Creating and
Establishing the Phividee Industrial Authority and Making il a Subsidiary
Agency of the Philippine Veterans Investment Development Corporation
Defining its Powers, Functions and Responsibilities, and for Other Purpos:

Vi. Section 16 (a) (b) of Republic Act No, 9497, entitled “An Act Creating
the Civil Aviation Authority of the Philippines, Authorizing the Appropriation
of Funds Therefor, and for Other Purposes,”

Vii. Section 8 of Republic Act No. 7278, entitled “An Act Amending
Commonwealth Act 111, As Amended by PD 460, Entitled “An Act To Create
a Public Corporation Known as the Boys Scouts of the Philippines and to
Define its Powers and Purposes,” By Strengthening The Volunteer And
Democratic Character OF the Boys Scouls of the Philippines and for Other
Purposes:

viii, Section 11 (a), (b), (©). (d) of Republic Act No. 10073, entitled “An
Act Instituting the New Girl Scouts of the Philippines Charter, Penalizing
Violations therefor and for Other Purpose:

ix. Section 14 of Republic Act No. 7354, entitled “An Act Creating the
Philippine Postal Corporation, Defining its Powers, Functions and
Responsibilitics, Providing For Regulation of the Industry and for Other
Purposes Connected Therewith:”

x. Svotion & and 14 of Presidential Decree No. 269, entitled “Creating the
National Electrification Administration as a Corporation, Prescribing its
Powers and Activities, Appropriating the Necessary Funds ‘iherefore and
a National Policy Objective for the Total Flectrification of the
Philippines on an Area Coverage Service Basis, the Organization, Promotion
and Development of Elcctric Cooperatives to Attain the Said Objective,
Prescribing Terms and Conditions for their Operations, the Repoal Of RA
6038, and for Other Purposes.”



xi. Section 2 and 19 of Republic Act No. 9679, entitled “An Act
Amending The Home Development Mutual Fund Otherwise Known as the
Pag-lbig, Fund:”

xii, Scetion 17 (c) under section & of Republic Act No, 9376, entitled
“Increasing the Maximum Deposit Insurance Coverage, and Strengthening the
Regulatory and Administrative Authority and Financial Capability of PDICS”

sili. Section 13 of Republic Act No, 7820, entitled “An Act Creating the
Partido Development Administration, Defining its Powers and Functions,
Providing Fimds ‘Lherefor, and for Other Purposes:”

xiv. Svction $ (j) of Republic Act No. 9510. entitled “An Act Establishing,
the Credit Information System and for Other Purposes:”

xv. Section 13 (e) of Presidential Deeree No. 857. entitled “An Act
Providing for the Reorgmization of Port Administration and Operation
Functions in the Philippi Revising PD $05 Dated July 11, 1974, Creating
the Philippine Port Authority, by substitution. and for Other Purposes:

Xvi. Section 19 of Republic Act No, 6847, entitled “An Act Creating and
Establishing the Philippine Sports Commission. Defining its Pow
Functions, and Responsibilities. Appropriating Funds ‘Therefor, and for Other
Purposes;”

Xvi, Seotion & (a) (b) and section 13 of Republic Act No. 6395. entitled “An
Act Revising the Charter of the National Power Corporation;”

NVii, Section 1 of Republic Act No, 7291, entitled “An Act Restoring the
Fax and Duty Incentives Previously Enjoyed by the Velerans Federation of
The Philippines Under Republic Act Numbered Twenty-Six Hundred And
Korty:” and

xix. Section 21 of Republic Act No. 7306, entitled “An Act Providing for
the Establishment of the People’s Television Network, Inc., Defining its
Powers and Functions. Providing for its Sources of Funding and for Other
Purposes.”

Sec, 38, The lax treatment provisions of entities covered by the following franchise laws are
hereby amended or repeated o adhere to the provisions of this Act:

i. Section 14 of Republic Act No. 7783, entitled “An Act Granti
ms, Inc.. a Franchise to Establish. Install, Maintain, Lea’
irc andor Wireless ‘Lelecommunications

ii. Section 10 of Republic Act No. 7939, entitled “An Act Granting the
Island Country Telecommunications, Inc., a Franchise to Establish, Install,
in, Tease and Operate were and/or Wireless ‘Telecommunication

52


fem and Services, Lines, Circuits and Stations Within and Without the
Philippines, and for Other Purposes:”

iii, Section 9 of Republic Act No. 7961, entitled “An Act Granting to Cruz,
Telephone Company, Inc.. (CRUZTELCO), a Franchise to Install, Operate
And Maintain A Yelecommunications System Throughout the Philippin

iv. Section 8 of Republic Act No. 7962. entitled “An Act Granting the
Philippine Broadcasting Corporation a Franchise to Construct, Install, Operate
and Maintain Radio and Television Broadcasting Stations Within the
Philippines, and for Other Purposes.”

Svotion 8 of Republic Act No. 7963, entitled “An Act Granting the
Cebu Broadcasting Company a Franchise to Construct, Install, Operate and
Maintain Radio and Television Broadcasting Stations Within The Philippines
and for Other Purposes:”

vi. Section 8 of Republic Act No. 7966, entitled “An Act Granting the
ABS-CBN Broadcasting Corporation a Franchise to Constr stall,
and Maintain Television and Radio Broadcasting Stations in the Phi
and for ther Purposes:”

vii, Section 8 of Republic Act No. 7967, entitled “An Act Granting the
Pacific Broadcasting System, Inv. a Franchise to Construct, Install, Operate
and Maintain Radio and ‘felevision Broadcasting Stations Within the
Philippines and for Other Purposes:”

viii. Section 8 of Republic Act No. 7969, entitled “An Act Granting the
Central Catv. Inc. a Franchise to Establish, Maintain and Operate for
Commercial Purposes Cable‘Conununity Antenae Television Systems in the
Philippines:”

ix, Seotion 13 of Republic Act No. 8004, entitled “An Act Granting to
Millennia Telccommunications Corporation a Franchise to Install, Operate and
Maintain ‘elecommunication Services Within the Philippines and
Intemational Points, and for Other Purposes:”

x, Section 9 of Republic Act No, 10900. entitled “An Act Extending for
Another Twenty- (25) Years the Franchise Granted to Bell
Telecommunication Philippines, Inv., Amending for the Purpose Republic
No. 7692, entitled "An Act Granting Bell Telecommunication Philippines,
Inc., a Franchise (0 Install, Operate, and Maintain felecomm

Systems Throughout the Philippines and for Other Purposes:"

Si. Section 3 of Republic Act No. 7859, entitled “An Act Amending,
Section One of the Franchise of Worldwide Communications, Inc. Granted
Under Republic Act No. Five Thousand ‘Ihree Hundred Twenty-One and
Extending it for Another Twenty-Five (25) Years, and for Other Purposes:

53


xii. Section 9 of Republic Act No. 7908, entitled “An Act Granting, the
Multi-Media Telephony Incorporated, a Franchise to Construct, Establish,
Operate and Maintain Radio Paging System In the Philippines, and for Other
Purposes:”

Mili, Section 8 of Republic Act No. 8060, entitled “An Act Granting
Palawan Broadcasting Corporation a Franchise to Install, Construct, Operate
and Maintain Commercial Radio and Television Broadcasting’ Stations
‘Throughout the Philippines;”

xiv, Section 8 of Republic Act No. 8063. entitled “An Act Granting the
Beacon Communications Systems, Inc., a Franchise to Construct, Install.
Establish, Operate and Maintain Commercial Radio Stations in the
Philippines.”

Xv. Section 9 of Republic Act No. 8065, entitled “An Act Granting the Is
Cellular Communications, Inc., a Franchise to Construct, Maintain, Establish,
Operate Commercial Mobile and Fixed Wireless Telecommunications System
in the Philippines;”

Avi, Section 9 Republic Act No. 8066, entitled “An Act Granting the Ista
Paging Company. A Franchise to Construct, Maintain, Establish, and Operate
Commercial Radio Paging Services in the Phitippines;”

Avil, Section 8 of Republic Act No. 8067, entitled “An Act Granting the
Radio Gubat Network, Inv., a Franchise to Construct, Install, Operate and
Maintain Radio Broadcasting Stations in the Bicol Region;”

xviii, Scclion 8 of Republic Act No. 8068, entitled “An Act Granting a
Franchise to Agusan Communications Foundation, Inc., to Construct, Operate
and Maintain Stations for Radio and ‘Television in the Province of Agusan Del
Sur and for Other Purposes:

xix. Section 8 of Republic Act No. 8071, entitled “An Act Granting Vismin
Radio and Television Broadcasting Network, Incorporated a Franchise To
Construct, Install, Operate and Maintain for Commercial Purposes Radio and
Television Broadcasting Stations in the Visayas and Mindanao. and for Other
Purposes:”

Xx. Section 8 of Republic Act No, 8080, entitled “An Act Granting the
Asian-Pacific Broadcasting Company, Inc., a Franchise to Construct, Install,
Operate and Maintain Broadcasting Stations in the Phiippines;”

xxi Section 8 of Republic Act No. 8094, entitled “An Act Granting the Ipil
Broadcasting News Network, Inc. a Franchise to Construct. Install, Operate
and Maintain Radio and ‘Lelevision Broadcasting Stations in Zamboanga Del
Sur and for Other Purposes

54


Section 10 of Republic Act No. 8095, ontith ‘An Act Granting the
Islatel Corporation a Franchise to Construct, Maintain, Establish and Operate
Commercial Nationwide and Regional Transmission Network and Other
Telephone Services in the Philippines:”

xxiii, Section 8 of Republic Act No. 8096. entitled “An Act Granting the
Allied Broadcasting Center. Incorporated a Kra to Construct, Operate
and Maintain Stations for Radio in Cebu City and Other Areas in the
Philippines Where Frequencies Are Still Available For Radio Broadcasting
For Educational And Cultural, As Well As For Commercial Purposes:

xxiv. Scetion 8 of Republic Act No. 8097, entitled “An Act Granting the
Partido Broadcasting Corporation a Franchise to Construct, Install, Establish,
Operate and Maintain Broadcast and Cable Radio and Television Stations In
the Bicol Region;

AXV, Scotion 8 of Republic Act No. 8098, entitled “An Act Granting
Broadcast Enterprises and Affiliated Media (BEAM), Inc., a Eranchise 10
Establish, Construct. Operate and Maintain Commercial Radio and Television
Broadcast Stations Including Cable Television Systems in the Philippines:”

xxvi. Section 8 of Republic Act No. 8099, entitled “An Act Granting A
Franchise to Sagay Broadcasting Corporation (SBC) to Construct, Operate and
Maintain Stations For Radio and ‘Television In the Philippines and for Other
Purpo

: Section 7 of Republic Act No. 8102. entitled “An Act Granting the
Ultimate Entertainment, Inc., a Franchise to Construct, Install, Maintain And
Operate Radio Broadcasting Stations Within the Philippines:”

ASviii, Section 8 of Republic Act No. $116, entitled “An Act Granting the
Vimcontu Broadvasting Corporation A Franchise to Construct, Install, Operate
and Maintain Radio and ‘¢lovision Broadcasting Stations, Within the
Philippines and for Other Purposes:

ASIN. Section & of Republic Act No. 8119, entitled “An Act Granting, the
Good News Sors ion, Inc., A Franchise to Construct, Install,
Operate and Maintain for Religious, Educational and Commercial Purposes,
and Television Broadcasting, Stations Within The Philippines and for

AX, Section 5 of Republic Act No, 8120, entitled “An Act Granting ‘The
Andres Bonifacio College Broadcasting System. Inc,. a Franchise to Construct,
Maintain and Operate Radio Broadcasting Stations and Stations for Television
in The Islnd Of Mindanao for Educational, Cultural, and Commercial
Purposes:

Section 8 of Republic Act No. 8121, entitled ~An Act Granting the
M.S. Network Management, Inc. a Franchise to Construct, Install, Operate and



Maintain for Commercial Purposes, Radio Broadcasting Stations in the
Philippines and for Other Purposes:”

xxvii, Section 7 of Republic Act No. 8123. entitled “An Act Granting the
Royal Broadcasting Corporation. a Franchise to Construct, Operate and
Maintain for Commercial Purposes, Radio and ‘Television Broadcasting
Stations in the Philippines and for Other Purposes:”

xxiii, Seotion 8 of Republic Act No. 8128, entitled “An Act Granting a
Franchise to the Oriental Mindoro Management Resources Corporation
(OMARCO) to Construct. Install, Establish, Operate, Manage and Maintain a
Network Of Radio and Telovision Stations Anywhere in the Philippines, and for
Other Purposes:

xsxiv. Section 8 of Republic Act No. 8132, entitled “An Act Granting Jose
M, Luison And Sons, Inc., a Franchise to Construct, Install, Operate and
Maintain for Commercial Purposes Radio and Television Broadcasting
Stations in the Philippine:

xasv. Section 7 of Republic Act No. 8144, entitled “An Act Granting the
Azimuth Broadcasting Corporation a Franchise (0 Construct, Operate and
Maintain for Commercial Purposes Radio and Television Broadcasting
Stations in the Philippines.”

Xxxvi. Section 8 of Republic Act No. 8145, entitled “An Act Granting the
Radvo Pilipino Corporation A Franchise To Construct, Install Operate And
Maintain Commercial Radio And Television Broadcasting Stations, Satellite
And Cable Stations In the Philippines:

xxxvii. Section L4 of Republic Act No. 8147, entitled “An Act Granting the
Southern Broadcasting Network a Franchise to Construct, Maintain, Establish
and Operate Commercial Radio/Television Broadcasting Stations, in the
Philippines;

XXAvili, Section 8 of Republic Act No. 8149, cntilled “An Act Granting
theTaghilaran Broadcasting System a Franchise to Construct, Install, Operate
and Maintain Radio and ‘Lelevision Broadcasting Stations, in theVisayas
Region, and for Other Purposes:

xxxix. Seclion 8 of Republic Act No. 8154, entitled “An Act Granting Prime
Broadcasting Network, Incorporated. a Franchise to Construct, Operate and
Maintain Stations for Radio and Television in thePhilippines;”

xl Section 4 of Republic Act No, $158, entitled “An Act Extending the
Franchise Granted to Jorge D. Bayona Under Republic Act Numbered Filiy-
Seven Hundred Eighty-Nine, Assigning it in Favor of Pon Broadcasting
Network Inc., and Renewing the Term thereof for another Twenty-Five (25)
‘Years from the Date of the Fffectivity of this Act;”



8169, entitled “An Act Granting Gv
Broadcasting System, Inc., a Franchise to Construct, Install, Maintain and
Operate for Commercial Purposes Radio Broadcasting Stations in the Island of
Luzon and for Other Purposes;”

slit, tion 5 of Republic Act No. 10926, entitled “An Act Extendingfor
Twenty-Five (25) Years the Franchise Granted to Smart Communications,
Inc., (Formerly Smart Information Lechnologics, Inc.) Amending for the
Purpose Republic Act No. 7294, entitled *An Act Granting Smarl Information
Technologies Inc. (SMARL) a Franchise to Establish, Maintain, Lease And
Operate Integrated Telecommunications‘Computer'Electronic Services, and
Stations throughout the Philippines for Public Domestic and International
Telecommunications, and for Other Purposes;”

sliii, Section 9 of Republic Act No. 9511, entitled “An Act Granting the
National Grid Corporation of the Philippines a Franchise to Engage in the
Business of Conveying or Transmitting Flectricity Through High Voltage
Backbone Systems of Interconnected Iransmission Lines, Substations and
Related Facilities.”

sliv. Section 9 of Republic Act No. 7953, entitled “An Act Amending Ra
6632. Entitled “An Act Granting the Philippine Racing Act, Inc., a Franchise
to Operate And Maintain a Race Track for Horse Racing in the Province of
Rizal, and Extending thesaid Franchise by 25 Years from theExpiration of the
Term thereof;

xlv, Section 12 of Republic Act No. 8407, entitled “an act amending ra
6631, entitled “An Act Granting Mimila Jockey Club, Inc., a Franchise to
Construct, Operate and Maintain a Race ‘Track for Horse Racing in the City of
Manila or any Place within the Provinces Of Bulacan, Cavite or Rizal and
Extending the Said Franchise by 25 Years from the Expiration of the Term
Thercof!”

xlvi. Section 9 of Republic Act No. 8298, entitled “An Act Amending
Republic Act Numbered Seventy-Nine Hundred Seventy-Kight, Entitled “An
Act Granting the Metro Manila Turf Club, Inc., a Franchise to Construct,
Operate and Maintain a Racetrack for Horse Racing in the City of Kalookan;”
and

alvii, Section 12 of Republic Act No. 8446, entitled “An Act Granting the
Fil-Asia Raving Club a Franchise to Construct, Operate And Maintain a
Racetrack for Horse Racing in Rizal or Tarlac, or Pampanga or Batangasor
Quezon City

xt

ii. Section 9 of Republic Act Ne. 7399, entitled “An Act Granting the
Jiw Broadcasting, Corporation a Franchise to Install, Construct, Operate and
Maintain Commercial Radio Television Broadcasting Stations throughout the
Philippines.”



Mix. Section & of Republic Act No. 7295, entitled, “An Act Granting the
Bright Star Broadcasting Network Corporation a Franchise to Construct,
Install, Operate and Maintain for Commercial Purposes Radio and Television
Broadcasting Stations in the Philippines and for Other Purposes”

1, Scetion 8 of Republic Act No. 7530, entitled, “An Act Extending the
Franchise Granted to the Catholic Bishop’s Conlerence of the Philippines, Inc.
(Formerly the Catholic Welfare Organization to Constract. Operate and
Maintain Radio Broadcasting and Television Stations in the Philippines Under
Republic Act Numbered Fifty-One Hundred and Seventy-Two to Another
‘Twenty-Five (25) Years from August 4, 1992 and for Other Purposes”

i, Section 4 of Republic Act No. 7582, entitled “An Act Renewing the
Franchise Granted to the Consolidated Broadcasting Systems, Inc.. Previously
Known as the Audience, Incorporated, to Construct, Maintain and Operate
Radio Broadcasting and Television Stations in thy Philippines Under Republic
Act Numbered Thirty-Nine Hundred and Two, to another ‘Twenty-five (25)

Years from the date of Approval of this Act”

lii, Section 8 of Republic Act No. 7576, entitled “An Act Granting the
Cotabato Television Corporation a Franchise to Construct, Install, Operate and
Maintain for Commercial, Fducational and Cultural Purposes Radio and
Television Broadcasting Stations in the City of Cotabato and the Provinces of
‘Maguindanao, Sultan Kudarat and North Cotabato and for Other Purposes”

lili. Section 8 of Repul 7299, entitled “An Act Extending the
Franchise Granted to the Eagle Broadcasting Corporation to Establish, Operate
and Maintain Radio Broadcasting and Television Stations in the Philippines
Under Republic Act Numbered Forty-Nine Hundred and Sixteen to Another
Twenty
10773)

liv. Section 8 of Republic Act No. 7485, entitled “An Act Granting,
Filipinas Broadcasting Association, Inc. A Kranchise to Construct, Operate and
Maintain for Commercial Purposes Radio Broadcasting and ‘Lelevision
Stations in the Visayas and Mindanao and for Other Purposes”

lv. Scotion 14 of Republic Act No. 7372, entitled, “An Act Granting the
Isla Communications Co. A Franchise to Install, Operate and Maintain
‘Telecommunications Services Within the Lerritory of the Republic of the
Philippines and Intemational Points and For Other Purposes”

Ivi. Section 9 of Republic Act No. 7223, enlitled, “An Act Granting
Gateway U.LLD. Television Broadcasting Inc. a Franchise to Construct. Install,
Operate and Maintain for Commercial Purposes UHF Television Broadcasting
Stations in the Philippines, and for Other Purposes”

hii. Section 8 of Republic Act No. 8027 entitled “An Act Granting, a
Franchise to the Kaissar Broadcasting Network, Inc. (KBND, to Construct, Install,

38


Establish, Operate, Manage and Maintain a Network of Radio and Television
Stations Anywhere in the Philippines, and for Other Purposes”

Iviii. Section 8 of Republic Act No. 7303. entitled “An Act Granting the
Kalayaan Broadcasting System, Incorporated a Franchise to Construct, Install,
Operate and Maintain Radio Broadcasting Stations in the Island of Mindanao
and for Other Purposes”

Act Granting the
ig System, Inc., a Franchise to Construct, Install, Operate
(ing Stations in the Island of Luzon and for Other

Purposes”

Ix, Scotion 8 of Republic Act No, 7377, entitled “An Act Granting to the
Majlis Al Da'Wah Al Islamiah Fil-Philippines, Inc. a Franchise (o Establish,
Operate and Maintain Radio and Television Broadcasting Stations in
Mindanao”

Act No 7816, enlilled “An Act Granting the
Manila Broadcasting Company a Franchise 10 Construct, Install, Operate and
Maintain Radio and Television Broadcasting Stations Within the Philippines, and
for Other Purposes”

Ixii. Section 8 of Republic Act No. 7510, entitled “An Act Granting the
Masbate Community Broadcasting Co., Inc.. a Franchise to Construct, Install,
Operate and Mainiain Radio and ‘Television Broadcasting Stations in the
Islands of Masbate and Romblon and the whole of the Visayas, and for Other
Purpo:

Isifi. Section 8 of Republic Act No. 7477, entitled “An Act Granting the
Peopk’s Broadcasting Service. Inc., a Franchise to Construct, Install, Operate
and Maintain for Commercial Purposes Radio Broadcasting and Television
Stations in the Philippines and for Other Purposes”

Isiv. Section 8 of Republic Act No. 7163, entitled “An Act Granting the
Progressive Broadcasting Corporation a Franchise to Construct, Install,
Operate and Maintain for Commercial Purposes Radio Broadcasting Stations
and Television Stations in Metro Manila and in Regions I, VL, and VIL and for
Other Purposes”

Ixv. Section 8 of Republic Act No 8032. entitled “An Act Granting the
Philippine Radio Corporation a Franchise to Construct, Install, Establish, Operate
and Maintain Commercial Radio Stations in the Philippines”

Ixvi. Section 8 of Republic Act No. 7635, entitled “An Act Granting Radio
Sorsogon Network, Inc. a Franchise 0 Construct, Install, Operate and
Maintain Radio‘television Broadcasting Stations Within the Bicol Region and

For Other Purposes



Ixvii. Section 8 of Republic Act No 7158, entitled “An Act Granting the
Rinconada Broadcasting Corporation a Franchise to Consiruct, Install, Operate
and Maintain for Commercial Purposes Radio Broadcasling Stations and
Yelevision Stations in the Philippines and For Other Purposes”

Ixviii, Section 8 of Republic Act No. 7397, entitled “An Act Granting SBS
Radio Network, Inc. a Franchise to Construct, Install, Operate and Maintain
Radio Broadcasting Stations in the Philippines and for Other Purposes”

Isix. Seotion & of Republic Act No. 7579, entitled “An Act Granting the
Radio Verilas-Global Broadcasting System, Incorporated. a Franchise to
Construct, Install, Operate and Maintain for Religious, Educational, Cultural
and Commercial Purposes Radio and Television Broadcasting Stations in the
Philippines, and for Other Purposes”

Inx. Section 8 of Republic Act No. 7580, entitled “An Act Granting the
South Cotabato Communications Corporation a Franchise to Construct, Install,
Operate and Maintain Radio and Television Broadcasting Stations Within the
Province of South Cotabato”

Ixsi, Section 8 of Republic Act No. 7511, entitled “An Act Granting the
Subic Broadcasting Corporation a Franchise to Construct, Install, Operate and
Maintain Radio and ‘Lelevision Broadcasting Stations in the Philippines and
for Other Purposes”

Ixxii

n 8 of Republic Act No 8122, entitled “An Act Granting the
Swara Sug Media Corporation of the Philippines A Franchise to Construct,
Install, Operate and Maintain For Commercial Purposes Radio and Television
Broadcasting Stations in the Philippines and for Other Purposes”

Is: Section 9 of Republic Act No. 7529, entitled “An Act Ciranting
guard Radio Network Company, Inc. a Franchise to Construct, Install,
Operate and Maintain radio and Television Broadcasting Stations in the Island

of Luzon and for Cher Purposes”

Ixxiv. Scction 11 of Republic Act No, 7633 entitled. “An Act Amending,
Certain Sections of Republic Act No. 3259, As Amended, Entitled “An Act
Granting the International Communications Corporation A Franchise to
Establish Radio Stations, for Domestic Telecommunications, Radiophone,”
Extending the ‘erm of the Franchise by Twenty-Five (25) Years from August
9, 1996 As Provided in Republic Act No. 4905, and for Other Purposes”

xxv. Section 8 of Republic Act No. 7634, entitled “An Act Authorizing the
Transfer and Assignment to the Bohol Chionicle Radio Corporation of the
Fran to Construcl, Operate and Maintain Television and Radio
Broadcasting Stations in the Province of Bohol granted under Republic Act
Numbered Forty-Seven Hundred and Ninety-Two to Zoilo Dejaresco, Jr., and
all the Properties and Rights Acquired Thervunder of Zoilo Dejareso, Jr. and

60


Renewing the terms of the Said Franchise to Another ‘Ll wenty-Five (25) Years
from the Date of Effectivity of this Act”

Ixavi. Section 9 of Republic Act No. 7398. entitled “An Act Granting the
Corona International, Inc. a Franchise to Establish, Install, Maintain, Lease
and Operate Wire andor Wireless Telecommunications Systems, Lines,
Circuits and Stations ‘!hroughout the Philippines for Public Domestic and
International Communications, and for Other Purposes”

Ixxvii. Section 7 of Republic Act No, 2308, entitled “An Act Granting
Evangelista and Company a Eranchisc to Install, Operate and Maintain a
Telephone System in the Municipality of Angeles, Province of Pampanga”

Ixxvili. Section 3 of Republic Act No. 7229, entitled “An Act Approving the
‘Merger Between Globe Mackay Cable and Radio Corporation and Clavecilla
Radio System and the Consequent Transfer of the Franchise of Clavecilla Radio
System Granted Under Republic Act No. 402, As Amended to Globe Mackay
Cable and Radio Corporation, Extending the Life of Said Franchise, And
Repealing Certain Sections of Republic Act No. 402, As Amended”

Ixxix. Section 10 of Republic Act No. 10972, entitled “An Act Renewing for
Another Twenty-Five (25) Years the Franchise Granted to Infocom Communications
‘Network, Inc. (Presently Known as Now Telecom Company, Inc.) Under Republic
Act No, 7301, Fntitled “An Act Granting Infocom Communications Network, Ine.
AND, a Franchise to Construct, Fstablish, Operate and Mainlain Mobile Radio
ich as Radio, Paging Systems, Cellular Phone Systems, Personal

Communication Network (PCN), and ‘Trunked Radio Systems Within and Without

ve (25) Years, and for Other Purposes”, as

the Philippines lor a Period of Twenty
Amended by Republic Act No. 7940

Ixnx. Section 3 of Republic Act No. 4555, ontilled “An Act Further
Amending, Republic Act Numbered Two Thousand and Forty-Four, Entitled
“An Act Granting Joseph De Castro a Franchise to Construct, Install, Maintain
and Operate Radiotelegraph andior Radiotelephone Stations in Manila, Legaspi.
Tacloban, Davao, Zamboanga and Cagayan De Oro"

xxxi, Section 9 of Republic Act No, 7298, entitled “An Act Granting to
Omuinet Philippines, Inc, a Franchise to Establish, Install, Maintain, Lease and
Operate Wire and/or Wircless Tclecommunication Systems, [ines Circuits
and Slations Within and Without the Philippines and for Other Purposes”

Ixxsii, Section 12 of Republic Act No. 7082, entitled “An Act Fusther
Amending Act No. 3436, as amended, entilled “An Act Granting to the
Philippine Iong Distance Telephone Company a Franchise to Install. Operate
and Maintain a Telephone System Throughout the Philippine Islands”
Consolidating the Terms and Conditions of the Franchise Granted to the
Philippine Long Distance Telephone Company, and Extending the Said
Kranchise by ‘Twenty-Five (25) Years liom the Expiration of the Terms Thereof
as Provided in Republic Act No. 6146”

a1


Ixsxiii, Section 6 of Presidential Decree No, 947, entitled “Presidential Decree
Granting the Domestic Satellite Philippines, Incorporated a Franchise 10
Telecommunication Services through the Use of Satellites, ‘Velecommunications
(Radio, ‘Telegraph, Velephone and Television Systems), Lines, Circuits, Wire
and/or Wireless to Serve all those Needing Such Service on Land, at Sea and In
the Air”

Iexxiv. Section 10 of Republic Act No. 7674, enlitled, “An Act Amending
Section 9 of Republic Act No. 7617 Otherwise Known as “An Act Granting to
the Lelecommunications Technologies Philippines, Incorporated, a Franchise to
Install, Operate and Maintain Velecommunications Systems Throughout the
Philippines and for Other Purposes”

Ixsxv, Section 3 of Republic Act No. 7396, entitled “An Act Renewing the
Franchise Granted to the Universal Telecommunications Service. Incorporated
to Fstablish, Operate and Maintain Radio Stations for International and
Domestic Telecommunications Under Republi¢ Act No. 3246, as Amended by
Republic Act No. 4546, to Another Twenty-Five (25) Years from the Date of
the Fffectivity of this Act”

Isxxvi._ Section 8 of Republic Act No. 8153, entitled “An Act Granting the Rex
Electronics Communications System, Inc. a Franchise to Construct, Operate and
Maintain Public Radiotelephone and Radiotelegraph Stations for the Reception and
Transmission of Radiotelephone and Radiotelegraph Communications Within the
Philippines”

Ixxxvii. Section 6 of Republic Act No. 7293, entitled “An Act Further
Amending Republic Act Numbered Six ‘Ihousand Thirty, As Amended by
Republic Act Numbored Six Thousand Fi One, entitled

Act Granting the Pilipino ‘lelephone Corporation a Franchise to Install, Operate
and Maintain Telephone Systems in Certain Areas 'hrougout the Philippines,”
Extending the Term of its Franchise to Another Twenty-Five Years From the
Date of its Expiration, and for Other Purposes”

Sec. 39. Repealing Clavses. — A. ‘The provisions of the following Taws, INCLUDING
THE TAX INCENTIVES. that are inconsistent with this Act are hereby repealed:

i. Section 37 of Republic Act No. 6848, entitled “An Act Providing For
the 1989 Charler Of the A-Amanah Islamic Investment Bank of
thePhilippines, Authorizing its Conduct of Islamic Banking Business, and
Repealing for this Purpose Presidential Decree Numbered Two Hundred And
Sixty-Four as Amended by Presidential Decree Numbered Five Hundred and
Forty- I wo;”

ii Section 17 of Republic Act No. 7906, entitled “An Act Providing for
the Regulation of the Organization and Operations of Thrift Banks, and for
Other Purposes,”

62


tion 13 of Republic Act No. 7353, entitled “An Act Providing for
the Creation, Organization and Operation of Rural Banks, and for Other
Purposes;

iv. Esecutive Order No. 226, series of 1987, entitled “the Omnibus
Investments Code of 1987;~

vy. Section 1 of Republic Act No. 7918, ontitled “An Act Amending
Article 39, Title Mlof Executive Order No. 226, Otherwise Known as
theOmnibus Investments Code Of 1987, As Amended, and fer Other
Purposes;

vi. Articles 62, 63, 64, 65, 66, 67 and 69 of Republic Act No. 8756,
entitled “An Act Providing for the Terms, Conditions and Licensing
Requirements of Regional or Arca Headquarters, Regional Cperating
Headquarters, Regional Warehouses of Multinational Companivs Amending
for the Purpose Certain Provisions of Executive Order No. 226, Otherwise
Known as the Omnibus Investment Code Of 1987-"

vii, Executive Order No, 22 series of 2017 amending EO 70 series of 2012
528, series of 2006 and 313, series of 2004, entitled “Reducing the Rates of
Duty on Capital Equipment, Spare Paris and Accessories Imported by Boi-
Registered New and Expanding Enterpr

viii, Section 12 of Republic Act No. 8047, entitled “An Act Providing For
the Development of the Book Publishing Industry through the Formulation and
Amplementation of a National Book Policy and a National Book Development
Plan”

ix. Section 17 (1) to (8) in so far as tax exemption and/or VA zero rating
on domestic merchandise is concerned, and Section 18 (a), (b), (c) and (B) of
Presidential Decree No. 66, entitled “Creating the Export Processing Zone
Authority and Revising Republic Act No. 5490;"

x Section 4 (¢) and (f), in so far as tax exemption and/or VAT zero rating
on domestic merchandise is concemed, of Republic Act No. 7903, entitled
An Act Creating Special Economic Zone and Freeport in the City Of
Zamboanga and Establishing for this Purpose the Zamboanga City Spscial
Fconomic Zone Authority, Appropriating Funds Therefor, and for Other
Purposes;”

xi, Section 4 (b) (¢), int so far as tax exemption and/or VAT zero rating on
domesti¢ merchandise is concerned, of Republic Act No. 7922, entitled
An Act Establishing a Special Economic Zone and Treeport in the
Municipality of Santa Ana and the Neighboring Islands in the Municipality of
Aparri, Province of Cagayan Providing Funds Therefor. and for other
Purposes;”



xi, S
Republic
of 1995;

ion 4 of Republic Act No, 8748. entitled “An Act Amending
ct No. 7916, otherwise Known as the Special Economic Zone Act

xiii. Sections 23 and 24 of Republic Act No. 7916, emlitkhd “An Act
Providing for the Legal Framework and Mechanisms for the Creation,
Operation, Administration, and Coordination of Special Economic Zones in
the Philippines, Creating for the Purpose the Philippine Kconomic Zone
Authority (PEZA), and for Other Purposes;

xiv. Section 12 (b), in so far as tax exemption and VAT zero rating of
domestic merchandise and capital vquipment are concerned, and Section 15, in
so far as tax and duty incentives are concemed, of Republic Act No. 7227.
entitled “The Basos Conversion and Development Act of 1982, and for other
Purposes,” as amended by Republic Act No, 9400;

AV. Section 1 of Executive Order No. 619, entitled *Creating and
Designating Special Fconomic Zones Pursuant to Republic Act No. 7916,
amended by Republic Act No. 8784, in relation to Republic Act No. 7227, as
amended by Republic Act No. 9400, inside the Clark Freeport Zone:”

xvi. Sections 5, 6, 7, 8 and 9 of Republic Act No. 9490, entitled “An Act
Establishing the Aurora Special Economic Zone in the Province of Aurora.
Creating for the Purpose the Aurora Special Economic Zone Authority,
Appropriating Funds Therefor and for Other Purposes: Sections 3 (e) (f) (h)
and 4 of R.A. No. 10083, entitled “An Act Amending Republic Act No.
9490."

xvii, Section 4 (f), in so far as tax exemption and/or Value Added ‘Tax or
VAY zero rating on domestic merchandise and capital equipment are
concerned, and Sections 5, 6 and 10 of Republic Act No. 9728, entitled “An
Act Converting the Bataan Economic Zone Located in the Municipality of
Mariveles, Province of Bataan, into the Freeport Area of Bataan (Fab),
Creating for this Purpose the Authority of the Freeport Arca of Bataan
(AFAB). Appropriating Funds Therefor and for Other Purpose:

xviii, Sections 36 (c) and (() of Presidential Decree No. 705, entitled
“Revising PD No. 389, otherwise known as the Forestry Reform Code of the
Philippines.”

xix, Section (b) (1) (c) of Republic Act No, 9003, entitled “An Act
Providing for an Ecological Solid Waste Management Program, Creating the
Necessary Institutional Mechanisms and Incentives, Declaring Certain Acts
Prohibited and Providing Penalties, Appropriating Funds ‘Therefor and for
Other Purposes:

xx. Section 26 a (1) (3) of Republic Act No. 9275, entitled “An Act
Providing for Comprehensive Water Quality Management and for Other
Purposes:”

64


xxi. Sections 16 and 17 of Republic Act No, 7844, entitled “An Act to
Develop Exports as a Key Towards the Achievement of the National Goals
‘Towards the Year 2000;"

xxii. Section 13 of Republic Act No, 10817, entitled “An Act Instituting the
Philippine Halal Export Development and Promotion Program, Creating for
the Purpose the Philippine Halal Export Development and Promotion Board,
and for Other Purpos

xxiii, Section 14 of Republic Act No. 8423, entitled “An Act Creating the
Philippine Institute of Traditional and Alternative Health Care (PITAHC) To
Accelerate the Development of ‘I'raditional and Alternative Health Care in the
Philippin: Providing for a Traditional and Alternative Health Care
Development Fund and for other Purposes;”

xxiv. Section 20 (d) (1) ta (5) of Republic Act No. 10884, entitled “An Act

Strengthening the Balanced Housing Development Program, Amending F
the Purpose Republic Act No. 7279, as amended, Otherwise Known as the
Urban Development and Housing, Act of 1992;

xxv, Republic Act No. 7718, entilled “An Act Amending Certain Sections
of RA 6957. Entitled “An Act Authorizing the Financing, Construction,
Operation and Maintenance of Infrastructure Projects by the Private Sector.
and for Other Purposes.”

RXV. Svetion 6 (c) (4) () and Sections 7 and 8 of Republic Act No, 7103,
entitled “An Act to Strengthen the Iron and Sicel Industry and Promote
Philippine Industrialization and for Other Purposes;”

ic Act No. 8502, entitled “An Act
Manufacturing Industry, Providing

XSVii__ Section 3 (a) to (d) and (h) of Repul
to Promote the Development of the Jewel
Incentives Therefor and for Other Purposes:

xxviii. Section 5 (a) (by of Republic Act No. 10771, entitled “An Act
Promoting the Creation of Green Jobs, Granting Incentives and Appropriating
Funds ‘Therefor:”

xxix. Section 9 (h) (10) of Republic Act No. 9501. entitled “Promoting
Entreprencurship by Strengthening Development And Assistance Programs to
Micro, Small and Medium Scale Enterprises Amending RA 6977, otherwise
known as the Magna Carta For Small Enterptis

NNN. Section 7 of Republic Act No, 9178, entitked “An Act to Promote the
Fstablishment of Barangay Micro Business Enterprises (BMBES), Providing
Incentives and Benefits Therefor, and for Other Purpose:

sxai. Chapter XV, Section 83; Chapter XVI Sections 90, 91, 92. 93 of
Republic Act No. 7942, entitled ~An Act Instituling A New System of Minerat
Resources Exploration. Development, Utilization and Conservation,”

65


xxsii. Chapter HL, Section 4 and Chapter VII, Section 19 of Republic Act No.
9295, entitled “An Act Promoting the Development of Philippine Domestic
hipping, Shipbuilding, Ship Repair and Ship Breaking, Ordaining Reforms In
Goverwnent Policies Towards Shipping in the Philippines and for other

Purposes;”

XAviii. Section 6 of Republic Act No. 7471, as amended, entitled “An Act to
Promote the Development of Philippine Overseas Shipping:”

xsxiv. Sections 86, 88 and 95 (a) and (b) of Republic Act No, 9593, entitled
“An Act Declaring a National Policy for Tourism as an Engine of Investment,
Employment, Growth and National Development, and Strengthening the
Department of Tourism and its Attached Agencies to Effectively and
Efficiently Implement that Policy, and Appropriating Funds Therefor.”

xxxv._ Section 8, in so far as investment incentives are concerned, of Republic
Act No. 10816, entitled “An Act Providing for the Development and
Promotion of Farm Tourism in the Philippines:”

ion 8 of Presidential Deore 1491- Amending Section & of
Decree no. 538 (Philippine Veterans Investment Development

Pre
Corporation

lent

merchandise are concerned, and Section 9 of Presidential Decree No.
entitled ~Creati and Establishing the Phividec Industrial Authority and

AaxMiii, Section 1 (L.1) of Executive Order No. 97-A 5, 1993, entitled “Further
Clarifying the Tax and Duty-Frve Privilege within the Subic Special Foonomic
and Free Port Zone:

xxxix. Section 12(c) of Republic Act No. 7227. entitled “An Act Accelerating,
the Conversion of Military Reservations into Other Productive Uses. Creating
the Bases Conversion and Development Authority for this Purpose, Providing
Funds Therefor and for Other Purposes:”

xl. Sections 4(f) and (ck), in so far as tax exemption andor VAT zero
rating on domestic merchandise is concerned, and Section 12-b of Republic
Act No. 10083, entitled An Act Amending Republic Act No. 9496, otherwise
known as the Aurora Special Economie Zone Act Of 2007"

xli, Section
“Implemen

S (5.1) and (5.2) of Executive Order No. 290, entitled
the Natural Gas Vehicle Program for Public ‘Lransport:”

n Act

xlii, Sections 18 and 20 of Republic Act No. 6847. entitled ~
Creating and Establishing the Philippine Sports Commission, Defining Its

66


Powers, Functions, And Responsibilities, Appropriating Funds therefor, And
For Other Purposes;’

ion 42 (c) of Republic Act No. 7277, entitled “An Act Providing
For the Rehabilitation, Sclf-Development and Self-Reliance of Disabled
Persons and their Integration into the Mainstream of Society and for Other
Purposes,”

2 of Republic Act No. 9337, entitled “An Act Amending
, 28, 34. 106, 107, 108, 109, 110, 111, 1412, 113, 114, 146, 197,
119, 121, 148, 151, 236, 237 and 288 of the National Internal Revenue Code
of 1997, as Amended, sind for Other Purposes.

xlv, Scctions 1 (6) and 2 of Presidential Decree No. 776, entitled
“Repealing All Laws, Acts, Deorees, Orders and Ordinances Granting
Excmplions from Taxes, Duties, Fees, Imposts and Other Charges under
Certain Exceptions and Creating a Fiscal Incentives Board”

xlvi. Section 2 of Presidential Decree No. 1931, s. 1984, entitled “Directing
the Rationalization of Duty and Tax Exemption Privileges Granted to
Government-Owned or Controlled Corporations and All other Units of.
Government

xlvii. Section 1 (c), (d) Executive Order No. 93, scrics of 1986, entitled
Withdrawing All Tax and Duty Incentives, Subject to Certain Exceptions,

the Powers of the Fiscal Incentives Review Board and for other

Section 1 (a) and (b) of Presidential Decree No. 1955. entitled
Withdrawing, Subject to Certain Conditions, the Duty And Tas Privileges
Granted ‘Lo Private Business Enterprises and/or Persons Engaged In Any
Evonomie Activity And For Other Purposes”

slix. Section 5 of Republic Act No. 9379, entiled “An Act Defining
Handling Fishing, Providing Effective Regulations therefor and for Other

1. Section 16 of Republic Act No. 10601, entitled “An Act Promoting
ultural and Fisherics Mechanization Development in the Country Which
Grants Incentives to Local Manufacturers and Assemblers of Agri-Fisheries
Machinery Pursuant to EO 226":

i, Section 32 of Republic Act No. 10654, entitled “An Act to Prevent,
Deter and Eliminate legal, Unreported and Unregulated Fishing, Amending
Republic Act No. 8550, otherwise known as thePhilippine Fisheries Code of
1998, and for other purposes;

lid, Section 14 (b) of Republic Act No. 7308, entitled “An Act to Promote
and Develop the Sced Industry in the Philippines and Create a National Seed
Industry Council and for Other Purposes:”



lili, Section 18 of Republic Act No. 7884, entitled “An Act Crcaling the
National Dairy Authority to Accelerate the Development of the Dairy
Industry in the Philippines, Providing for a Dairy Development Fund, and for
Other Purposes;”

liv. Section 9 (¢), (0) (i), (i) Republic Act No. 7900, entitled “An Act t0
Promote the Production, Processing, Marketing, and Distribution of High
Value Crops, Providing Funds Therefor, and for Other Purposes:”

Iv. Chapter IT, article LL 35 (b), (¢) and (dl) of Republic Act No. 8550,
entitled “An Act Providing for the Development, Management and
Conservation of the Fisheries and Aquatic Resources, Integrating all Laws
Pertinent ‘hereto, and for Other Purposes

Ivi. Scotion 24 (a) (f) of Republic Act No. 10068, entitled “An Act
Providing for the Development and Promotion of Organic Agriculture in the
Philippines and for Other Purposes,”

vii, Sections 12, 21 and 22 of Presidential Decree No. 87 restored by FIRB
Resolution 19-87 Amending Presidential Decree 8 issued on October 2, 1972,
and Promulgating am Amended Act to promote the Disvovery and Production
of Indigenous Petroleum and Appropriate Funds Therefé

ili. Presidential Decree No. 529 (restored by FIRB Resolution 19-87),
entitled “Granting to Petroleum Exploration Concessionaires under the
Petroleum Act of 1949 Fxemption from Customs Duty and Compensating fax
‘on Importations of Machinery and Equipment, Spare Parts and Materials
Required for their Exploration Operations:

lix. Section 16 (a), (b) and (c) and section 17 (a) to (¢) of Presidential
Decree No, 972. entitled “Promulgating An Act To Promote An Accelerated
Exploration, Development, Exploitation, Production and Utilization OF Coal:”

Ix. Section 4 (a) of Presidential Decree No. 1442 restored by FIRB
resolution 19-87, entitled “An Act to Promote the Exploration and
Development of Geothermal Resources;

Ixi. Section 10 (1) to (6) of Republic Act No. 7156, entitled “An Act
Granting Incentives to Mini-Fiydro Electric Power Developers and For Other
Parpos

Ixii, Section 9 of Republic Act No. 8479. entitled “An Act Deregulating the
Downstream Oil Industry, and for Other Purposes:”

Isiii, Section 6, in so far as value added tax zero-rated sale of generated

power is concemed, of Republic Act No, 9136, entitled “An Act Ordaining
Reform in the Plectric Power Industry, Amending for the Purpose Certain
Laws and for other Purposes:”

68


Isiv. Chapter VIL, Section 15 except (h), Seotions 19, 21 (a) to (d), and 23 of
Republic Act No, 9513, entitled “An Act Promoting the Development.
Utilization and Commercialization of Renewable Energy Resources and for
other Purposes;

Ixy. Section 6 (a) (b) of Republic Act No. 9367, entitled “An Act to Dircet
the Use of Biofuels, Establishing for this Purpose the Biofuel Prosram,
Appropriating Funds therefore, and for Other Purposes;”

Ixvi, Section 10 of Presidential Decree No. 972 or the “Coal Development
Act Of 1976,” as Amended by Presidential Decree No. 1174;

Invi. Section 23 of Republic Act No. 7925, entitled “An Act to Promote and
Gover the Development of Philippine ‘felecommunications and Delivery of
Public Telecommunications Services;”

B. Memorandum Order No, 23, s. 1986, entitled “
Fiscal Incentives Review Board”,

Spanding the Membership of the

C. Ingeneral. All other laws. decrees, Executive Orders, rules and regulations, or
parts thereof which are contrary to or inconsistent with this Code are hereby repealed,
amended or modified accordingly.

SEC. 40. Sepuradtity Clause. If any clause. sentence, paragraph, or part of this
Code shall be adjudged by any Court of competent jurisdiction to be invalid, such judgment
shall not affvet. impair, of invalidate the remainder of said Code, but shall be confined in its
operation to the clause, sentence, paragraph, or part thereof directly involved in the
controversy.

SEC. 41, Lmplement

Rules and Regnlations. ~ Within thirty (30) days from the
effectivity of this Act, the Secrotary of Finance shall, upon the recommendation of the
Comm al Revenue and consultations with the Department of Trade and
Industry, promulgate the necessary rules and regulations for ils elfective implementation

SEC. 42. Hifectivity
complete publication in the ©

This Act shall take effect on January 1, 2020 following its
jal Gazette or in a newspaper of gencral circulation

Approved,

69