Senate

SEVENTEENTH CONGRESS OF THE} ©, ae
ice ofthe Mbecretarp

REPUBLIC OF THE PHILIPPINES }
Third Regular Session )

3B. No. 190

: —_ wine —

Introduced by SENATOR VICENTE C. SOTTO III

18 MG -2 P336

AN ACT
REFORMING THE CORPORATE INCOME TAX AND INCENTIVES
AMENDING FOR THE PURPOSE SECTIONS 5, 6, 20, 22, 25, 27, 28, 34,
40, 50, 73, 112, 119, 204, 220, 222, 237, 237-A, 250, 255, 256, 257,
258, 260, 261, 262, 263, 264, 265, 266, AND 275 OF THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED, CREATING
THEREIN NEW TITLES XII AND XIII, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

In January 2018, the government implemented Tax Reform for
Acceleration and Inclusion (TRAIN) package 1, which after six months of
enforcement, has gained the government the rightful budget to finance,
among others, its social mitigation program for the poor, the free education
program and to start the initial phase of build, build, build program of the
Duterte administration. While the effectiveness of TRAIN 1 is creditable, the
rising price of basic commodities, power and food, which are utilized by the
majority of the population belonging to the lower strata of the society, have

been wrongly blamed to the effect of TRAIN 1

It is quite unfortunate that the targeted 3.7% inflation rate set by the
Department of Finance ballooned to 5.2%. The offshoot, however, of the
targeted effects of TRAIN 1 to our inflation have been caused by other
external factors not related to it. These include, among others, the increase
on world oil prices that jumped from $53.7 per barrel in the start of this
year to a high of $75.16 per barrel in June 2018. The increase in US interest
rates that led to peso depreciation against the US dollar from P49.74 in

January to P53.05 in June 2018. There are other contributory factors that



affect the rising prices, like increase in the price of rice imports and other
uncontrollable factors pushed by market forces. This untimely economic
phenomenon brought about misconception that the TRAIN 1 brought to the
continuing rising of prices, where in fact, the tax reform, in quantifiable
term, only contributed 0.4 out of the 5.2% of the inflation rate that is

hurting our citizens.

The 915,000 registered corporations have become the partner of the
government to utilize them as its prime agents to collect revenues through
taxes. These include indirect tax like the value added tax (VAT), personal
income tax, from the millions of employees, and such other taxes being
withheld by corporation owners. While the purpose of the corporate income
tax (CIT) imposed provides revenue for the government, a way of
redistributing wealth and a way to regulate the corporations’ operations to
reinforce the political relevance of CIT, it is about time that the government
lowers the corporate income tax from the current 30% to 25%, while
expanding the tax base by repealing 123 special laws on investment tax
incentives and consolidate into a single omnibus incentives provided in this
bill, and through the repeal of the National Internal Revenue Code
exemptions of government-owned and controlled corporations (GOCCs),
proprietary educational institutions and hospitals, regional or area
headquarters (RHQs), regional operating headquarters (ROHQs), income of
resident foreign corporation from foreign currency transactions, nonresident
cinematographic film owner, lessor or distributor and owner or lessor of

vessels, aircraft, machineries and other equipment.

Moreover, through this bill, the existing investment tax incentives
shall not be removed, but it will be rationalized. For the past two (2) to three
(3) decades, there are 654 firms enjoying incentives from the government.
Thus, it is high time to have a tax incentives system that is performance-
based, targeted, transparent and time-bound in order to ensure that the
Filipino people will gain from every peso that the government gives to the

firms registered in the investment promotion agencies (IPAs). Also, this



measure being proposed will simplify the tax system to avoid tax evasion,

and providing higher penalties to tax violations offenders.

Considering that this is a revenue neutral tax measure, it will not
have any inflationary effects but it may one way or another provide support
to some 90,000 plus SMSEs to be covered by this Act.

I therefore urge my colleagues to support the urgent passage of this
important measure.

dere on

ENTE C. SO’ Tl



igs) = Senate
SEVENTEENTH CONGRESS OF THE ) Se Otic ol le Deccerary
REPUBLIC OF THE PHILIPPINES )
Third Regular Session ) 18 AUG -2 P3336
SENATE a é
S.B.No.___1906 ~ff-—

Introduced by SENATOR VICENTE C. SOTTO III

AN ACT
REFORMING THE CORPORATE INCOME TAX AND
INCENTIVES AMENDING FOR THE PURPOSE SECTIONS 5, 6,
20, 22, 25, 27, 28, 34, 40, 50, 73, 112, 119, 204, 220, 222, 237, 237-A,
250, 255, 256, 257, 258, 260, 261, 262, 263, 264, 265, 266, AND 275 OF
THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED,
CREATING THEREIN NEW TITLES XII AND XIII,
AND FOR OTHER PURPOSES

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

SECTION 1. Title. — This Act shall be known as the “Corporate Income
Tax and Incentives Reform Act.”

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the
State to develop the national economy towards global competitiveness by
implementing tax policies instrumental in attracting investments, which
will result in productivity enhancement, employment generation,
countrywide development, and a more inclusive economic growth, while at
the same time maintaining fiscal prudence and stability.

To achieve these objectives, the State shall:

(a) Enhance the progressivity of the tax system and improve the
equity and efficiency of the corporate tax system by lowering the



1 rate, widening the tax base, and reducing tax distortions and
leakages; and

3 (b) Develop a more market-responsive and globally-competitive tax
4 and investment incentives regime that is performance-based,
5 targeted, time-bound, and transparent.

6 SEC. 3. Section 5 of the National Internal Revenue Code of 1997, as
amended (NIRC) is hereby amended to insert thereafter a new section 5-A
8 to read as follows:

9 SEC. 5-A. — POWER OF THE COMMISSIONER TO
0 ISSUE SUBPOENA DUCES TECUM; HOW SERVICE OF
u SUBPOENA DUCES TECUM IS MADE. — PURSUANT
r TO SECTION 5 OF THIS CODE, IN CASE THE
3 INFORMATION OR RECORDS REQUESTED ARE
4 NOT FURNISHED WITHIN THE PERIOD
15, PRESCRIBED IN THE WRITTEN NOTICE, OR WHEN
16 THE INFORMATION OR RECORDS SUBMITTED
7 ARE INCOMPLETE, THE COMMISSIONER IS
18 AUTHORIZED TO ISSUE A SUBPOENA DUCES
1% TECUM WHICH MUST SPECIFY WITH
REASONABLE DESCRIPTION THE BOOKS,
DOCUMENTS, OR THINGS REQUESTED, STATING
THEREIN THEIR RELEVANCE OR MATERIALITY
TO THE INQUIRY AND IDENTIFYING THE
24 TAXPAYER OR THIRD PARTY/OFFICE — IN
25 POSSESSION, CUSTODY OR CONTROL OF THE
6 SAME.

THE SUBPOENA DUCES TECUM SHALL BE SERVED
8 BY THE REVENUE OFFICER ASSIGNED TO
29 INVESTIGATE THE CASE OR BY ANY OTHER
30 INTERNAL REVENUE OFFICER AUTHORIZED FOR
THE PURPOSE.

32 WHENEVER PRACTICABLE, THE SUBPOENA
33 DUCES TECUM SHALL BE SERVED THROUGH
34 PERSONAL SERVICE. IF, FOR JUSTIFIABLE
35 CAUSES, THE TAXPAYER CANNOT BE SERVED
36 WITHIN A REASONABLE TIME THROUGH



PERSONAL SERVICE, THE SUBPOENA DUCES
TECUM MAY BE SERVED BY SUBSTITUTED
SERVICE IN ACCORDANCE WITH THE RULES OF
COURT.

SEC. 4.

Section 6 of the NIRC is hereby further amended to insert

thereafter a new section 6-A to read as follows:

SEC. 6-A. SERVICE OF LETTER OF AUTHORITY,
ASSESSMENT NOTICES, AND OTHER REQUIRED
NOTICES ISSUED BY THE BUREAU. — THE LETTER

OF

AUTHORITY, ASSESSMENT NOTICES, AND

OTHER REQUIRED NOTICES TO THE TAXPAYER
MAY BE SERVED BY THE COMMISSIONER OR HIS
DULY AUTHORIZED REPRESENTATIVE BY
DELIVERING PERSONALLY A COPY THEREOF TO
THE TAXPAYER’S REGISTERED ADDRESS OR
KNOWN ADDRESS, OR WHEREVER A TAXPAYER
MAY BE FOUND.

A KNOWN ADDRESS SHALL MEAN A PARTY’S
PLACE OF RESIDENCE OR A PLACE OTHER THAN

A

PARTY’S REGISTERED ADDRESS WHERE

BUSINESS ACTIVITIES ARE CONDUCTED.

IN

CASE PERSONAL SERVICE IS NOT

PRACTICABLE, THE LETTER OF AUTHORITY,
ASSESSMENT NOTICES, AND OTHER REQUIRED
NOTICES MAY BE SERVED BY SUBSTITUTED
SERVICE IN ACCORDANCE WITH THE RULES OF

COURT.
SEC. 5. Section 20 of the NIRC is hereby further amended to read as
follows:

SEC. 20. Submission of Report and Pertinent Information by

the Commissioner.

(A)

XXX



(B) SUBMISSION OF TAX-RELATED INFORMATION
TO THE DEPARTMENT OF FINANCE. THE
COMMISSIONER SHALL, UPON REQUEST OF THE
SECRETARY OF FINANCE SPECIFICALLY
IDENTIFYING THE NEEDED INFORMATION AND
JUSTIFICATION FOR SUCH REQUEST, FURNISH
THE SECRETARY PERTINENT TAX-RELATED
INFORMATION: PROVIDED, THAT WHEN SUCH
INFORMATION TENDS TO IDENTIFY, DIRECTLY
OR INDIRECTLY A PARTICULAR TAXPAYER, THE
SECRETARY AND THE RELEVANT OFFICERS
HANDLING THE INFORMATION SHALL BE
COVERED BY THE PROVISIONS OF SECTION 270
OF THIS CODE UNLESS THE TAXPAYER
CONSENTS IN WRITING TO SUCH DISCLOSURE.

{(B)] (C) Report to Oversight Committee. — xxx

SEC. 6. Section 22 of the NIRC is hereby amended to read as follows:

22. Definitions. - When used in this Title:

XXX

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

(JJ) THE TERM ‘EXPORT ENTERPRISE’? SHALL
MEAN A REGISTERED ENTERPRISE THAT IS A
MANUFACTURER, PROCESSOR, OR SERVICE
PROVIDER AND WHOSE EXPORT SALE OF ITS
PRODUCTS OR SERVICES IS AT LEAST NINETY
PERCENT (90%) OF ITS TOTAL ANNUAL
PRODUCTION OF THE PRECEDING TAXABLE
YEAR.



(KK) THE TERM ‘DOMESTIC ENTERPRISE’ SHALL
MEAN A_ REGISTERED ENTERPRISE THAT
PRODUCES GOODS FOR SALE OR RENDERS
SERVICES EXCLUSIVELY TO THE DOMESTIC
MARKET OR DOES NOT MEET THE MINIMUM
EXPORT REQUIREMENT OF AN EXPORT
ENTERPRISE.

(LL) THE TERM ‘EXPORT SALES OF GOODS’
SHALL MEAN THE SALES OF AN EXPORT
ENTERPRISE PAID FOR IN FREELY CONVERTIBLE
FOREIGN CURRENCY INWARDLY REMITTED TO
THE PHILIPPINES FROM THE FOLLOWING:

(1) THE SALE AND ACTUAL SHIPME
GOODS FROM THE PHILIPPINES
FOREIGN COUNTRY BY AN
ENTERPRISE;

(2) SALES TO DIPLOMATIC MISSIONS AND
INSTITUTIONS COVERED BY
INTERNATIONAL TREATY;

(3) SALES OF AN EXPORT ENTERPRISE TO.
INTERNATIONAL SEA OR AIR TRANSPORT
OPERATIONS OF GOODS, EQUIPMENT,
SPARE PARTS, AND SUPPLIES, EXCEPT FUEL,
FORMING PART OF DIRECT COSTS AND TO
BE USED IN THE AIRCRAFT OR SEACRAFT,
AND CAPITAL EQUIPMENT NEEDED FOR
SHIPPING OR AIR TRANSPORT OPERATION:

(MM)THE TERM ‘EXPORT SALES OF SERVICES’
SHALL MEAN THE SALES OF AN EXPORT
ENTERPRISE, PAID FOR IN FREELY CONVERTIBLE
FOREIGN CURRENCY INWARDLY REMITTED TO
THE PHILIPPINES FOR THE FOLLOWING:

(1) SERVICES RENDERED TO NON-
RESIDENT FOREIGN CLIENTS BY EXPORT
2 RPRISE



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

(3) SERVICES FOR THE OVERHAUL,
REPAIR, AND MAINTENANC
INTERNATIONAL SHIPPING, OR AIR
TRANSPORT OPERATIONS.

(NN) THE TERM ‘INVESTMENT PROMOTION
AGENCIES’ (IPAS) SHALL HAVE THE SAME
MEANING AS THAT UNDER REPUBLIC ACT NO.
10708, OR THE TAX INCENTIVES MANAGEMENT
AND TRANSPARENCY ACT (TIMTA).

(OO) THE TERM ‘REGISTERED ENTERPRISE’
SHALL MEAN ANY INDIVIDUAL, PARTNERSHIP,
CORPORATION, PHILIPPINE BRANCH OF A
FOREIGN CORPORATION, OR OTHER ENTITY
ORGANIZED AND EXISTING UNDER PHILIPPINE
LAWS AND REGISTERED WITH AN IPA. PROVIDED,
HOWEVER, THAT THE TERM "REGISTERED
ENTERPRISE” SHALL NOT INCLUDE ANY OF THE
FOLLOWING SERVICE ENTERPRISES SUCH AS,
BUT NOT LIMITED TO, THOSE ENGAGED IN
CUSTOMS BROKERAGE, TRUCKING OR
FORWARDING SERVICES, JANITORIAL SERVICES,
SECURITY SERVICES, INSURANCE, BANKING, AND
OTHER FINANCIAL SERVICES, CONSUMERS’
COOPERATIVES, CREDIT UNIONS, CONSULTANCY
SERVICES, RETAIL BUSINESS, RESTAURANTS, OR
SUCH OTHER SIMILAR SERVICES, AS MAY BE
DETERMINED BY THE IPA BOARD, IRRESPECTIVE
OF LOCATION, WHETHER INSIDE OR OUTSIDE
THE ZONES, DULY ACCREDITED AND/OR
LICENSED BY ANY OF THE IPAS AND WHOSE
INCOME DELIVERED WITHIN THE ECONOMIC
ZONES SHALL BE SUBJECT TO TAXES DER THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED.



(PP) THE TERM ‘SPECIAL ECONOMIC ZONE’ OR
‘ECOZONE’ SHALL REFER TO A SELECTED AREA
THAT IS HIGHLY DEVELOPED, OR WHICH HAS
THE POTENTIAL TO BE DEVELOPED INTO AGRO-
INDUSTRIAL, INDUSTRIAL, INFORMATION
TECHNOLOGY, TOURIST/RECREATIONAL, WHOSE
METES AND BOUNDS ARE FIXED OR DELIMITED
BY PRESIDENTIAL PROCLAMATION AND WITH
A SPECIFIC GEOGRAPHICAL AREA. AN ECOZ
MAY CONTAIN ANY OR ALL OF THE FOLLOWL
INDUSTRIAL ESTATES (IES), EXPORT PROCESSING
ZONES (EPZS), ICT PARKS AND CENTERS, AND
FREE TRADE ZONES: PROVIDED, THAT AREAS
WHERE MINID EXTRACTIONS ARE
UNDERTAKEN SHALL NOT BE DECLARED
ECOZONES: PROVIDED FURTHER, THAT THE
ECOZOD SHOULD COMPLY WITH’ THE
MINIMUM CONTIGUOUS LAND AREA TO BE
DETERMINED BY HE FISCAL INCENTIVES
REVIEW BOARD (FIRB).

(QQ) THE TERM ‘FREEPORT ZONE’ REFERS TO
AN ISOLATED AND POLICED AREA ADJACENT TO
A PORT OF ENTRY, WHICH SHALL BE OPERATED
AND MANAGED AS A_ SEPARATE CUSTOMS
TERRITORY TO ENSURE FREE FLOW OR
MOVEMENT OF GOODS, EXCEPT THOSE
EXPRESSLY PROHIBITED BY LAW, WITHIN, INTO,
AND EXPORTED OUT OF THE FREEPORT ZONE
WHERE IMPORTED GOODS MAY BE NLOADED
FOR IMMEDIATE TRANSSHIPMENT OR STORED,
REPACKED, SORTED, MIXED, OR OTHERWISE
MANIPULATED WITHOUT B! G SUBJECT TO
IMPORT DUTIES. HOWEVER, MOVEMENT OF
THESE IMPORTED GOODS FROM THE FREE-
TRADE AREA TO A NON-FREE TRADE AREA IN
THE COUNTRY SHALL BE SUBJECT TO ALL
APPLICABLE INTERNAL REVENUE TAXES AND
DUTIES.



(RR) THE TERM ‘TAX EXPENDITURES’ REFER TO
PROVISIONS OF LAW THAT GRANT RELIEF IN
THE FORM OF TAX SUBSIDIES OR TAX
INCENTIVES THAT REDUCE TAX REVENUES. FOR
PURPOSES OF LOWERING THE CORPORATE
INCOME TAX RATE, THE ESTIMATES OF TAX
EXPENDITURES SHALL INCLUDE ALL TAX
SUBSIDIES OR TAX INCENTIVES AVAILED OF BY
BUSINESS TAXPAYERS IN A PARTICULAR YEAR,
EXCEPT VAT, AS REPORTED BY THE DOF.

SEC. 7. Section 25 of the NIRC is amended to read as follows:

SEC. 25. Tax on Nonresident Alien Individual. —

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

XXX

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

XXX

[(C) Alien Individual Employed by Regional or Area
Headquarters and Regional Operating Headquarters of
Multinational Companies.- There 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, annuities, 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, That the same tax treatment
shall apply to Filipinos employed and occupying the same
position as those of aliens employed by these multinational
companies. For purposes of this Chapter, the term
‘multinational company’ means a foreign firm or entity



33

engaged in international trade with affiliates or subsidiaries or
branch offices in the Asia-Pacific Region and other foreign
markets.]

[(D) Alien Individual Employed by Offshore Banking Units. -
There 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 off-shore banking units, a tax equal to
fifteen percent (15%) of such gross income: Provided,
however, That the same tax treatment shall apply to Filipinos
employed and occupying the same positions as those of aliens
employed by these offshore banking units.|

[(E) Alien Individual Employed by Petroleum Service
Contractor and Subcontractor. - An Alien individual who is
a permanent resident of a foreign 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 fifteen 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 occupying
the same position as an alien employed by petroleum service
contractor and subcontractor.]

[Any income earned from all other sources within the
Philippines by the alien employees referred to under
Subsections (C), (D) and (E) hereof shall be subject to the
pertinent income tax, as the case may be, imposed under this
Code.|

SEC. 8. Section 27 of the NIRC is hereby amended to read:

SEC. 27. Rates of Income Tax on Domestic Corporations. —



3
4
6

(A) In General. — Except as otherwise provided in this
Code, an income tax of [thirty-five percent (35%)] TWENTY
FIVE PERCENT (25%) 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
Title 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, further, hat the President, upon the
recommendation of the Secretary of Finance, may effective
January 1, 2000, allow corporations the option to be taxed at
fifteen percent (15%) of gross income as defined herein, after
the following conditions have been satisfied:]

{(1) A tax effort ratio of twenty percent (20%) of Gross
National Product (GNP);]

[(2) A ratio of forty percent (40%) of income tax collection to
total tax 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 based on gross income shall be
available only to firms whose ratio of cost of sales to gross
sales or receipts from all sources does not exceed fifty-five
percent (55%).]

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

[For purposes of this Section, the term ‘gross income’ derived
from business shall be equivalent to gross sales less 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.]

10



[For a trading or merchandising concern, ‘cost of goods sold’
shall include the invoice cost of the goods sold, plus import
duties, freight in transporting the goods to the place where the
goods are actually sold, including insurance while the goods
are in transit.]

[For a manufacturing concern, ‘cost of goods manufactured
and sold’ shall include all costs of production of finished
goods, such as raw materials 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 receipts less sales returns, allowances
and discounts.

{(B) Proprietary Educational Institutions and Hospitals. —
Proprietary educational institutions and hospitals which are
nonprofit shall pay a tax of ten percent (10%) on their taxable
income except those covered by Subsection (D) hereof:
Provided, That if the gross income from unrelated trade,
business or other activity exceeds fifty percent (50%) of the
total gross income derived by such educational institutions or
hospitals from all sources, the tax prescribed in Subsection
(A) hereof shall be imposed on the entire taxable income. For
purposes of this Subsection, the term ‘unrelated trade,
business or other activity’ means any trade, business or other
activity, the conduct of which is not substantially related to
the exercise or performance by such educational institution or
hospital of its primary purpose or function. A ‘proprietary
educational institution’ is any private school maintained and
administered by private individuals or groups with an issued
permit to operate from the Department of Education, Culture
and Sports (DECS), 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.]

[(©)] (B) Government-owned or —Controlled Corporations,
Agencies or Instrumentalities. — The provisions of existing
special or general laws to the contrary notwithstanding, all



corporations, agencies, 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
(PHIC), [and the local water districts} shall pay such rate of
tax upon their taxable income as are imposed by this Section
upon corporations or associations engaged in a similar
business, industry, or activity.

[(D)] (C) xxx
((E)] (D) xxx

XXX

SEC. 9. Section 28 of the NIRC is hereby amended to read:

SEC. 28. Rates of Income Tax on Foreign Corporations. ~
(A) Tax on Resident Foreign Corporations. —

(1) In General. — Except as otherwise provided in this Code, a
corporation organized, authorized, or existing under the laws of
any foreign country, engaged in trade or business within the
Philippines, shall be subject to an income tax equivalent to
[thirty-five percent (35%)]| TWENTY FIVE PERCENT
(25%) of the taxable income derived in the preceding taxable
year from all sources within the Philippines: [Provided, That
effective January 1, 2009, the rate of income tax shall be thirty
percent (30%).]

XXX

[Provided, however, That a resident foreign corporation shall
be granted the option to be taxed at fifteen percent (15%) on
gross income under the same conditions, as provided in
Section 27 (A).]

(2) Minimum Corporate Income Tax on Resident Foreign
Corporations. — Xxx



(3) International Carrier. — xxx
(4) Offshore Banking Units. — xxx.

(5) Tax on Branch Profits Remittances. — Any profit
remitted by a branch to its head office shall be subject to a tax
of fifteen percent (15%) which shall be based on the total
profits applied or earmarked for remittance without any
deduction for the tax component thereof [(except those
activities which are registered with the Philippine Economic
Zone Authority]. xxx

[(6) Regional or Area Headquarters and Regional
Operating Headquarters of Multinational Companies. ~

(a) Regional or area headquarters as defined in Section 22
(DD) shall not be subject to income tax.

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

(| (© Tax on Certain Incomes Received by a Resident
Foreign Corporation. ~

(a) Interest from Deposits and Yield or any other Monetary
Benefit from Deposit Substitutes, Trust Funds and Similar
Arrangements and Royalties. — Interest from any currency
bank deposit and yield or any other monetary benefit from
deposit substitutes and from trust funds and similar
arrangements and royalties derived from sources within the
Philippines shall be subject to a final income tax at the rate of
twenty percent (20%) of such interest: Provided, however,
That interest income derived by a resident foreign corporation
from a depository bank under the expanded foreign currency
deposit system shall be subject to a final income tax at the rate
of [seven and one-half percent (7 1/2%)| FIFTEEN
PERCENT (15%) 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 Exchange. — A final tax at the rate[s prescribed
below] OF 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 xcept shares sold or
disposed of through the stock exchange[:].

[Not over P100,000 5%
On any amount in excess of P100,000 10%]

(4) Intercorporate Dividends. ~ xxx
(B) Tax on Nonresident Foreign Corporation.

(1) In General. — Except as otherwise provided in this
Code, a foreign corporation not engaged in trade or business
in the Philippines shall pay a tax equal to [thirty-five percent
(35%)| TWENTY FIVE PERCENT (25%) 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,
except capital gains subject to tax under subparagraph 5 (c):
[Provided, That effective January 1, 2009, the rate of income
tax shall be thirty percent (30%).]

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

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



[(4) Nonresident Owner or Lessor of Aircraft, Machineries
and Other Equipment. - 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)] (2) Tax on Certain Incomes Received by a Nonresident
Foreign Corporation. —

(a) Interest on Foreign Loans. ~ xxx

(b)  Intercorporate Dividends. — A final withholding tax at
the rate of fifteen percent (15%) is hereby imposed on the
amount of cash and/or property dividends received from a
domestic corporation, which shall be collected and paid as
provided in Section 57 (A) of this Code, subject to 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%),] TEN PERCENT (10%), which represents
the difference between the regular income tax of [thirty-five
percent (35%)]| TWENTY FIVE PERCENT (25%) and the
fifteen percent (15%) tax on dividends as provided in this
subparagraph; Provided, That effective [January 1, 2009]
JANUARY 1, 2019, the credit against the tax due shall be
equivalent to [fifteen percent (15%)] TEN PERCENT
(10%), which represents the difference between the regular
income tax of [thirty percent (30%)] TWENTY FIVE
PERCENT (25%) and the fifteen 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 rate[s prescribed
below] OF 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 5%



SEC.

On any amount in excess of P100,000 10%]
10. Section 34 of the NIRC is hereby amended to read:

SEC. 34, Deductions from Gross Income. ~ xxx
(A) Expenses.

(1) Ordinary and Necessary Trade, Business or Professional
Expenses.~ Xxx

[(2) Expenses Allowable to Private Educational Institutions. -
In addition to the expenses allowable as deductions under this
Chapter, a 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 outlays
of depreciable assets incurred during the taxable year for the
expansion of school facilities or (b) to deduct allowance for
depreciation thereof under Subsection (F) _ hereof.]
(B) Interest.

(1) In General. - The amount of interest paid or incurred
within a taxable year on indebtedness 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 [forty-two percent (42%)] THIRTY
THREE PERCENT (33%) of the interest income subjected
to final tax: [Provided, That effective January 1, 2009, the
percentage shall be thirty-three percent (33%).] PROVIDED
FINALLY, THAT THE FOLLOWING PERCENTAGES
SHALL APPLY IF THE CORPORATE INCOME TAX
RATE AS PROVIDED IN SECTIONS 27 (A) AND
28(A)(1) IS ADJUSTED AS FOLLOWS:

IF THE RATE IS 29%, INTEREST EXPENSE
REDUCTION RATE IS 31%;

IF THE RATE IS 28%, INTEREST EXPENSE
REDUCTION RATE IS 28%;

IF THE RATE IS 27%, INTEREST EXPENSE
REDUCTION RATE IS 25%;

16



IF THE RATE IS 26%, INTEREST EXPENSE
REDUCTION RATE IS 23%;

IF THE RATE IS 25%, INTEREST EXPENSE
REDUCTION RATE IS 20%.

XXX

(L) Optional Standard Deduction (OSD). - In lieu of the
deductions allowed under the preceding Subsections, an
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 (A)(1),
[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: Provided, That an individual who is
entitled to and claimed for the optional standard deduction
shall not be required to submit with his tax retum such
financial statements otherwise required under this Code:
Provided, further, That except when the Commissioner
otherwise 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 year, as may be required by the rules and regulations
promulgated by the Secretary of Finance, upon,
recommendation of the Commissioner.

XXX



SEC. 11. Section 40(C)(2) of the NIRC is hereby amended
to read

SEC. 40. Determination of Amount and Recognition of Gain
or Loss

Xxx
(C) Exchange of Property.
(1) General Rule. ~ xxx

(2) Exception. ~ No gain or loss shall be recognized [if]
TO A CORPORATION OR ON ITS STOCK OR
SECURITIES IF SUCH CORPORATION IS A PARTY
TO A REORGANIZATION AND EXCHANGES OF
PROPERTY in pursuance of a plan of [merger or
consolidation) REORGANIZATION SOLELY FOR
STOCK OR SECURITIES IN ANOTHER
CORPORATION THAT IS A PARTY TO THE
REORGANIZATION.

A REORGANIZATION IS DEFINED AS:

[(a) A. corporation, which is a party to a 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 stock of
another corporation also a party to the merger or
consolidation; or]

Kc) A security holder of a corporation, which is a party
to the merger or consolidation, exchanges his securities in
such corporation, solely for stock or securities in such
corporation, a party to the merger or consolidation.]

(A) A STATUTORY MERGER OR
CONSOLIDATION;



(B) 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
ACQUIRING CORPORATION), OF STOCK OF
ANOTHER CORPORATION IF, IMMEDIATELY
AFTER THE ACQUISITION, THE ACQUIRING
CORPORATION HAS CONTROL OF SUCH OTHER
CORPORATION (WHETHER OR NOT SUCH
ACQUIRING CORPORATION HAD CONTROL
IMMEDIATELY BEFORE THE ACQUISITION);

(C) 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
ACQUIRING CORPORATION), OR SUBSTANTIALLY
ALL OF THE PROPERTIES OF ANOTHER
CORPORATION, BUT IN DETERMINING WHETHER
THE EXCHANGE IS SOLELY FOR STOCK THE
ASSUMPTION BY THE ACQUIRING CORPORATION
OF A LIABILITY OF THE OTHER SHALL BE
DISREGARDED;

(D) A RECAPITALIZATION; OR

(E) A REINCORPORATION.

No gain or loss shall also be recognized if property is
transferred to a corporation by [a] ONE OR MORE personS
in exchange for stock [or unit of participation] 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 property.

IN ALL OF THE ABOVE INSTANCES,
TRANSACTION OR ARRANGEMENT
UNDERTAKEN FOR A LEGITIMATE OR BONA FIDE

19



BUSINESS PURPOSE AND NOT SOLELY FOR THE
PURPOSE OF AVOIDING OR ESCAPING THE
BURDEN OF TAXATION. IN CASES WHERE THE
TRANSACTION OR ARRANGEMENT ENTERED
INTO IS FOUND TO BE NOT FOR LEGITIMATE OR
BONA FIDE BUSINESS PURPOSE, THE PROVISION
OF SECTION 50 OF THIS CODE SHALL BE APPLIED
AND ENFORCED.

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

SEC. 12. Section 50 of the NIRC is hereby repealed and replaced by a
new Section to read as follows:

[SEC. 50. Allocation of Income and Deductions. 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 allocate 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 taxes or clearly to
reflect the income of any such organization, trade or
business.]

SEC. 50. AUTHORITY OF THE COMMISSIONER TO
DISTRIBUTE, APPORTION, ALLOCATE, AND IMPUTE
INCOME AND DEDUCTIONS TO DISREGARD AND
COUNTERACT TAX AVOIDANCE ARRANGEMENTS. —
IN 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,



ALLOCATE, OR IMPUTE INCOME OR DEDUCTIONS
BETWEEN OR AMONG SUCH ORGANIZATION,
TRADE OR BUSINE IF THE COMMISSIONER
DETERMINES = THAT SUCH DISTRIBUTION,
APPORTIONMENT, ALLOCATION, OR
IMPUTATION IS NECESSARY IN ORDER TO
PREVENT EVASION OF TAXES OR TO CLEARLY
REFLECT THE INCOME OF ANY SUCH
ORGANIZATION, TRADE, OR BUSINESS.

IN CASES WHEN A_ TRANSACTION OR
ARRANGEMENT, WHETHER ENTERED INT!
THE PERSON A’ CTED BY THE TRANSACTION
OR ARRANGEMENT OR BY ANOTHER PERSON,
THAT DIRECTLY OR INDIRECTLY HAS TAX
AVOIDANCE AS ITS PURPOSES OR’ EFFECTS,
WHETHER OR NOT ANY OTHER PURPOSE OR
EFFECT IS ATTRIBUTABLE AS TO ORDINARY
BUSINESS OR FAMILY DEALINGS, IF THE TAX
AVOIDANCE PURPOSE OR EFFECT IS NOT
MERELY INCIDENTAL, THE COMMISSIONER IS
AUTHORIZED TO DISREGARD AND CONSIDER
SUCH TRANSACTION OR ARRANGEMENT AS VOID
FOR INCOME TAX PURPOSES, AND MAY ADJUST
THE TAXABLE INCOME OF A PERSON AFFECTED
BY THE ARRANGEMENT IN A 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 ALTERIN
INCIDED = OF ANY INCOME TAX;

THE

(B) DIRECTLY OR INDIRECTLY RELIEVING A
PERSON FROM LIABILITY TO PAY INCOME TAX
OR FROM A_ POTENTIAL OR’ PROSPECTIVE
LIABILITY TO FUTURE INCOME TAX;



1 (C) DIRECTLY OR’ INDIRECTLY AVOIDING,
2 POSTPONING, OR REDUCING ANY LIABILITY TO
3 INCOME TAX, OR ANY POTENTIAL OR
4 PROSPECTIVE LIABILITY TO FUTURE INCOME
5 TAX.

6 THERE Is ‘TAX AVOIDANCE’ IN THE

AFOREMENTIONED INSTANCES, WHERE THE
8 TRANSACTION OR ARRANGEMED Is
9 MOTIVATED BY OBTAINING TAX BENEFIT OR
10 ADVANTAGE WITH NO COMMERCIAL REALITY
u OR ECONOMIC EFFECT AND THE USE OF THE
12 PROVISIONS OF THE TAXATION LAW ON SUCH
13 TRANSACTION OR ARRANGEMENT WOULD NOT
4 HAVE BEEN THE INTENTION OF THE LAW.

15 SEC.13. Section 73 of the NIRC is hereby amended to read as follows:

16 SEC. 73. Distribution of Dividends or Assets by
r Corporations. -

8 (A) Definition of Dividends. - xxx

9 [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.]

23 (B) Stock Dividend. — xxx

4 (C) LIQUIDATING DIVIDENDS. — LIQUIDATING
25 DIVIDENDS REPRESENTING THE REMAINING
26 GAINS REALIZED OR LOSS SUSTAINED BY THE
27 STOCKHOLDER IN A COMPLETE LIQUIDATION
28 OR DISSOLUTION BY A CORPORATION.

9 [(C)](D) Dividends Distributed are Deemed Made from
30 Most Recently Accumulated Profits. ~ xxx



[(D)| (E) Net Income of a Partnership Deemed Constructively
Received by Partners. ~ xxx

14. Section 112 (A)(B) of the NIRC is hereby amended to read:
SEC. 112. Refunds or Tax Credits of Input Tax.

(A) Zero-rated or Effectively Zero-rated Sales. — Any VAT-
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, to the extent that such input tax has not
been applied against output tax: Provided, however, That in
the case of zero-rated sales under Section 106(A)(2)(a)(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 Bangko Sentral ng Pilipinas (BSP): PROVIDED
FURTHER, THAT — SECTION 106(A)(2)(a)(2) AND
SECTION 108 (B)(1) SHALL NO LONGER BE
SUBJECT TO ZERO PERCENT VAT RATE IN
ACCORDANCE WITH THE VAT REFUND
PROVISIONS UNDER SECTI 106(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 goods or properties 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(B)(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
issuance of a tax credit certificate] for any unused input tax
[which may be used in payment of his other internal revenue
taxes].

(C) Period within which Refund of Input Taxes shall be Made.
- In proper cases, the Commissioner shall grant a refund for
creditable input taxes within ninety (90) days from the date of
submission of the official receipts or invoices and other
documents in support of the application filed in accordance
with Subsections (A) and (B) hereof: Provided, that should
the commissioner find that the grant of refund is not proper,
the commissioner must state in writing the legal and factual
basis for the denial.

In case of full or partial denial of the claim for tax refund OR
TAX CREDIT, OR THE FAILURE ON THE PART OF
THE COMMISSIONER TO ACT ON THE
APPLICATION WITHIN THE PERIOD PRESCRIBED
ABOVE, the taxpayer affected may, within thirty (30) days
from the receipt of the decision denying the claim OR
AFTER THE EXPIRATION OF THE ONE HUNDRED
TWENTY DAY-PERIOD, appeal the decision OR THE
UNACTED CLAIM with the Court of Tax Appeals:
Provided, however, that failure on the part of any official,
agent, or employee of the BIR to act on the application within
the ninety (90)-day period shall be punishable under section
269 of this Code.

15. Section 119 of the NIRC is hereby amended to read:

Sec. 119. Tax on Franchises. ~ Any provision of general or
special law to the contrary notwithstanding, there shall be
levied, assessed and collected in respect to all EXISTING
OR FUTURE franchise agreement or law pertaining TO
franchises on radio and/or television broadcasting AND
TELECOMMUNICATION companies whose annual gross
receipts of the preceding year do not exceed Ten million
pesos (P10,000,000.00), subject to Section 236 of this Code, a
FRANCHISE tax of three percent (3%), and on gas and


water utilities, a FRANCHISE tax of two percent (2%) on
the gross receipts derived from the business covered by the
3 law granting the franchii e: Provided, however, That radio
‘ and/OR broadcasting AND
5 TELECOMMUNICATION companies referred to in this
6 Section shall have an option to be registered as a value-added

taxpayer and pay the tax due thereon.[: Provided, further,
8 That once the option is exercised, said option shall not be
7 irrevocable.]

10 XXX

u SEC.16. Section 119 of the NIRC is hereby further amended to insert
12 thereafter a new section 119-A to read as follows:

13 SECTION 119-A. FRANCHISES OF DOMESTIC
4 AIRLINES. — THE PROVISIONS OF P.D. NO. 1590 ON
5 THE FRANCHISE TAX OF PHILIP! E AIRLINES,
16 INC., R.A. NO. 7151 ON THE FRANCHISE TAX OF
Y CEBU AIR, INC., R.A. NO. 7583 ON THE FRANCHISE
18 TAX OF ABOITIZ AIR TRANSPORT CORPORATION,
19 R.A. NO. 7909 ON THE FRANCHISE TAX OF PACIFIC
20 AIRWAYS CORPORATION, R.A. NO. 8339 ON THE
21 FRANCHISE TAX OF AIR PHILIPPINES, OR ANY
OTHER EXISTING OR FUTURE FRANCHISE
AGREEMENTS OR LAWS PERTAINING TO A
24 DOMESTIC AIRLINE TO THE CONTRARY
25 NOTWITHSTANDING:

(A) THE FRANCHISEE SHALL BE LIABLE TO PAY A
FRANCHISE TAX OF 3% OF GROSS RECEIPTS
28 DERIVED FROM TRANSPORT OPERATIONS;

29 (B) THE FRANCHISEE SHALL BE LIABLE TO PAY
30 THE CORPORATE INCOME TAX FOR REVENUES
31 DERIVED FROM ALL SOURCES;

32 (C) THE FRANCHISEE SHALL REGISTER FOR
33 VALUE-ADDED TAX UNDER SECTION 236, AND TO
34 ACCOUNT UNDER TITLE IV OF THE NATIONAL
5 INTERNAL REVENUE CODE OF 1997, AS AMENDED,



FOR VALUE-ADDED TAX ON ITS SALE OF GOODS,
PROPERTY OR SERVICES AND ITS LEASE OF
PROPERTY; AND

(D) THE FRANCHISEE IS LIABLE TO PAY ALL
APPLICABLE TAXES AND IMPOSITIONS LEVIED
UNDER THE NATIONAL INTERNAL REVENUE
CODE, AS AMENDED, AND THE LOCAL
GOVERNMENT CODE, AS AMENDED.

THE FRANCHISEE SHALL FILE THE RETURN
WITH, AND PAY THE TAX DUE THEREON TO THE
COMMISSIONER OR HIS DULY AUTHORIZED
REPRESENTATIVE, IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 128 OF THIS CODE, AND
THE RETURN SHALL BE SUBJECT TO AUDIT BY
THE BUREAU OF INTERNAL REVENUE, ANY
PROVISION OF ANY EXISTING LAW TO THE
CONTRARY NOTWITHSTANDING.

17. Section 204 of the NIRC is hereby amended to read:

SEC. 204. Authority of the Commissioner to Compromise,
Abate and Refund or Credit Taxes. ~ The Commissioner may

(A) Compromise the payment of any internal revenue tax,
when:

XXX

Where the basic tax involved exceeds [One million pesos
(P1,000.000)] TEN MILLION PESOS (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.

XXX

26


SEC. 18. Section 220 of the NIRC is hereby amended to read:

SEC. 220. Form and Mode of Proceeding in Actions Arising
under this Code. [Civil and criminal actions and
proceedings instituted in behalf of the Government under the
authority of this Code or other law enforced by the Bureau of
Internal Revenue shall be brought in the name of the
Government of the Philippines and shall be conducted by
legal officers of the Bureau of Internal Revenue but no civil
or criminal action for the recovery of taxes or the enforcement
of any fine, penalty or forfeiture under this Code shall be filed
in court without the approval of the Commissioner.]

ALL CIVIL AND CRIMINAL ACTIONS SHALL BE
BROUGHT IN THE NAME OF THE GOVERNMENT
OF THE PHILIPPINES AND SHALL BE FILED IN
COURT WITH THE APPROVAL OF THE
COMMISSIONER OF INTERNAL REVENUE OR HIS
OR HER DULY AUTHORIZED REPRESENTATIVE.

CIVIL ACTIONS INVOLVING DISPUTED
ASSESSMENTS AND COLLECTIONS OR REFUNDS
OF INTERNAL REVENUE TAXES, FEES OR OTHER
CHARGES OR PENALTIES IN RELATION THERETO,
OR OTHER MATTERS ARISING UNDER THIS CODE
OR OTHER LAW ENFORCED BY THE BUREAU
SHALL BE HANDLED EXCLUSIVELY BY LEGAL
OFFICERS OF THE BUREAU IN ALL STAGES OF
THE PROCEEDINGS, INCLUDING = APPEALS
BEFORE THE PROPER COURTS.

FOR THIS PURPOSE, THE SECRETARY OF
FINANCE, UPON RECOMMENDATION OF THE
COMMISSIONER, SHALL PROMULGATE THE
NECESSARY RULES AND REGULATIONS FOR THE
IMPLEMENTATION OF THIS PROVISION.

SEC.19. Sec. 222 of the NIRC is hereby amended to read:


SEC.

SEC. 222. Exceptions as to Period of Limitation of
Assessment and Collection of Taxes. —

(a) xxx

(b) If before the expiration of the time prescribed in
Section 203 for the assessment of the tax, [both the
Commissioner and] the taxpayer [have agreed] APPLIES
WITH THE COMMISSIONER in writing to extend the
period, the tax may be assessed within the period [agreed
upon] SPECIFIED IN THE APPLICATION WHICH
SHALL NOT EXCEED SIX (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.

XXX
20. Sec. 237 of the NIRC is hereby amended to read:

SEC. 237. Issuance of Receipts or Sales or Commercial
Imoices. ~

(A) Issuance. ~ 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 data, the Bureau shall require
taxpayers engaged in the export of goods and service,
taxpayers engaged in e-commerce, and taxpayers under the
jurisdiction of the Large Taxpayers Service to issue AND
TRANSMIT electronic receipts or sales or commercial
invoices [in lieu of manual receipts or sales or commercial
invoices] THRU 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 receipts of
sales or commercial invoices in lieu of manual receipts or
sales or commercial invoices. PROVIDED FURTHER,
SUBJECT TO 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.

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
COMMERCIAL INVOICES. THIS MAY INCLUDE
THE USE OF DIGITAL SIGNATURE ISSUED BY
CERTIFICATION AUTHORITY AS ACCREDITED BY
THE BUREAU.

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
SHALL REFER TO THE UNIQUE ASSIGNED SERIES
OF NUMBERS AND/OR LETTERS LINKED TO A
VALIDATED SALES TRANSATION REPORTED
THROUGH THE DESIGNATED ELECTRONIC
CHANNEL.

The original of each 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,

29



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 invoices,
digital record of the same [shall be kept by the purchaser,
customer or client and the issuer for the same period above
stated] BEARING THE APPROVED ELECTRONIC
TAX TRANSACTION NUMBER SHALL BE
SUFFICIENT COMPLIANCE.

XXX

SEC. 21. Sec. 237-A of the NIRC is hereby amended to read:

SEC. 237-A. Electronic Sales Reporting 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 goods and services, taxpayers engaged in e-
commerce, and taxpayers under the jurisdiction of the Large
Taxpayers Service to USE A SYSTEM CAPABLE OF
ISSUING ELECTRONIC RECEIPTS OR SALES OR
COMMERCIAL INVOICES, COLLECT
TRANSACTION RECORDS, AND TRANSMIT THE
SAME THRU THE DESIGNATED ELECTRONIC
CHANNELS OF THE BUREAU IN THE STANDARD
FORMAT REQUIRED [electronically 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 Internal Revenue: Provided, That the
POINT OF SALE (POS) machines, VALUE ADDED
NETWORK (VAN) TERMINALS, fiscal devices, and fiscal
memory devices WITH CAPACITY TO MAKE SUCH
TRANSMISSION shall be at the expense of the taxpayers|.]:
PROVIDED FURTHER, THAT THE COMMISSIONER
MAY REQUIRE ANY TAXPAYER TO COMPLY WITH
THE PROVISIONS OF THIS SECTION SUBJECT TO
THE RULES AND REGULATIONS TO BE ISSUED BY
THE SECRETARY OF FINANCE.

30



IN YEAR ONE TO YEAR FOUR OF THE
IMPLEMENTATION PERIOD, A TAXPAYER WHO
ADOPTS THE REQUIRED SYSTEM SHALL BE
GRANTED ATAX CREDIT OF ONE-TENTH
PERCENT (0.1%) OF THE PURCHASE VALUE, NET
OF VALUE ADDED TAX, FOR EVERY ELECTRONIC
RECEIPT OR SALE OR COMMERCIAL INVOICE
TRANSMITTED THRU THE DESIGNATED
ELECTRONIC CHANNELS OF THE BUREAU AND
ISSUED AN ELECTRONIC TAX TRANSACTION
NUMBER.

IN SUPPORT OF THE ELECTRONIC SALES
REPORTING SYSTEM, THE BUREAU MAY GRANT
TAX INCENTIVES FOR ELECTRONICALLY
TRACEABLE PAYMENTS (ETP) IN THE FORM OF
ALLOWABLE DEDUCTIBLE EXPENSE OF UP TO
TEN PERCENT (10%) OF THE ETP MADE BY THE
TAXPAYER. AN ANNUAL LIMIT ON’ THE
ALLOWED ETP DEDUCTIBLE EXPENSE PER
TAXPAYER MAYBE SET BY THE COMMISSIONER
WITH THE APPROVAL OF THE SECRETARY OF
FINANCE.

ELECTRONICALLY TRACEABLE PAYMENTS
REFER TO CREDIT CARD, DEBIT 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
ELECTRONIC RECEIPTS OR SALES OR
COMMERCIAL INVOICES TRANSMITTED THRU
THE DESIGNATED ELECTRONIC CHANNELS OF
THE BUREAU AND ISSUED AN ELECTRONIC TAX
TRANSACTION NUMBER.

XXX



1 SEC. 22. Section 250 of the NIRC is hereby amended to read:

2 SEC. 250. Failure to File Certain Information Returns. — In
3 the case of each failure to file an information return,
4 statement or list, or keep any record, or supply any
5 information required by this Code or by the Commissioner
6 ‘on the date prescribed therefor, unless it is shown that such
7 failure is due to reasonable cause and not to willful neglect,
8 there shall, upon notice and demand by the Commissioner,
9 be paid by the person failing to file, keep or supply the same,
10 [One thousand pesos (1,000)] FIVE THOUSAND PESOS
n (P5,000) for each failure: Provided, however, That the
2 aggregate amount to be imposed for all such failures during a
13 calendar year shall not exceed [Twenty-five thousand pesos
4 (P25,000)} TWO HUNDRED FIFTY THOUSAND
15 PESOS (P250,000).

16 SEC. 23. Section 255 of the NIRC is hereby amended to read:

” SEC. 255. Failure to File Return, Supply Correct and
8 Accurate Information, Pay Tax Withhold and Remit Tax and
19 Refund Excess Taxes Withheld on Compensation. — Any
20 person required under this Code or by rules and regulations
a promulgated thereunder to pay any tax make a return, keep
any record, or supply correct the accurate information, who
willfully fails to pay such tax, make such return, keep such
record, or supply correct and accurate information, or
withhold or remit taxes withheld, or refund excess taxes
withheld on compensation, at the time or times required by
27 law or rules and regulations shall, in addition to other
28 penalties provided by law, upon conviction thereof, be
29 punished [by] WITH a fine of not less than [Ten thousand
30 pesos (P10,000)]} ONE HUNDRED THOUSAND PESOS
31 (P100,000) and [suffer] imprisonment of not less than one (1)
32 year but not more than ten (10) years.

33 Any person who attempts to make it appear for any reason
34 that he or another has in fact filed a return or statement, or
35 actually files a return or statement and subsequently



withdraws the same return or statement after securing the
official receiving seal or stamp of receipt of internal revenue
office wherein the same was actually filed shall, upon
conviction therefore, be punished [by] WITH a fine of not
less than [Ten thousand pesos (P10,000)] ONE HUNDRED
THOUSAND PESOS (P100,000) but not more than [Twenty
thousand pesos (P20,000)] TWO HUNDRED THOUSAND
PESOS (P200,000) and [suffer] imprisonment of not less
than one (1) year but not more than three (3) years.

SEC. 24. Section 256 of the NIRC is hereby amended to read:

SEC.

SEC. 256. Penal Liability of Corporations. — Any
corporation, association or general co-partnership liable for
any of the acts or omissions penalized under this Code, in
addition to the penalties imposed herein upon the responsible
corporate officers, partners, or employees shall, upon
conviction for each act or omission, be punished [by] WITH
a fine of not less than [Fifty thousand pesos (P50,000)] ONE
HUNDRED THOUSAND PESOS (P100,000) but not more
than [One hundred thousand pesos (P100,000)] THREE
HUNDRED THOUSAND PESOS (P300,000).

25. Section 257 of the NIRC is hereby amended to read:

SEC. 257. Penal Liability for Making False Entries, Records
or Reports, or Using Falsified or Fake Accountable Forms.

(A) xxx
(B) Any person who:
XXX

(8) Willfully attempts in any manner to evade or defeat any
tax imposed under this Code, or knowingly uses fake or
falsified revenue official receipts, Letters of Authority,
certificates authorizing registration, Tax Credit Certificates,
Tax Debit Memoranda and other accountable forms shall,
upon conviction for each act or omission, be punished [by]
WITH a fine not less than [Fifty thousand pesos (P50,000)]



SEC.

SEC.

ONE HUNDRED THOUSAND PESOS (P100,000) but not
more than [One hundred thousand pesos (P100,000)] THREE
HUNDRED THOUSAND PESOS (P300,000) and [suffer]
imprisonment of not less than [two (2) years] SIX (6)
YEARS but not more than [six (6) years] TWELVE (12)
YEARS.

XXX
26. — Section 258 of the NIRC is hereby amended to read:

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 each act or omission, be punished [by] WITH
a fine of not less than [Five thousand pesos (P5,000)] FIFTY
THOUSAND PESOS (P50,000) but not more than [Twenty
thousand pesos (P20,000)] TWO HUNDRED THOUSAND
PESOS (P200,000) and [suffer] imprisonment of not less
than six (6) months but 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] WITH
a fine of not less than [Thirty thousand pesos (P30,000)]
THREE HUNDRED THOUSAND PESOS (P300,000) but
not more than [Fifty thousand pesos (P50,000)] FIVE
HUNDRED THOUSAND PESOS (P500,000) and [suffer]
imprisonment of not less than two (2) years but not more than
four (4) years.

27. Section 260 of the NIRC is hereby amended to read:

SEC. 260. Unlawful Possession of Cigarette Paper in Bobbins
or Rolls, Etc. — 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 issued 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] WITH a fine of not



SEC.

less than [Twenty thousand pesos (P20,000)] ONE
HUNDRED THOUSAND PESOS (P100,000) but not more
than [One hundred thousand pesos (P100,000)] 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.

28. — Section 261 of the NIRC is hereby amended to read:

SEC. 261. Unlawful Use of Denatured Alcohol. ~ Any person
who for 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 each act or omission be
punished [by] WITH a fine of not less than [Twenty thousand
pesos (P20,000)]} ONE HUNDRED THOUSAND PESOS
(P100,000) but not more than [One hundred thousand pesos
(P100,000)} 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.

29. — Section 262 of the NIRC is hereby amended to read:

SEC. 262. Shipment or Removal of Liquor or Tobacco
Products under False Name or Brand or as an Imitation of
any Existing or Otherwise 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 cask, bottle 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 act or omission, be punished [by]



WITH a fine of not less than [Twenty thousand pesos
(P20,000)] TWO HUNDRED THOUSAND PESOS
(P200,000) but not more than [One hundred thousand pesos
(P100,000)| FIVE HUNDRED THOUSAND PESOS
(500,000) and [suffer] imprisonment of not less than six (6)
years and one (1) day but not more than twelve (12) years.

SEC. 30. — Section 263 of the NIRC is hereby amended to read:

SEC. 263. Unlawful Possession or Removal of Articles
Subject to Excise Tax without Payment of the Tax. — xxx

(a) A fine of not less than [One thousand pesos (P1,000)]
TWENTY FIVE THOUSAND PESOS (P25,000) nor more
than [Two thousand pesos (P2,000)] SEVENTY FIVE
THOUSAND PESOS (P75,000) [and] OR [suffer]
imprisonment of not less than [sixty (60) days] THIRTY (30)
DAYS AND ONE (1) DAY but not more than [one hundred
(100) days] SIX (6) MONTHS, OR BOTH, 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)] TWO
HUNDRED FIFTY THOUSAND PESOS (P250,000);

(b) A fine of not less than [Ten thousand pesos (P10,000)]
SEVENTY FIVE THOUSAND PESOS (P75,000) but not
more than [Twenty thousand pesos (P20,000)] ONE
HUNDRED FIFTY THOUSAND PESOS (P150,000) [and]
OR [suffer] imprisonment of not less than [two (2) years]
SIX (6) MONTHS AND ONE (1) DAY but not more than
[four (4) years] ONE (1) YEAR, OR BOTH, 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
exceeds [One thousand pesos (P1,000)] TWO HUNDRED
FIFTY THOUSAND PESOS (P250,000) but does not
exceed [Fifty thousand pesos (P50,000)] FIVE HUNDRED
THOUSAND PESOS (P500,000);



(c) A fine of not less than [Thirty thousand pesos (P30,000)]
ONE HUNDRED FIFTY THOUSAND PESOS (P150,000)
but not more than [Sixty thousand pesos (P60,000)] THREE
HUNDRED THOUSAND PESOS (P300,000) [and] OR
[suffer] imprisonment of not less than [four (4) years] ONE
(1) YEAR AND ONE (1) DAY but not more than [six (6)
years] THREE (3) YEARS, 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 is
more than [Fifty thousand pesos (P50,000)} FIVE
HUNDRED THOUSAND PESOS (P500,000) but does not
exceed [One hundred fifty thousand pesos (P150,000)] ONE
MILLION PESOS (P1,000,000); or

(d) A fine of not less than [Fifty thousand pesos (P50,000)}
THREE HUNDRED THOUSAND PESOS (P300,000) but
not more than [One hundred thousand pesos (P100, 000)}
ONE MILLION FIVE HUNDRED THOUSAND PESOS
(P1,500,000) [and] OR [suffer] imprisonment of not less than
[ten (10) years] THREE (3) YEARS AND ONE (1) DAY
but not more than [twelve (12) years] SIX (6) YEARS, 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 exceeds [One hundred fifty thousand
pesos (P150,000)] ONE 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 law, or any person who
is found in possession of such articles which are exempt from
excise tax other than those to whom the same is lawfully
issued shall be punished with a fine of not less than (10) times
the amount of excise tax due on the articles found but not less
than [Five hundred pesos (P500)} TWENTY FIVE
THOUSAND PESOS (P25,000) and [suffer] imprisonment
of not less than two (2) years but not more than four (4) years.

Any manufacturer, owner or person in charge of any article
subject to excise tax who removes or allows or causes the



SEC.

SEC.

unlawful removal of any such articles from the place of
production or bonded warehouse, upon which the excise tax
has not been paid at the time and in the manner required, and
any person who knowingly aids or abets in the removal of
such articles as aforesaid, or conceals the same after illegal
removal shall, for the first offense, be punished with a fine of
not less than ten (10) times the amount of excise tax due on
the articles but not less than [One thousand pesos (P1,000)]
TWENTY FIVE THOUSAND (P25,000) and [suffer]
imprisonment of not less than fone (1) year] TWO (2)
YEARS but not more than [two (2) years] FOUR (4)
YEARS.

XXX
31. — Section 264 of the NIRC is hereby amended to read:

Sec. 264. Failure or refusal to Issue Receipts or Sales or
Commercial Invoices, Violations related to the Printing of
such 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 reflect 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] WITH a fine of not less than [One
thousand pesos (P1,000)] FIVE THOUSAND PESOS
(P5,000) but not more than [Fifty thousand pesos (P50,000)]
TWO HUNDRED FIFTY THOUSAND PESOS
(P250,000) and [suffer] imprisonment of not less than [two
(2) years] FOUR (4) YEARS but not more than [four (4)
years] EIGHT (8) YEARS.

XXX
32. Section 265 of the NIRC is hereby amended to read:

SEC. 265. Offenses Relating to Stamps. — Any person who
commits any of the acts enumerated hereunder shall, upon

38



SEC.

SEC.

SEC.

conviction thereof, be punished [by] WITH a fine of not less
than [Twenty thousand pesos (P20,000)] TWO HUNDRED
THOUSAND PESOS (P200,000) but not more than [Fifty
thousand pesos (P50,000)] FIVE HUNDRED THOUSAND
PESOS (P500,000) and [suffer] imprisonment of not less
than four (4) years but not more than eight (8) years: xxx

33. — Section 266 of the NIRC is hereby amended to read:

Sec. 266. Failure to Obey Summons. — Any person who,
being duly summoned to appear to testify, or to appear
UNDER SECTION 5-A 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]
WITH a fine of not less than [Five thousand pesos (P5,000)]
FIFTY THOUSAND PESOS (P50,000) but not more than
[ten thousand pesos (P10,000)} ONE HUNDRED
THOUSAND PESOS (P100,000) and [suffer] imprisonment
of not less than [one (1) year] TWO (2) YEARS but not more
than [two (2) years] FOUR (4) YEARS.

34. — Section 275 of the NIRC is hereby amended to read:

SEC. 275. 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] WITH a fine 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.

35. A new Title on Tax Incentives is hereby inserted in the NIRC

as Title XII to read:



TITLE XI
TAX INCENTIVES,

CHAPTER I
GENERAL PROVISIONS ON TAX INCENTIVES

SEC 290. GENERAL PROVISION. — ALL EXPORT
ACTIVITIES AND STRATEGIC INVESTMENTS,
INCLUDING THOSE INTENDED FOR’ THE
DOMESTIC MARKET, UNDER THE STRATEGIC
INVESTMENTS PRIORITY PLAN (SIPP) AS DEFINED
UNDER CHAPTER II OF THIS TITLE, WHETHER
LOCATED INSIDE OR OUTSIDE ECOZONES AND
FREEPORT, ELIGIBLE FOR REGISTRATION IN THE
RESPECTIVE IPAS EFFECTIVE JANUARY 1, 2019,
AND WHICH WILL QUALIFY FOR INCENTIVES
VALUATION AND REVIEW BY THE FISCAL
I NTIVES REVIEW BOARD (FIRB), MAY ONLY
BE GRANTED INCOME TAX AND CUSTOMS DUTY
INCENTIVES UNDER THIS TITLE, AND IN NO SUCH
CASE SHALL THE VALUE-ADDED TAX AND LOCAL
TAXES BE USED AS INVESTMENT TAX
INCENTIVES: PROVIDED, THAT THE TAX
INCENTIVES AVAILABLE UNDER THIS TITLE TO
THE AFOREMENTIONED RPRISES SHALL BE
APPLICABLE TO THE REGISTERED ACTIVITY OR
PROJECT ONLY IN SUCH A WAY THAT INCOME
DERIVED FROM NON-REGISTERED ACTIVITY OR
PROJECT SHALL BE SUBJECT TO APPROPRIATE
TAXES UNDER THIS CODE. THE PERIOD OF
AVAILMENT OF INCENTIVES SHALL BE
RECKONED FROM THE START OF COMMERCIAL
OPERATION.

SEC. 291. SCOPE AND COVERAGE. — THIS TITLE
SHALL COVER ALL EXISTING IPAS AND ALL
OTHER IPAS AND OTHER SIMILAR AUTHORITIES
THAT MAY BE CREATED BY LAW.

40


SEC. 291-A. GOVERNING PROVISION FOR IPAS. —
ALL EXISTING AND FUTURE IPAS SHALL
UNIFORMLY RECOMMEND THE GRANT OF TAX
INCENTIVES PROVIDED IN THIS TITLE TO THE
FIRB FOR ITS APPROVAL.

SEC. 291-B. EXISTING CHARTERS OF IPAS. — THE
IPAS SHALL MAINTAIN THEIR FUNCTIONS AND
POWERS AS PROVIDED UNDER THE SPECIAL
LAWS GOVERNING THEM EXCEPT ON THE
EXTENT MODIFIED BY THE PROVISIONS OF THIS
CODE, SUCH AS THOSE PERTAINING TO THE
REVIEW AND GRANT OF TAX INCENTIVES.

CHAPTER IL
TAX AND DUTY INCENTIVES

SEC. 292. - THE FOLLOWING TAX AND CUSTOMS
DUTY INCENTIVES MAY BE GRANTED TO
QUALIFIED REGISTERED ENTERPRISES, AS
DETERMINED BY THE BOARD OF THE
RESPECTIVE IPAS, SUBJECT TO THE REVIEW AND
APPROVAL OF THE FIRB:

(A) INCOME TAX INCENTIVES,

(a) INCOME TAX HOLIDAY (ITH). — THE ITH
SHALL BE GRANTED FOR A_ PERIOD OT
EXCEEDING THREE (3) YEARS. PROVIDED, THAT
AFTER THE EXPIRATION OF THE ITH, THE
FOLLOWING INCENTIVES MAY BE APPLIED FOR
A PERIOD NOT EXCEEDING FIVE (5) YEARS,
WHICH INCLUDES THE PERIOD OF ITH
AVAILMENT.

(b) REDUCED CORPORATE INCOME TAX. - A
REDUCED TAX RATE OF FIFTEEN PERCENT (15%)
OF THE TAXABLE INCOME AS DEFINED UNDER
SECTION 31 OF THIS CODE.

41


(c) TAX ALLOWANCE FOR INVESTMENTS. - AN
ALLOWANCE OF UP TO FIFTY PERCENT (50%) OF
THE ACTUAL QUALIFIED CAPITAL EXPENDITURE
INCURRED WITHIN THREE (3) YEARS SHALL BE
ALLOWED AS A DEDUCTION FROM THE TAXABLE
INCOME.

(d) DOUBLE DEDUCTION FOR RESEARCH AND
DEVELOPMENT. - EXPENSES INCURRED FOR
RESEARCH AND DEVELOPMENT RELATED TO
THE REGISTERED ACTIVITY, IDENTIFIED AND
APPROVED AS SUCH BY THE APPROPRIATE
GOVERNMENT AGENCY/IES SHALL BE
DEDUCTIBLE FROM THE GROSS INCOME FOR
INCOME TAX PURPOSES TO THE EXTENT OF TWO
HUNDRED PERCENT (200%) ON THE YEAR THE
SAID RESEARCH AND DEVELOPMENT EXPENSES
WERE INCURRED.

(e) DOUBLE DEDUCTION FOR’ TRAINING. -
EXPENSES INCURRED FOR TRAINING GIVEN TO
EMPLOYEES BY THE REGISTERED ENTERPRISE
FOR THE DEVELOPMENT OF SKILLS, IDENTIFIED
AND APPROVED AS NECESSARY BY THE
APPROPRIATE GOVERNMENT AGENCY/IES SHALL
BE DEDUCTIBLE FROM THE GROSS INCOME FOR
INCOME TAX PURPOSES TO THE EXTENT OF TWO
HUNDRED PERCENT (200%) ON THE YEAR THE
SAID TRAINING EXPENSE WAS INCURRED.

(f)} ADDITIONAL DEDUCTION FOR LABOR
EXPENSE. — A REGISTERED ENTERPRISE MAY BE
ALLOWED AN ADDITIONAL DEDUCTION FROM
TAXABLE INCOME OF FIFTY PERCENT (50%) OF
THE WAGES CORRESPONDING TO THE
INCREMENT IN THE NUMBER OF DIRECT LABOR.

(g) ONE HUNDRED PERCENT (100%) DEDUCTION
ON INFRASTRUCTURE DEVELOPMENT. -
REGISTERED ENTERPRISES 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 OTHR FACILITIES, SUCH AS
IRRIGATION, DRAINAGE, OR OTHER SIMILAR
WATERWORKS INFRASTRUCTURE MAY DEDUCT
FROM THE GROSS INCOME AN AMOUNT
EQUIVALENT TO ONE HUNDRED 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
SHALL 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 SHALL BE ALLOWED AS A
DEDUCTION FROM ITS TAXABLE INCOME
WITHIN A PERIOD OF FIVE (5) YEARS FROM THE
TIME OF SUCH REINVESTMENT: PROVIDED, THAT
PRIOR APPROVAL AND RECOMMENDATION BY
THE IPA CONCERNED OF SUCH REINVE: STMENT
WAS OBTAINED BY THE
ENTERPRISE PLANNUNG SUCH REINVESTMENT.

PROVIDED, THAT IN LIEU OF THE ITH UNDER (a),
THE TAX INCENTIVES UNDER (b), (), (@), (€), (Dy (g)
AND (h) MAY BE GRANTED.



PROVIDED FURTHER, THAT IN NO SUCH CASE
SHALL AN INCOME TAX INCENTIVE BE
EXTENDED BEYOND THE INITIAL GRANT OF FIVE
(5) YEARS.

PROVIDED FURTHER, THAT SUPERIOR NOC
FISCAL INCENTIVES, AS MAY BE DEFINED IN THE
SIPP, MAY BE GRANTED IN LEAST DEVELOPED
AREAS OR 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 III AND IV-A TO
OTHER AREAS OF THE COUNTRY MAY BE
ALLOWED A ONE-YEAR INCOME TAX INC. IVE
AS RELOCATION INCENTIVE.

(B) CUSTOMS DUTY INCENTIVES

REGISTERED ENTERPRISES QUALIFIED FOR
INCENTIVES MAY BE ALLOWED A MAXIMUM OF
FIVE (5) YEARS EXEMPTION ON CUSTOMS DUTY
ON IMPORTED CAPITAL EQUIPMENT,
MACHINERY, AND SPARE PARTS EXCLUSIVELY
USED FOR CAPITAL EQUIPMENT AND
MACHINERY, ALL INCLUDING CONSIGNMENT
THEREOF, RAW MATERIALS USED IN THE
MANUFACTURE, PROCESSING, AS DEFINED
HEREIN, OF PRODUCTS, AND IMPORTATION OF
SOURCE DOCUMENTS BY THE REGISTERED
ENTERPRISE. PROVIDED, THAT THE DUTY-FREE
IMPORTATION SHALL BE USED EXCLUSIVELY
FOR THE REGISTERED EXPORT ACTIVITY.
PROVIDED FURTHER, THAT EXPANSION OF
REGISTERED ACTIVITIES MAY BE GRANTED
DUTY EXEMPTION ON CAPITAL EQUIPMENT
ONLY, SUBJECT TO THE FOLLOWING
CONDITIONS:

44



(i) THE ACTIVITY IS STILL COVERED BY THE
STRATEGIC INVESTMENTS PRIORITY PLAN
(SIPP);

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

(iii) THE CUSTOMS DUTY EXEMPTION
EXTENSION SHALL NOT EXCEED FIVE (5) YEARS.

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

‘SOURCE DOCUMENTS’ REFER) TO INPUT
MATERIALS AND DOCUMENTS REASONABLY
NEEDED BY LT. AND LT.-ENABLED INDUSTRIES
SUCH AS, BUT NOT LIMITED TO, BOO!
DIRECTORIES, MAGAZINES, NEWSPAPERS,

BROCHURES, PAMPHLETS, MEDICAL
RECORDS/FILES, LEGAL RECORDS/FILES,
INSTRUCTION MATERIALS, AND

DRAWINGS/BLUEPRINTS/OUTLINES.

CHAPTER III
ADMINISTRATION OF TAX INCENTIVES

SEC. 293. EXPANDED FUNCTIONS OF THE FISCAL

INCENTIVES REVIEW BOARD. - THE INCENTIVES
PROVIDED IN SECTION 290 MAY BE GRANTED BY

45



THE FISCAL INCENTIVES REVIEW BOARD (FIRB)
TO THE REGISTERED ENTERPRISE TO THE
EXTENT OF THEIR REGISTERED ACTIVITY UPON
RECOMMENDATION OF THE ADMINISTERING
IPA. THE PERIOD OF AVAILMENT OF INCENTIVES
SHALL BE RECKONED FROM THE START OF
COMMERCIAL OPERATION. IN THIS REGARD,
THE FIRB CREATED UNDER PRESIDENTIAL
DECREE (PD) NO. 776, AS AMENDED BY PD 1931
AND PD 1955, OFFICE OF THE PRESIDENT
MEMORANDUM ORDER NO. 23, SERIES OF 1986
AND EXECUTIVE ORDER 93, SERIES OF 1986,
SHALL BE EXPANDED TO INCLUDE THE
FOLLOWING FUNCTIONS AND POWERS:

(A) TO SERVE AS THE OVERALL
ADMINISTRATOR OF ALL INVESTMENT
INCENTIVES;

(B) TO REVIEW ALL IPA POLICY DECISIONS
RELATED TO THE ENDORSEMENT AND
AVAILMENT OF TAX INCENTIVES;

(C) TO REVIEW AND APPROVE THE GRANT OF
INVESTMENT TAX INCENTIVES AS
RECOMMENDED BY THE IPAS;

(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 TAX SUBSIDIES TO
GOVERNMENT-OWNED AND/OR-CONTROLLED
CORPORATIONS (GOCCS), GOVERNMENT
INSTRUMENTALITIES, (GIS), GOVERNMENT
COMMISSARIES, AND STATE UNIVERSITIES AND

46



COLLEGES (SUCS) AS MAY BE PROVIDED UNDER
THE ANNUAL GENERAL APPROPRIATIONS ACT:

PROVIDED, THAT THE SECRETARY OF FINANCE
SHALL AUTOMATICALLY BE THE CO-CHAIR, AND
THE DIRECTOR-GENERAL OF NATIONAL
ECONOMIC AND DEVELOPMENT AUTHORITY
(NEDA) AND THE SECRETARY OF DEPARTMENT
OF TRADE AND INDUSTRY (DTI) SHALL
AUTOMATICALLY BE MEMBERS, OF ALL THE
EXISTING AND FUTURE IPAS: PROVIDED
FURTHER, THAT THE COMPOSITION OF THE
GOVERNING BOARDS OF THE EXISTING IPAS
UNDER THEIR RESPECTIVE GOVERNING LAWS
ENUMERATED HEREUNDER SHALL BE AMENDED
FOR THIS PURPOSE, AS FOLLOWS:

(1) BOARD OF INVESTMENTS (BOD, UNDER
ARTICLE 4 OF E.O. 226, OR THE “OMNIBUS
INVESTMENT CODE OF 1987”;

(2) BASES AND CONVERSION AND
DEVELOPMENT AUTHORITY (BCDA) AND SUBIC
BAY METROPOLITAN AUTHORITY (SBMA), UNDER
SECTIONS 9 AND 13 (C) OF REPUBLIC ACT NO.
7227, OR “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”;

(3) CLARK DEVELOPMENT CORPORATION
(CDC), UNDER SECTION 3 OF E.O. 80, S. 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 ECONOMIC ZONE, AND
DIRECTING ALL HEADS OF DEPARTMENTS,
BUREAUS, OFFICES,



INSTRUMENTALITIES OF GOVERNMENT TO
SUPPORT THE PROGRAM”;

(4) PORO POINT MANAGEMENT CORPORATION
(PPMC), UNDER SECTION 6 OF E.O. 132, S. OF 2002
ENTITLED, ENTITLED, “AUTHORIZING THE
CREATION OF THE PORO POINT MANAGEMENT
CORPORATION AS THE IMPLEMENTING ARM 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”;

(5) ZAMBOANGA CITY SPECIAL ECONOMIC
ZONE (ZCSEZA), UNDER SECTION 9 OF R.A. 7903,
OR “AN ACT CREATING SPECIAL ECONOMIC
ZONE AND FREE PORT IN THE CITY OF
ZAMBOANGA AND ESTABLISHING FOR THIS
PURPOSE THE ZAMBOANGA CITY SPECIAL
ECONOMIC ZONE AUTHORITY, APPROPRIATING
FUNDS THEREFOR, AND FOR OTHER”;

(6) AUTHORITY OF THE FREEPORT AREA OF
BATAAN (AFAB), UNDER SECTION 14 OF R.A. 9728,
OR “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 AREA OF
BATAAN (AFAB), APPROPRIATING FUNDS
THEREFOR AND FOR OTHER PURPOSES OR THE
“FREEPORT AREA OF BATAAN ACT OF 2009”;

(7) TOURISM INFRASTRACTURE AND
ENTERPRISE ZONE AUTHORITY (TIEZA), UNDER
SECTION 65 OF R.A. 9593, OR “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 EFFICIENTLY IMPLEMENT THAT
POLICY, AND APPROPRIATING FUNDS
THEREFOR”;

(8) AURORA SPECIAL ECONOMIC. ZONE
(ASEZA), UNDER SECTION 15 OF R.A. 9490, OR “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” AND SECTION 8 OF R.A. 10083,
OR “AN ACT AMENDING R.A. 9490, OR THE
"AURORA SPECIAL ECONOMIC ZONE ACT OF
2007”;

(9) CAGAYAN ECONOMIC ZONE AUTHORITY
(CEZA), UNDER SECTION 7 OF R.A. 7922, OR “AN
ACT ESTABLISHING A SPECIAL ECONOMIC ZONE
AND FREE PORT 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”;

(10) PHILIPPINE VETERANS INVESTMENT
DEVELOPMENT COOPERATION (PHIVIDEC),
UNDER SECTION 1, AMENDING SECTION 6 OF P.D.
538 AND SECTION 2 OF E.O. 1031, S. OF 1985
ENTITLED, “REORGANIZING THE  PHIVIDEC
INDUSTRIAL AUTHORITY”;

(11) THE PHILLIPINE ECONOMIC ZONE
AUTHORITY (PEZA), UNDER SECTION 11 OF R.A.
7916, OR “AN ACT PROVIDING FOR THE LEGAL
FRAMEWORK AND MECHANISMS FOR THE
CREATION, OPERATON, ADMINISTRATION, AND
COORDINATION OF SPECIAL ECONOMIC ZONES



IN THE PHILIPPINES, CREATING FOR THIS
PURPOSE, THE PHILIPPINE ECONOMIC ZONE
AUTHORITY (PEZA), AND FOR OTHER PURPOSES”.

SEC. 294. COMPOSITION OF THE FIRB. — THE FIRB
SHALL BE RECONSTITUTED AND SHALL BE
COMPOSED OF THE FOLLOWING MEMBERS:

(1) SECRETARY OF THE DEPARTMENT OF
FINANCE (DOF);

(2) SECRETARY OF THE DEPARTMENT OF
TRADE AND INDUSTRY (DTD;

(3) DIRECTOR GENERAL OF THE NATIONAL
ECONOMIC AND DEVELOPMENT AUTHORITY
(NEDA);

(4) EXECUTIVE SECRETARY OF THE
PHILIPPINES; AND

(5) A MEMBER APPOINTED BY THE PRESIDENT
WHO SHALL COME FROM THE PRIVATE SECTOR
WHO SHALL SERVE FULL-TIME. PROVIDED, THAT
HE OR SHE IS DISQUALIFIED FROM BEING A
DIRECTOR, OFFICER, EMPLOYEE, CONSULTANT,
LAWYER, AGENT OR STOCKHOLDER OF ANY
REGISTERED ENTERPRISE OR A
REPRESENTATIVE OR MEMBER OF ANY
ASSOCIATION OF REGISTERED ENTERPRISES, IN
WHICH CASE, HE OR SHE SHALL RESIGN FROM,
AND DIVEST HIMSELF OF ANY AND ALL
INTERESTS IN SUCH REGISTERED ENTERPRISE
OR ASSOIATION OF REGISTERED ENTERPRISE
BEFORE ASSUMPTION OF OFFICE AS MEMBER OF
THE FIRB.

THE TECHNICAL COMMITTEE OF THE FIRB SHALL
BE COMPOSED OF THE FOLLOWING MEMBERS:

(1) UNDERSECRETARY OF DOF;

50


(2) UNDERSECRETARY OF DTI;

(3) UNDERSECRETARY OF DBM;

(4) DEPUTY DIRECTOR GENERAL OF NEDA;
(5) COMMISSIONER OF BIR;

(6) COMMISSIONER OF BOC; AND

(7) EXECUTIVE DIRECTOR OF THE NTRC.

THE NATIONAL TAX RESEARCH CENTER (NTRC)
SHALL SERVE AS THE SECRETARIAT OF THE
FIRB.

CHAPTER IV.
QUALIFIED ACTIVITIES FOR TAX INCENTIVES

SEC. 295. STRATEGIC INVESTMENTS PRIORITY
PLAN (SIPP). - THE BOARD OF INVESTMENT (BOD,
IN COORDINATION WITH THE OFFICE OF THE
PRESIDENT, THE CONCERNED IPAS, AND OTHER
GOVERNMENT AGENCIES AND THE PRIVATE
SECTOR, SHALL FORMULATE THE PLAN 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 THREE (3) YEARS SUBJECT TO
REVIEW AND AMENDMENT AS THE NEED ARISES.

THE FOLLOWING CRITERIA SHALL BE COMPLIED
WITH IN THE LIST OF ECONOMIC ACTIVITIES IN



(A) THE ACTIVITY SHALL BE COVERED BY THE
PHILIPPINE DEVELOPMENT PLAN OR_ ITS
EQUIVALENT AND OTHER GOVERNMENT
PROGRAMS, AND SHALL REFLECT THE HIGH-
LEVEL PRIORITIES OF THE COUNTRY;

(B) THE ACTIVITY SHALL ENDEAVOR TO BE
NEUTRAL IN TERMS OF NATIONALITY AND
MARKET, PROVIDED THAT THOSE INTENDED FOR
THE DOMESTIC MARKET BE IMPORT-
SUBSTITUTING OR IMPORT-COMPETING
PRODUCTS OR ACTIVITIES;

(C) THE ACTIVITY’S PERFORMANCE SHALL BE
MEASURABLE IN TERMS OF EXPORT SALES,
ACTUAL INVESTMENTS, ACTUAL JOB CREATION,
INVESTMENTS IN LAGGING REGIONS AS DEFINED
IN THE SIPP, INVESTMENT AND EMPLOYMENT IN
RESEARCH AND DEVELOPMENT, LINKAGES
CREATION, AND SPILL-OVER EFFECTS, AMONG
OTHERS;

(D) THE ACTIVITY SHALL NOT INCLUDE THOSE
THAT ARE PART OF CROSS-SUBSIDY SCHEMES;

(E) THE ACTIVITY IN LAGGING REGIONS SHALL
BE GIVEN PREFERENCE;

(F) THE ACTIVITY SHALL TAKE INTO ACCOUNT
THE FOLLOWING:

(1) SUBSTANTIAL AMOUNT OF ACTUAL
INVESTMENTS;

(2) CONSIDERABLE GENERATION OF ACTUAL
FULL TIME EMPLOYMENT;



(3) ADOPT INCLUSIVE BUSINESS ACTIVITIES
AND VALUE-ADDED PRODUCTION BY MICRO,
SMALL, AND, MEDIUM-SIZE ENTERPRISES
(MSMES);

(4) USE OF MODERN OR NEW TECHNOLOGY;

(5) ADOPTION OF ADEQUATE ENVIRONMENTAL
PROTECTION SYSTEMS;

(6) ADDRESS MISSING GAPS IN THE
SUPPLY/VALUE CHAIN AND/OR MOVE UP THE
VALUE CHAIN OR PRODUCT LADDER;

(7) PROMOTIO! OF MARKET
COMPETITIVENESS; AND

(8) COMMERCIALIZATION OF IDEAS AND
INTRODUCTION OF INNOVATION ACTIVITIES
WHETHER PRODUCT, PROCESS, MARKETING, OR
NEW BUSINESS 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 INDICATORS.

THE ACTIVITY MUST COMPLY WITH THE
SPECIFIC QUALIFICATION REQUIREMENTS
AND/OR CONDITIONS FOR A’ PARTICULAR
SECTOR OR INDUSTRY AND OTHER LIMITATIONS
AS SET AND DETERMINED BY THE BOI.



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 INCENTIVES TO HIGHLY DESIRABLE
PROJECTS THAT MAY INCLUDE THOSE THAT ARE
NOT PROVIDED IN THE SIPP: PROVIDED FURTHER,
THAT THE BENEFITS THAT THE GOVERNMENT
COULD DERIVE FROM SUCH’ INVESTMENT
THERETO IS CLEAR AND CONVINCING AND FAR
OUTWEIGHS 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 UNITED STATES DOLLARS (USD
500,000,000).

(B) MINIMUM DIREC EMPLOYMENT
GENERATION OF AT LEAST ONE THOUSAND FIVE
HUNDRED (1,500) PERSONS WITHIN THE FIRST
YEAR OF ITS OPERATION:

PROVIDED FINALLY, THAT THE GOVERNMENT
MAY UTILIZE ITS RESOURCES FOR THE GRANT
OF INCENTIVES SUCH AS LAND USE, WATER
APPROPRIATION, POWER PROVISION, AND
OTHER SIMILAR RESOURCES.

SEC. 296. ADDITIONS AND AMENDMENTS TO THE
SIPP AND SUSPENSION OF ACTIVITIES THEREOF. —
SUBJECT TO PUBLICATION REQUIREMENTS AND
THE CRITERIA FOR INVESTMENT PRIORITY
DETERMINATION, THE BOI MAY, AT ANY TIME,
INCLUDE ADDITIONAL AREAS IN THE PLAN,
ALTER ANY OF THE TERMS OF THE



DECLARATION OF AN INVESTMENT AREA, AND
TEMPORARILY OR PERMANENTLY SUSPEND
ACTIVITIES 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 IN THE PLAN.

SEC. 297. PUBLICATION OF THE SIPP AND
AMENDMENTS THERETO. — UPON APPROVAL OF
THE PLAN, IN WHOLE OR IN PART, OR UPON
APPROVAL OF AN AMENDMENT THEREOF, THE
PLAN OR THE AMENDMENT, SPECIFIYING AND
DECLARING THE AREAS OF INVESTMENTS SHALL
BE PUBLISHED IN AT LEAST ONE (1) NEWSPAPER
OF GENERAL CIRCULATION OR THE OFFICIAL
GAZETTE AND ALL SUCH AREAS SHALL BE OPEN
FOR APPLICATION UNTIL PUBLICATION OF AN
AMENDMENT OR DELETION THEREOF.

SEC. 298. 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:

() IT WILL ENGAGE IN AN ACTIVITY
INCLUDED IN THE PLAN;

(2) IF THE APPLICANT IS ENGAGED OR
PROPOSES TO ENGAGE IN ACTIVITIES OTHER
THAN THE REGISTERED PROJECTS, IT SHALL
INSTALL AN ADEQUATE ACCOUNTING SYSTEM
THAT SHALL IDENTIFY THE INVESTMENTS,
REVENUES, COSTS AND PROFITS OR LOSSES OF
EACH REGISTERED PROJECT UNDERTAKEN BY
THE ENTERPRISE SEPARATELY FROM THE
AGGREGATE INVESTMENTS, REVENUES, COSTS



AND PROFITS OR LOSSES OF THE WHOLE
ENTERPRISE, OR ESTABLISH A SEPARATE
CORPORATION FOR EACH REGISTERED PROJECT
IF THE IPAS SHOULD SO REQUIRE;

(3) IT SHALL SATISFY THE PERFORMANCE
TARGETS SET FORTH 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.

(4) IT SHALL REGULARLY REPORT AND
COMPLY WITH THE REPORTORIAL
REQUIREMENTS UNDER REPUBLIC ACT NO. 10708
OR THE TIMTA LAW.

PROVIDED, THAT NON-COMPLIANCE OF THE
ABOVE-MENTIONED CONDITIONS SHALL CAUSE
THE REVOCATION OF THE TAX INCENTIVES
GRANTED AND THE REGISTERED ENTERPRISE
SHALL BE LIABLE TO 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 IMPORTATION OF
CAPITAL EQUIPMENT AND RAW MATERIALS
DIRECTLY AND EXCLUSIVELY USED IN THE
REGISTERED ACTIVITY INSIDE THE ZONES.

56



CHAPTER V
AVAILMENT OF TAX INCENTIVES

SEC. 299. INCOME TAX-BASED INCENTIVES. — ALL
REGISTERED ENTERPRISES ARE REQUIRED TO
FILE ALL THEIR TAX RETURNS USING THE
ELECTRONIC/ONLINE FACILITIES OF THE
BUREAU OF INTERNAL REVENUE (BIR). ON
AVAILING THE INCOME TAX-BASED INCENTIVES,
THE REGISTERED ENTERPRISE SHALL BE
REQUIRED TO SECURE A CERTIFICATE OF
ENTITLEMENT ISSUED BY THE FIRB AND ATTACH
THE SAME TO ITS INCOME TAX RETURN (ITR) OR
ANNUAL INFORMATION RETURN (AIR),
WHICHEVER IS APPLICABLE. THEREAFTER, THE
REGISTERED ENTERPRISE SHALL FILE ITS CLAIM
WITH THE BIR FOR VALIDATION.

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

SEC. 300. CUSTOMS DUTY EXEMPTION ON CAPITAL
EQUIPMENT. — 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

57



NEEDED AND WILL BE USED EXCLUSIVELY IN
AND AS PART OF THE DIRECT COST OF THE
REGISTERED ACTIVITY OF THE REGISTERED
ENTERPRISE, AND ARE NOT MANUFACTURED
DOMESTICALLY IN SUFFICIENT QUANTITY, OF
COMPARABLE QUALITY AND AT REASONABLE
PRICES. PRIOR APPROVAL OF THE IPA MAY BE
SECURED FOR THE PART TIME UTILIZATION OF
SAID EQUIPMENT IN A NON-REGISTERED
ACTIVITY TO MAXIMIZE USAGE THEREOF,
PROVIDED THE PROPORTIONATE TAXES AND
DUTIES ARE PAID ON A SPECIFIC EQUIPMENT
AND MACHINERY IN PROPORTION TO_ ITS
UTILIZATION FOR NON-REGISTERED ACTIVITIES.
IN THE EVENT, IT SHALL BE USED FOR NON-
REGISTERED ACTIVITY OF THE REGISTERED
ENTERPRISE AT ANYTIME WITHIN THE FIRST
FIVE (5) YEARS FROM DATE OF IMPORTATION,
THE REGISTERED ENTERPRISE SHALL FIRST
SEEK PRIOR APPROVAL OF THE AUTHORITY,
AND PAY THE TAXES AND CUSTOMS DUTIES
THAT WERE NOT PAID UPON ITS IMPORTATION;
AND

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

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:

(l) IF MADE TO ANOTHER ENTERPRISE
ENJOYING CUSTOMS DUTY EXEMPTION ON



IMPORTED CAPITAL EQUIPMENT AND/OR SPARE
PARTS;

(2) IF MADE TO ANOTHER ENTERPRISE NOT
DUTY EXEMPTION ON IMPORTED CAPITAL
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;

(3) EXPORTATION OF CAPITAL EQUIPMENT,
MACHINERY, SPARE PARTS OR SOURCE
DOCUMENTS, OR THOSE REQUIRED FOR
POLLUTION ABATEMENT AND CONTROL; OR

(4) FOR REASONS OF PROVEN TECHNICAL
OBSOLESCENCE.

PROVIDED, THAT IF THE REGISTERED
ENTERPRISE SELLS, TRANSFERS OR DISPOSES
THE AFOREMENTIONED IMPORTED — ITEMS
WITHOUT PRIOR APPROVAL, THE REGISTERED
ENTERPRISE AND THE VENDEE, TRANSFEREE, OR
ASSIGNEE SHALL BE SOLIDARILY LIABLE TO PAY
TWICE THE AMOUNT OF THE DUTY EXEMPTION
THAT SHOULD HAVE BEEN PAID DURING ITS
IMPORTATION. PROVIDED 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 LIABLE TO PAY THE
DUTIES BASED ON THE NET BOOK VALUE OF THE
CAPITAL EQUIPMENT IF IT HAS VIOLATED ANY
OF ITS REGISTRATION TERMS AND CONDITIONS.

59



CHAPTER VI
FINAL PROVISIONS

SEC. 301. NO DOUBLE REGISTRATION OF
ENTERPRISES. -— REGISTERED ENTERPRISES
SHALL NOT BE ALLOWED TO REGISTER THEIR
ACTIVITIES IN MORE THAN ONE (1) IPA.

SEC. 302. 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 THEIR CAPITAL
STOCK TO THE PUBLIC AND/OR- THEIR
EMPLOYEES WITHIN FIFTEEN (15) YEARS FROM
DATE OF REGISTRATION,

SEC. 303. 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:

(A) TWO (2) YEARS FOR ACTIVITIES THAT
HAVE RECEIVED THE SPECIAL TAX RATE OF 5%
OF GROSS INCOME EARNED TAX INCENTIVE FOR
MORE THAN TEN (10) YEARS;

60



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

(C) FIVE (5) YEARS FOR ACTIVITIES THAT HAVE
RECEIVED THE INCOME TAX HOLIDAY (ITH) OR
THE SPECIAL TAX RATE OF 5% OF GROSS
INCOME EARNED TAX INCENTIVE BELOW FIVE
(5) YEARS. PROVIDED THAT THE 5% TAX ON
GROSS INCOME EARNED SHALL COMMENCE
AFTER THE ITH PERIOD HAS LAPSED ONLY FOR
THE REMAINING YEARS WITHIN THE FIVE-YEAR
PERIOD.

SEC. 304, SUSPENSION AND FORFEITURE OF TAX
INCENTIVES OF REGISTERED ENTERPRISES,
REFUND AND PENALTIES; WAIVER AND
CONDONATION. — WHEN THERE IS PROBABLE
CAUSE TO BELIEVE THAT THE REGISTERED
ENTERPRISE HAS VIOLATED ITS REGISTRATION
TERMS AND CONDITIONS, THE IPA SHALL
RECOMMEND TO THE FIRB THE SUSPENSION OF
ITS AVAILMENT OF INCENTIVES, UNTIL PROVEN
OTHERWISE.

IN CASE OF CANCELLATION OF THE
CERTIFICATE OF REGISTRATION GRANTED
UNDER THIS ACT, THE BIR, IN COORDINATION
WITH THE FIRB, WILL REQUIRE THE PAYMEN OF
INCENTIVES ASESSED TO HAVE B! GRANTED
TO THE SAID ENTERPRISE FOR ITS REGISTERED
ACTIVITY AND IMPOSE CORRESPONDING FINES
AND PENALTIES.

THE FOREGOING IS WITHOUT PREJUDICE TO
THE AUTHORITY OF THE BIR TO CONDUCT

61



4

SEC.

read:

AUDIT AND IMPOSE PENALTIES UNDER THIS
CODE.

36. A new Title on Tax and Duty Treatment of Entities Other
Than Registered Enterprises is hereby inserted in the NIRC as Title XIII to

TITLE XU

TAX AND DUTY TREATMENT OF ENTITIES OTHER
THAN REGISTERED ENTERPRISES

SEC. 305. TAX AND DUTY TREATMENT OF
GOVERNMENT-OWNED AND CONTROLLED
CORPORATIONS. — ALL INTERNAL REVENUE TAX
AND DUTY OBLIGATIONS OF THE GOVERNMENT-
OWNED AND CONTROL CORPORATIONS (GOCCS)
SHALL BE CHARGEABLE TO THE TAX
EXPENDITURE FUND (TEF) IN| THE ANNUAL
G RAL APPROPRIATIONS ACT PURSUANT TO
THE PROVISIONS OF EXECUTIVE ORDER NO. 93, S.
OF 1986: PROVIDED, HOWEVER, THAT GOCCS
SHALL BE LIABLE TO ALL LOCAL GOVERNMENT
IMPOSITIONS.

FOR THIS PURPOSE, THE FOLLOWING
PROVISIONS OF LAWS SHALL BE AMENDED OR
REPEALED IN CONFORMITY WITH THIS SECTION:

(1) 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”;

(2) SECTION 8 OF REPUBLIC ACT NO. 7903
ENTITLED, “AN ACT CREATING SPECIAL
ECONOMIC ZONE AND FREE PORT IN THE CITY



OF ZAMBOANGA FOR THIS PURPOSE THE
ZAMBOANGA CITY SPECIAL ECONOMIC ZONE
AUTHORITY, APPROPRIATING FUNDS THEREFOR,
AND FOR OTHER PURPOSE’

(3) 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;”

(4) SECTIONS 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”;

(5) SECTION 10 OF PRESIDENTIAL DECREE NO.
538 ENTITLED, “CREATING AND ESTABLISHING
THE PHIVIDEC INDUSTRIAL AUTHORITY AND
MAKING IT A SUBSIDIARY AGENCY OF THE
PHILIPPINE VETERANS INVESTMENT
DEVELOPMENT CORPORATION DEFINING ITS
POWERS, FUNCTIONS AND RESPONSIBILITIES,
AND FOR OTHER PURPOSES”;

(6) 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;”

(7) 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 PHILIPPIN AND TO DEFINE ITS POWERS
AND PURPOSES,” BY STRENGTHENING THE



VOLUNTEER AND DEMOCRATIC CHARACTER OF
THE BOYS SCOUTS OF THE PHILIPPINES AND FOR
OTHER PURPOSES;”

(8) 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 PURPOSES;”

(9) SECTION 14 OF REPUBLIC ACT NO. 7354
ENTITLED, “AN ACT CREATING THE PHILIPPINE
POSTAL CORPORATION, DEFINING ITS POWERS,
FUNCTIONS AND RESPONSIBILITIES, PROVIDING
FOR REGULATION OF THE INDUSTRY AND FOR
OTHER PURPOSES CONNECTED THEREWITH;”

(10) SECTION 8 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 THEREFORE AND DECLARING
A NATIONAL POLICY OBJECTIVE FOR THE TOTAL
ELECTRIFICATION OF THE PHILIPPINES ON AN
AREA COVERAGE — SERVICE BASIS, THE
ORGANIZATION, PROMOTION AND
DEVELOPMENT OF ELECTRIC COOPERATIVES TO
ATTAIN THE SAID OBJECTIVE, PRESCRIBING
TERMS AND CONDITIONS FOR THEIR
OPERATIONS, THE REPEAL OF RA 6038, AND FOR
OTHER PURPOSES;”

(11) SECTION 2 AND 19 OF REPUBLIC ACT NO.
9679 ENTITLED, “AN ACT AMENDING THE HOME
DEVELOPMENT MUTUAL FUND OTHERWISE
KNOWN AS THE PAG-IBIG FUND;”

(12) SECTION 17 (C) UNDER SECTION 8 OF
REPUBLIC ACT NO. 9576 ENTITLED, “INCREASING

64



THE MAXIMUM DEPOSIT INSURANCE COVERAGE,
AND STRENGTHENING THE REGULATORY AND
ADMINISTRATIVE AUTHORITY AND FINANCIAL
CAPABILITY OF PDIC;”

(13) SECTION 13 OF REPUBLIC ACT NO. 7820
ENTITLED, “AN ACT CREATING THE PARTIDO
DEVELOPMENT ADMINISTRATION, DEFINING ITS
POWERS AND FUNCTIONS, PROVIDING FUNDS
THEREFOR, AND FOR OTHER PURPOSE:

(14) SECTION 5(J) OF REPUBLIC ACT NO. 9510
ENTITLED, “AN ACT ESTABLISHING THE CREDIT
INFORMATION SYSTEM AND FOR’ OTHER
PURPOSES;”

(15) SECTION 13(E) OF PRESIDENTIAL DECREE
NO. 857 ENTITLED, “AN ACT PROVIDING FOR THE
REORGANIZATION OF PORT ADMINISTRATION
AND OPERATION FUNCTIONS IN THE
PHILIPPINES, REVISING PD 505 DATED JULY 11,
1974, CREATING THE PHILIPPINE PORT
AUTHORITY, BY SUBSTITUTION, AND FOR OTHER
PURPOSES;”

(16) SECTION 19 OF REPUBLIC ACT NO. 6847
ENTITLED, “AN ACT CREATING AND
ESTABLISHING THE PHILIPPINE SPORTS
COMMISSION, DEFINING ITs POWERS,
FUNCTIONS, AND RESPONSIBILITIES,
APPROPRIATING FUNDS THEREFOR, AND FOR
OTHER PURPOSES”;

(17) SECTION 8 (A) (B) AND SECTION 13 OF
REPUBLIC ACT NO. 6395 ENTITLED, “AN ACT
REVISING THE CHARTER OF THE NATIONAL
POWER CORPORATION”;

(18) SECTION 1 OF REPUBLIC ACT NO. 7291
ENTITLED, “AN ACT RESTORING THE TAX AND



DUTY INCENTIVES PREVIOUSLY ENJOYED BY
THE VETERANS FEDERATION OF THE
PHILIPPINES UNDER REPUBLIC ACT NUMBERED
TWENTY-SIX HUNDRED AND FORTY”; AND

(19) 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:”

PROVIDED, FINALLY, THAT PROVISIONS OF ALL
OTHER LAWS NOT OTHERWISE ENUMERATED
HEREIN THAT ARE INCONSISTENT WITH THE TAX
AND DUTY TREATMENT OF GOCCS UNDER THIS
SECTION ARE DEEMED AMENDED OR REPEALED.

SEC. 306. TAX AND DUTY TREATMENT OF
GRANTEES OF FRANCHISES WITH “IN LIEU OF ALL
TAXES” CLAUSES. — 1N CONSIDERATION OF THE
FRANCHISE AND RIGHTS GRANTED UNDER
APPLICABLE LAWS, THE GRANTEE SHALL PAY
TO THE PHILIPPINE GOVERNMENT DURING THE
LIFE OF ITS FRANCHISE ALL THE APPLICABLE
TAXES AND IMPOSITIONS LEVIED UNDER THE
NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND THE LOCAL GOVERNMENT
CODE, AS AMENDED, FOR REV ES EARNED
FROM ALL ACTIVITIES: PROVIDED, THAT THE
SECRETARY OF FINANCE SHALL BE CONSULTED
ON ANY CHANGES IN THE TAX AND DUTY
TREATMENT OF ANY GRANTEE.

FOR THIS PURPOSE, THE FOLLOWING
PROVISIONS OF LAWS SHALL BE AMENDED OR
REPEALED IN CONFORMITY WITH THIS SECTION:

(1) SECTION 13 AND 14 OF PRESIDENTIAL

DECREE 1590 ENTITLED “AN ACT GRANTING A
NEW FRANCHISE TO PHILIPPINE AIRLINES, INC.

66



TO ESTABLISH, OPERATE AND MAINTAIN AIR
TRANSPORT SERVICES IN THE PHILIPPINES AND
OTHER COUNTRIES”;

(2) SECTION 11 OF REPUBLIC ACT NO. 7151
ENTITLED “AN ACT GRANTING CEBU AIR, INC.
FRANCHISE TO ESTABLISH, OPERATE AND
MAINTAIN TRANSPORT SERVICES FOR THE
CARRIAGE OF PASSENGERS, MAIL, GOODS AND
PROPERTY BY AIR, BOTH DOMESTIC AND
INTERNATIONAL WITH CEBU AS ITS BASE”;

(3) SECTION 11 OF REPUBLIC ACT NO. 7583
ENTITLED “AN ACT GRANTING ABOITIZ AIR
TRANSPORT CORPORATION A FRANCHISE TO
ESTABLISH, OPERATE AND MAINTAIN TRANPORT
SERVICES FOR THE CARRIAGE OF GOODS, MAIL
AND OTHER PROPERTY BY AIR, BOTH DOMESTIC
AND INTERNATIONAL”;

(4) SECTION 12 AND 14 OF REPUBLIC ACT NO.
7909 ENTITLED “AN ACT GRANTING A FRANCHISE
TO PACIFIC AIRWAYS CORPORATION TO
ESTABLISH AND MAINTAIN RURAL AIR
TRANSPORT SYSTEM AND ALLIED SERVICES IN
THE PHILIPPINES”;

(5) SECTION 11 AND 15 OF REPUBLIC ACT NO.
8339. ENTITLED “AN ACT GRANTING AIR
PHILIPPINES CORPORATION (AIR PHILIPPINES) A
FRANCHISE TO ESTABLISH, OPERATE AND
MAINTAIN DOMESTIC AND INTERNATIONAL AIR
TRANSPORT SERVICES”;

(6) SECTION 14 OF REPUBLIC ACT NO. 7783
ENTITLED “AN ACT GRANTING THE MAJOR
TELECOMS, INC., A FRANCHISE TO ESTABLISH,
INSTALL, MAINTAIN, LEASE AND OPERATE WIRE
AND/OR WIRELESS = TELECOMMUNICATIONS
SYSTEMS, LI CIRCUITS AND STATIONS



THROUGHOUT THE PHILIPPINES FOR PUBLIC
DOMESTIC AND INTERNATIONAL
COMMUNICATIONS, AND FOR OTHER PURPOSES”;

(7) SECTION 10 OF REPUBLIC ACT NO 7939
ENTITLED “AN ACT GRANTING THE ISLAND
COUNTRY TELECOMMUNICATIONS, — IN
FRANCHISE TO ESTABLISH, INSTALL, MAINTAIN,
LEASE AND OPERATE WERE AND/OR WIRELESS
TELECOMMUNICATION SYSTEM AND SERVICES,
LINES, CIRCUITS AND STATIONS WITHIN AND
WITHOUT THE PHILIPPINES, AND FOR OTHER
PURPOSES”;

(8) 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 TELECOMMUNICATIONS SYSTEM
THROUGHOUT THE PHILIPPINES”;

(9) 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”;

(10) SECTION 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”;

(11) SECTION 8 OF REPUBLIC ACT NO. 7966
ENTITLED “AN ACT GRANTING THE ABS-CBN
BROADCASTING CORPORATION A FRANCHISE TO

68



CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
TELEVISION AND RADIO BROADCASTING
STATIONS IN THE PHILIPPINES AND FOR OTHER
PURPOSES”;

(12) SECTION 8 OF REPUBLIC ACT NO. 7967
ENTITLES “AN ACT GRANTING THE PACIFIC
BROADCASTING SYSTEM, INC. A FRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
RADIO = AND TELEVISION BROADCASTING
STATIONS WITHIN THE PHILIPPINES AND FOR
OTHER PURPOSES”;

(13) 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/COMMUNITY — ANTENNAE
TELEVISION SYSTEMS IN THE PHILIPPINES”;

(14) SECTION 13 OF REPUBLIC ACT NO. 8004
ENTITLED “AN ACT GRANTING TO MILLENNIA
TELECOMMUNICATIONS CORPORATION A
FRANCHISE TO INSTALL, OPERATE AND
MAINTAIN TELECOMMUNICATION — SERVICES
WITHIN THE PHILIPPINES AND INTERNATIONAL
POINTS, AND FOR OTHER PURPOSES”;

(15) SECTION 9 OF REPUBLIC ACT NO. 10900
ENTITLED “AN ACT EXTENDING FOR ANOTHER
TWENTY-FIVE (25) YEARS THE FRANCHISE
GRANTED TO BELL TELECOMMUNICATION
PHILIPPINES, INC., AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 7692, ENTITLED "AN ACT
GRANT: BELL TELECOMMUNICATION
PHILIPP ES, INC., A FRANCHISE TO INSTALL,
OPERA’ AND MAINTAIN
TELECOMMUNICATIONS SYSTEMS THROUGHOUT
THE PHILIPPINES AND FOR OTHER PURPOSES”;

69


(16) 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 THREE
HUNDRED TWENTY-ONE AND EXTENDING IT FOR
ANOTHER TWENTY-FIVE (25) YEARS, AND FOR
OTHER PURPOSES”;

(17) 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”;

(18) 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”;

(19) SECTION 9 OF REPUBLIC ACT NO. 8065
ENTITLED “AN ACT GRANTING THE ISLA
CELLULAR COMMUNICATIONS, INC., A
FRANCHISE TO CONSTRUCT, MAINTAIN,
ESTABLISH, OPERATE COMMERCIAL MOBILE
AND FIXED WIRELESS TELECOMMUNICATIONS
SYSTEM IN THE PHILIPPINES”;

(20) SECTION 9 REPUBLIC ACT NO. 8066
ENTITLED “AN ACT GRANTING THE ISLA PAGING
COMPANY, A FRANCHISE TO CONSTRUCT,
MAINTAIN, ESTABLISH, AND OPERATE
COMMERCIAL RADIO PAGING SERVICES IN THE
PHILIPPINES”;

70



(21) SECTION 8 OF REPUBLIC ACT NO. 8067
ENTITLED “AN ACT GRANTING THE RADIO
GUBAT NETWORK, INC., A FRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
RADIO BROADCASTING STATIONS IN THE BICOL
REGION”;

(22) SECTION 8 OF REPUBLIC ACT NO. 8068
ENTITLED “AN ACT GRANTING A FRANCHISE TO
AGUSAN COMMUNICATIONS FOUNDATION, INC.,
TO CONSTRUCT, OPERATE AND MAINTAID
STATIONS FOR RADIO AND TELEVISION IN THE
PROVINCE OF AGUSAN DEL SUR AND FOR OTHER
PURPOSES”;

(23) 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”

(24) SECTION 8 OF REPUBLIC ACT NO. 8080
ENTITLED “AN ACT GRANTING THE ASIAN-
PACIFIC BROADCASTING COMPANY, INC., A
FRANCHISE TO CONSTRUCT, INSTALL, OPERATE
AND MAINTA! BROADCASTING STATIONS IN
THE PHILIPPINES”;

(25) 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 TELEVISION
BROADCASTING STATIONS IN ZAMBOANGA DEL
SUR AND FOR OTHER PURPOSES”;

1



(26) SECTION 10 OF REPUBLIC ACT NO. 8095
ENTITLED “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”;

(27) SECTION 8 OF REPUBLIC ACT NO. 8096
ENTITLED “AN ACT GRANTING THE ALLIED
BROADCASTING CENTER, INCORPORATED A
FRANCHISE 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”;

(28) SECTION 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”;

(29) SECTION 8 OF REPUBLIC ACT NO. 8098
ENTITLED “AN ACT GRANTING BROADCAST
ENTERPRISES AND AFFILIATED MEDIA (BEAM),
INC., A FRANCHISE TO ESTABLISH, CONSTRUCT,
OPERATE AND MAINTAIN COMMERCIAL RADIO
AND TELEVISION BROADCAST STATIONS
INCLUDING CABLE TELEVISION SYSTEMS IN THE
PHILIPPINES”;

(30) 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 PURPOSES”;

(31) 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”;

(32) SECTION 8 OF REPUBLIC ACT NO. 8116
ENTITLED, “AN ACT GRANTING THE VIMCONTU
BROADCASTING CORPORATION A FRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
RADIO AND TELEVISION BROADCASTING
STATIONS, WITHIN THE PHILIPPINES AND FOR
OTHER PURPOSES”;

(33) SECTION 8 OF REPUBLIC ACT NO. 8119
ENTITLED “AN ACT GRANTING THE GOOD NEWS
SORSOGON FOUNDATION, INC., A FRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
FOR RELIGIOUS, EDUCATIONAL AND
COMMERCIAL PURPOSES, RADIO AND
TELEVISION BROADCASTING STATIONS WITHIN
THE PHILIPPINES AND FOR OTHER PURPOSES”;

(34) 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 ISLAND
OF MINDANAO FOR EDUCATIONAL, CULTURAL,
AND COMMERCIAL PURPOSES”;

(35) SECTION 8 OF REPUBLIC ACT NO. 8121
ENTITLED “AN ACT GRANTING THE MLS.
NETWORK MANAGEMENT, INC. A FRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN



FOR COMMERCIAL PURPOSES, RADIO
BROADCASTING STATIONS IN THE PHILIPPINES
AND FOR OTHER PURPOSE!

(36) 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”;

(37) SECTION 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 TELEVISION STATIONS ANYWHERE IN THE
PHILIPPINES, AND FOR OTHER PURPOSES”;

(38) 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
PHILIPPINES”;

(39) SECTION 7 OF REPUBLIC ACT NO. 8144
ENTITLED “AN ACT GRANTING THE AZIMUTH
BROADCASTING CORPORATION OFFRANCHISE
TO CONSTRUCT, OPERATE AND MAINTAIN FOR
COMMERCIAL PURPOSES RADIO AND
TELEVISION BROADCASTING STATIONS IN THE
PHILIPPINES”;

(40) SECTION 8 OF REPUBLIC ACT NO. 8145
ENTITLED “AN ACT GRANTING THE RADYO
PILIPINO CORPORATION AFRANCHISE TO

74



CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
COMMERCIAL RADIO AND TELEVISION
BROADCASTING STATIONS, SATELLITE AND
CABLE STATIONS IN THE PHILIPPINES”;

(41) SECTION 14 OF REPUBLIC ACT NO. 8147
ENTITLED “AN ACT GRANTING THE SOUTHERN
BROADCASTING NETWORK AFRANCHISE TO
CONSTRUCT, MAINTAIN, ESTABLISH AND
OPERATECOMMERCIAL RADIO/TELEVISION
BROADCASTING STATIONS, IN THE PHILIPPINES”;

(42) SECTION 8 OF REPUBLIC ACT NO. 8149
ENTITLED “AN ACT GRANTING THE TAGBILARAN
BROADCASTING SYSTEM AFRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
RADIO. AND TELEVISION BROADCASTING
STATIONS, IN THE VISAYAS REGION, AND FOR
OTHER PURPOS|

(43) SECTION 8 OF REPUBLIC ACT NO. 8154
ENTITLED “AN ACT GRANTING PRIME
BROADCASTING NETWORK, INCORPORATED, A
FRANCHISE TO CONSTRUCT, OPERATE AND
MAINTAIN STATIONS RADIO AND
TELEVISION IN THE PHILIPPINES;

(44) SECTION 4 OF REPUBLIC ACT NO. 8158
ENTITLED “AN ACT EXTENDING THE FRANCHISE
GRANTED TO JORGE D. BAYONA UNDER
REPUBLIC ACT NUMBERED FIFTY-SEVEN
HUNDRED EIGHTY-NINE, ASSIGNING IT IN FAVOR
OF PBN BROADCASTING NETWORK INC., AND
RENEW: THE TERM THEREOF FOR ANOTHER
TWENTY-FIVE (25) YEARS FROM THE DATE OF
THE EFFECTIVITY OF THIS ACT”;

(45) SECTION 8 OF REPUBLIC ACT NO. 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”;

(46) SECTION 5 OF REPUBLIC ACT NO. 10926
ENTITLED “AN ACT EXTENDING FOR TWENTY-
FIVE (25) YEARS THE FRANCHISE GRANTED TO
SMART COMMUNICATIONS, INC., (FORMERLY
SMART INFORMATION TECHNOLOGIES, INC.)
AMENDING FOR THE PURPOSE REPUBLIC ACT
NO. 7294, ENTITLED, “AN ACT GRANTING SMART
INFORMATION TECHNOLOGIES INC. (SMART) A
FRANCHISE TO ESTABLISH, MAINTAIN, LEASE
AND OPERATE INTEGRATED
TELECOMMUNICATIONS/COMPUTER/ELECTRONI
C SERVICES, AND STATIONS THROUGHOUT THE
PHILIPPINES FOR PUBLIC DOMESTIC AND
INTERNATIONAL TELECOMMUNICATIONS, AND
FOR OTHER PURPOSES”;

(47) 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 ELECTRICITY
THROUGH HIGH VOLTAGE BACK-BONE SYSTEMS
OF INTERCONNECTED TRANSMISSION LINES,
SUBSTATIONS AND RELATED FACILITIES”;

(48) SECTION 13 OF PRESIDENTIAL DECREE 1869
— RESTORED PER OFFICE OF THE PRESIDENT
MEMORANDUM DATED AUGUST 24, 1995
CONSOLIDATING AND AMENDING PRESIDENTIAL
DECREE NOS. 1067-A, 1067-B, 1067-C, 1399 AND 1632
RELATIVE TO THE FRANCHISE AND POWERS OF
THE PHILIPPINE AMUSEMENT AND GAMING
CORPORATION (PAGCOR);

(49) SECTION 9 OF REPUBLIC ACT NO. 7953
ENTITLED “AN ACT AMENDING RA _ 6632

76



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 THE SAID FRANCHISE BY 25 YEARS
FROM THE’ EXPIRATION OF THE TERM
THEREOF”;

(50) SECTION 12 OF REPUBLIC ACT NO. 8407
ENTITLED “AN ACT AMENDING RA _ 6631
ENTITLED, “AN ACT GRANTING MANILA 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 THEREOF”;

(51) SECTION 9 OF REPUBLIC ACT NO. 8298
ENTITLED “AN ACT AMENDING REPUBLIC ACT
NUMBERED SEVENTY-NINE HUNDRED SEVENTY-
EIGHT, 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”;

(52) SECTION 12 OF REPUBLIC ACT NO. 8446
ENTITLED “AN ACT GRANTING THE FIL-ASIA
RACING CLUB A FRANCHISE TO CONSTRUCT,
OPERATE AND MAINTAIN A RACETRACK FOR
HORSE RACING IN RIZAL OR TARLAC, OR
PAMPANGA OR BATANGAS OR QUEZON CITY”;

(53) SECTION 9 OF REPUBLIC ACT NO. 402,
OTHERWISE KNOWN AS “AN ACT GRANTING
THE CLAVECILLA RADIO SYSTEM A FRANCHISE
TO ESTABLISH RADIO STATIONS FOR
BROADCASTING, TELECOMMUNICATION, AND
TELEVISION, AS AMENDED”;



(54) SECTION 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 TERM OF THE FRANCHISE BY
TWENTY-FIVE (25) YEARS FROM AUGUST 9, 1996
AS PROVIDED IN REPUBLIC ACT NO. 4905, AND
FOR OTHER PURPOSES”;

(55) SECTION 13 OF REPUBLIC ACT NO. 8004
ENTITLED “AN ACT GRANTING TO MILLENNIA
TELECOMMUNICATIONS CORPORATION A
FRANCHISE TO INSTALL, OPERATE AND
MAINTAIN TELECOMMUNICATIONS RVICES
WITHIN THE PHILIPPINES AND INTERNATIONAL
POINTS, AND FOR OTHER PURPOSES’

(56) 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 RADIOTELEPHON AND
RADIOTELEGRAPH STATIONS FOR THE
RECEPTION AND TRANSMISSION OF
RADIOTELEPHONE AND RADIOTELEGRAPH
COMMUNICATIONS WITHIN THE PHILIPPINES”;

(57) 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, ENTITLED * AN ACT GRANTING
INFOCOM COMMUNICATIONS NETWORK, INC.
(ICN), A FRANCHISE TO CONSTRUCT, ESTABLISH,
OPERATE AND MAINTAIN MOBILE RADIO

78



SYSTEMS SUCH AS RADIO, PAGING SYSTEMS,
CELLULAR PHONE SYSTEMS, PERSONAL
col UNICATION NETWORK (PCN AND
TRUNKED RADIO SYSTEMS’ WITHIN AND
WITHOUT THE PHILIPPINES FOR A PERIOD OF
TWENTY-FIVE (25) YEARS, AND FOR OTHER
PURPOS!| AS AMENDED BY THE REPUBLIC ACT
NO. 7940”;

(58) SECTION 8 OF REPUBLIC ACT NO. 7816
ENTITLED “AN ACT GRANTING THE MANILA
BROADCASTING COMPANY A FRANCHISE TO
CONSTRUCT, INSTALL, OPERATE AND MAINTAIN
RADIO AND — TELEVISION BROADCASTING
STATIONS WITHIN THE PHILIPPINES, AND FOR
OTHER PURPOSES”;

(59) SECTION 8 OF REPUBLIC ACT NO. 8027
ENTITLED “AN ACT GRANTING A FRANCHISE TO
THE KAISSAR BROADCASTING NETWORK, INC.
(KBNI), TO CONSTRUCT, INSTALL, ESTABLISH,
OPERATE, MANAGE AND MAINTAIN A NETWORK
OF RADIO = AND TELEVISION STATIONS
ANYWHERE IN THE PHILIPPINES, AND FOR
OTHER PURPOSES”;

(60) 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”; AND.

(61) SECTION 8 OF REPUBLIC ACT NO. 8122
ENTITLED “AN ACT GRANTING THE SWARA SUG
MEDIA CORPORATION OF THE PHILIPPINES A
FRANCHISE TO CONSTRUCT, INSTALL, OPERAT
AND MAINTAIN FOR COMMERCIAL PURPOSES
RADIO AND ~~ TELEVISION BROADCASTING
STATIONS IN THE PHILIPPINES AND FOR OTHER
PURPOS!

79



29

30

32

PROVIDED, FINALLY, THAT PROVISIONS OF ALL
OTHER LAWS NOT OTHERWISE ENUMERATED
HEREIN THAT ARE INCONSISTENT WITH THE TAX
AND DUTY TREATMENT OF GRANTEES OF
FRANCHISES WITH “IN LIEU OF ALL TAXES”
CLAUSES UNDER THIS SECTION ARE DEEMED
AMENDED OR REPEALED.

SEC. 37.

Title XII, entitled “Oversight Committee,” of the NIRC is

hereby renumbered as Title XIV and amended as follows:

SEC. [290] 307. Congressional Oversight Committee, ~ xxx

SEC. 38.

Repealing Clause. — (A) The following provisions, insofar as

they provide for tax and duty incentives, are hereby repealed:

Q)

Section 5 of Republic Act No. (R.A.) 9379, or “An Act

Defining Handline Fishing, Providing Effective Regulations
‘Therefor And For Other Purposes”;

(2) Section 16, The Last Sentence Thereof, of R.A. 10601,
or “An Act Promoting Agricultural And Fisheries
Mechanization Development In The Country”;

(3) Section 32 of R.A. 10654, or “An Act To Prevent,
Deter And Eliminate Illegal, Unreported And Unregulated
Fishing, Amending Republic Act No. 8550, Otherwise
Known As The Philippine Fisheries Code Of 1998, And For
Other Purposes”;

(4) Section 14 (B) of R.A. 7308, or “The Seed Industry
Development Act Of 1992”;

(5) Section 18, 2nd and 3rd Paragraph Thereof, of R.A.
7884, or “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”;

(6) Section 9 (E), (F), (1), and (J) of R.A. 7900, or “An Act
To Promote The Production, Processing, Marketing, And

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Distribution Of — High Value Crops, Providing Funds
Therefor, And For Other Purposes”;

(7) Chapter II, Article II, Sec. 35 (B), (C) and (D) of R.A.
8550, or “The Philippine Fisheries Code Of 1998”;

(8) Section 24 (A) and (F) of R.A. 10068, or “An Act
Providing For The Development And Promotion Of Organic
Agriculture In The Philippines And For Other Purposes”;

(9) Section 37 of R.A. 6848, or "The Charter Of The Al-
Amanah Islamic Investment Bank Of The Philippines";

(10) 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;”

(11) Section 15 of R.A. 7353, or The “Rural Bank Act Of
1992”;

(12) Book I, Title III, Article 39 (A), (B), (C), (D), (E), (G),
(D, (I), (K), (M) And (N); Title IV, Article 40, Book III
Article 59, 60, 61, Book IV Article 69, Book VI, Articles 77,
78, And 81 of Executive Order No. 226, Series of 1987, or
“The Omnibus Investments Code Of 1987”;

(13) Section 1 of R.A. 7918, “An Act Amending Article 39,
Title III The Omnibus Investments Code Of 1987, As
Amended”;

(14) Articles 62, 63, 64, 65, 66, 67 And 69 of R.A. 8756, or
“An Act Providing For The Terms, Conditions And Licensing
Requirements Of Regional Or Area Headquarters, Regional
Operating Headquarters, Regional Warehouses Of
Multinational Companies Amending For The Purpose Certain
Provisions Of The Omnibus Investment Code Of 1987”;

(15) Executive Order No. 22, s. of 2017 Amending E.O.

70, s. of 2012, E.O. 528, s. of 2006 and E.O. 313, s. of 2004,
Entitled “Reducing The Rates Of Duty On Capital

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Equipment, Spare Parts And Accessories Imported By BOI-
Registered New And Expanding Enterprises”;

(16) Section 12 of R.A. 8047, or “An Act Providing For The
Development Of The Book Publishing Industry Through The
Formulation And Implementation Of A National Book Policy
And A National Book Development Plan”;

(17) Section 17, In So Far As Tax Exemption and/or VAT
Zero Rating On Domestic Merchandise Is Concerned, and
Section 18 (A), (B), (C) and (F) of Presidential Decree No.
66, Entitled “Creating The Export Processing Zone Authority
And Revising Republic Act No. 5490”;

(18) Section 4 (E) and (F), In So Far As Tax Exemption
and/or VAT Zero Rating On Domestic Merchandise Is
Concerned, of R.A. 7903, or The “Zamboanga City Special
Economic Zone Act Of 1995”;

(19) Section 4 (B) (C), In So Far As Tax Exemption and/or
VAT Zero Rating On Domestic Merchandise Is Concerned, of
R.A. 7922, or “An Act Establishing A Special Economic
Zone And Free Port 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”;

(20) Section 4 of R.A. 8748, or “An Act Amending
Republic Act No. 7916, Otherwise Known As The Special
Economic Zone Act Of 1995”;

(21) Sections 23 and 24 of R.A. 7916, or “The Special
Economic Zone Act Of 1995”;

(22) Sections 12 (B) and (C) and Section 15, second, third,
and last paragraph of R.A. 7227, or “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,” as amended by R.A. 9400;



(23) Section 1 of E.O. 619, s. of 2017 Entitled “Creating
And Designating Special Economic Zones Pursuant To
Republic Act No. 7916, As 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”;

(24) Sections 5, 6, 7, 8 And 9 of R.A 9490, or “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”;

(25) Sections 3 (E) (F) (H) and 4 of R.A. No. 10083, or “An
Act Amending Republic Act No. 9490”;

(26) Section 4 (F), In So Far As Tax Exemption and/or
VAT Zero Rating On Domestic Merchandise and Capital
Equipment Are Concemed, and Sections 5, 6 and 10 of R.A.
9728, or The “Freeport Area Of Bataan (FAB) Act Of 2009”;

(27) Sections 12, 21, and 22 of P.D. 87 (Restored By FIRB
Resolution 19-87), or The “Oil Exploration And Development
Act”;

(28) P.D. 529 (Restored By FIRB Resolution 19-87),
Entitled “Granting To Petroleum Exploration Concessionaires
Under The Petroleum Act Of 1949 Exemption From Customs
Duty And Compensating Tax On Importations Of Machinery
And Equipment, Spare Parts And Materials Required For
Their Exploration Operations”;

(29) Section 16 (A), (B), and (C) and Section 17 (A) to (E)
of P.D. 972, or “The Coal Development Act Of 1976”;

(30) Section 4 (A) of P.D. 1442 (Restored By FIRB
Resolution 19-87), or “An Act To Promote The Exploration
And Development Of Geothermal Resources”;

(31) Section 10 (1) to (6) of R.A. 7156, or The “Mini-
Hydroelectric Incentive Act”;

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(32) Section 9 of R.A. 8479, or The “Downstream Oil
Industry Deregulation Act Of 1998”;

(33) Section 6, Fifth Paragraph of R.A. 9136, or the
“Electric Power Industry Reform Act Of 2001”;

(34) Chapter VII, Section 15 Except (H), Sections 19, 21
(A) to (D), and 23 of R.A. 9513, or “An Act Promoting The
Development, Utilization And Commercialization Of
Renewable Energy Resources And For Other Purposes”;

(35) Section 6 (A) (B) of R.A. 9367, or “An Act To Direct
The Use Of Biofuels, Establishing For This Purpose The
Biofuel Program, Appropriating Funds Therefore, And For
Other Purposes”;

(36) Sections 36 (E) and (F) of P.D. 705 Entitled, “Revising
P.D. 389, Or The ‘Revised Forestry Code Of The
Philippines”;

(37) Section 45 (b) (1) (c) of R.A. 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”;

(38) The Fiscal Incentives in Section 26 A (1) to (3) of R.A.
9275, or The “Philippine Clean Water Act Of 2004”;

(39) Sections 16 and 17 of R.A. 7844, or The “Export
Development Act Of 1994”;

(40) Section 13 of R.A. 10817, or “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
Purposes”;

(41) Section 14 of R.A. 8423, or “An Act Creating The
Philippine Institute Of Traditional And Alternative Health

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Care (PITAHC) To Accelerate The Development Of
Traditional And Alternative Health Care In The Philippines,
Providing For A Traditional And Alternative Health Care
Development Fund And For Other Purposes”;

(42) Section 20 (D) (1) to (5) of R.A. 10884, or “An Act
Strengthening The Balanced Housing Development Program,
Amending For The Purpose Republic Act No. 7279, Or ‘The
Urban Development And Housing Act Of 1992”;

(43) Section 10 of R.A. 7718, or “An Act Amending Certain
Sections Of R.A. 6957, Entitled ‘An Act Authorizing The
Financing, Construction, Operation And Maintenance Of
Infrastructure Projects By The Private Sector, And For Other
Purposes”;

(44) Section 6 (C) (D) (F) and Sections 7 and 8 of R.A.
7103, or “An Act To Strengthen The Iron And Steel Industry
And Promote Philippine Industrialization And For Other
Purposes”;

(45) Section 3 (A) to (D) and (H) of R.A. 8502, or “The
Jewelry Industry Development Act Of 1998”;

(46) Section 5 (A) (B) of R.A. 10771, or “An Act Promoting
The Creation Of Green Jobs, Granting Incentives And
Appropriating Funds Therefor”;

(47) Section 7-B (h) (10) of R.A. 6977 or the “Magna Carta
for Micro, Small and Medium Enterprises (MSMEs),” as
amended by R.A. 9501;

(48) Section 7 of R.A. 9178, or “An Act To Promote The
Establishment Of Barangay Micro Business Enterprises
(BMBES), Providing Incentives And Benefits Therefor, And
For Other Purposes”;

(49) Chapter XV, Section 83; Chapter XVI, Sections 90, 91,
92, 93 of R.A. 7942, or The “Philippine Mining Act Of
1995”;



-

1
3

(50) Chapter II, Section 4 and Chapter VIII, Section 19 of
R.A. 9295, or The “Domestic Shipping Development Act Of
2004”;

(51) Section 6 of R.A. 7471, As Amended, or The
“Philippine Overseas Shipping Development Act”;

(52) Subchapter V-A, Sections 86, 88, And 95 (A) and (B)
of R.A. 9593, or The “Tourism Act Of 2009”;

(53) Section 8, Second and Third Paragraphs Thereof, of
R.A. 10816, or “An Act Providing For The Development And
Promotion Of Farm Tourism In The Philippines”;

(54) Sections 8 and 9, In So Far As Tax Exemption and
VAT Zero Rating of Domestic Merchandise, of P.D. 538
Entitled, “Creating And Establishing The Phividec Industrial
Authority And Making It A Subsidiary Agency Of The
Philippine Veterans Development Corporation, Defining Its
Powers, Functions And Responsibilities, And For Other
Purposes”, as amended by P.D. No. 1491;

(55) Section 1 (1.1) of E.O. 97-A s. of 1993 Entitled,
“Further Clarifying The Tax And Duty-Free Privilege Within
The Subic Special Economic And Free Port Zone”;

(56) Section 4(F) and Section 5(C)(K), In So Far As Tax
Exemption and/or VAT Zero Rating on Domestic
Merchandise Is Concerned, and Section 12-B of Republic Act
No. 10083 Entitled, “An Act Amending Republic Act No.
9490, Or ‘The Aurora Special Economic Zone Act Of 2007”;

(57) Section 5 (5.1) and (5.2) of E.O. 290 Entitled,
“Implementing The Natural Gas Vehicle Program For Public
Transport”;

(58) Sections 18 and 20 of R.A. 6847 Entitled, “An Act
Creating And Establishing The Philippine Sports
Commission, Defining Its Powers, Functions, And
Responsibilities, Appropriating Funds Therefor, And For
Other Purposes”;

86



(59) Section 10 of P.D. 1174, Amending P.D. 972, or The
"Coal Development Act Of 1976";

(60) Section 23 of R.A. 7925, or “An Act To Promote And
Govern The Development Of Philippine Telecommunications
And Delivery Of Public Telecommunications Services”;

(61) Section 42 (C) of R.A. 7277, or “An Act Providing For
The Rehabilitation, Self-Development And Self-Reliance Of
Disabled Persons And Their Integration Into The Mainstream
Society And For Other Purposes”;

(B) Section 22 of R.A. 9337 is hereby repealed in relation to the
amendment of Section 119 of the NIRC as provided for in this Act.

(C) The provisions on Investment Priority Plan (IPP) under Chapter I,
Article 26 and Chapter II of E.O. 226 s. of 1987, or the “Omnibus
Investments Code of 1987,” are hereby repealed.

(D) All other laws, decrees, executive orders, rules and regulations, or
parts thereof which are contrary to or inconsistent with this Act.

SEC. 39. — Separability 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 affect, impair, or 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. 40. Implementing Rules and Regulations. — Within thirty (30)
days from the effectivity of this Act, the Secretary of Finance shall, upon
the recommendation of the Commissioner of Internal Revenue and
consultations with the Department of Trade and Industry, promulgate the
necessary rules and regulations for its effective implementation.

SEC. 41. Effectivity. - This Act shall take effect on January 1, 2019 or
fifteen (15) days following its publication in the Official Gazette or in a

newspaper of general circulation, whichever is earlier.

Approved,

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