Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

f™ ‘SEY d
i? RECEIVED 2
pera

TIME.

Seventeenth Congress
Third Regular Session

7982
HOUSE BILL NO.

Introduced by Representative JOEY SARTE SALCEDA

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

The passage of Republic Act No. 10963, or the Tax Reform for
Acceleration and Inclusion Act, made our personal income taxation
simple, fair, and efficient. To complete the administration’s fiscal
reform package, the corporate income tax and incentives must
likewise be made fair and efficient.

At present, our corporate income tax system is characterized by
a narrow base and a high rate of 30%, which is the highest in the
ASEAN region. Our investment tax incentive system, on the other
hand, is characterized by complexities and overly liberal mindset with
little regard to cost-efficiency and effectiveness. While the
importance of tax incentives is not denied, as it attracts investments,
addresses market failures, and pivots the state towards reaching its
full potential, it needs to be rationalized and disciplined to ensure that


“«

foregone revenues arising from its grant do not cost the government
more than the benefits these investments bring.

Hence, this bill seeks to lower the corporate tax rate, as well as
widen the corporate tax base and plug its tax leakages, through
rationalizing the administration of tax incentives, which shall be
performance-based, targeted, time-bound, and transparent.

With the tax incentives rationalized and the tax base expanded,
the corporate income tax rate that will now be reduced in order to
alleviate the burden of the majority of the business community —
notably the micro, small, and medium-size enterprises, who pay the
regular 30% income tax rate.

In view of the foregoing, the immediate passage of this bill is
earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Seventeenth Congress
Third Regular Session

HOUSE BILL NO. 7982

Introduced by Representative JOEY SARTE SALCEDA

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 (CITIRA).”

SEC. 2. Declaration of Policy. —\t 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.


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

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

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

ry SEC. 5-A. — POWER OF THE COMMISSIONER TO
8 ISSUE SUBPOENA DUCES TECUM; HOW
4 SERVICE OF SUBPOENA DUCES TECUM IS
5 MADE. — PURSUANT TO SECTION 5 OF THIS
6 CODE, IN CASE THE INFORMATION OR
9 RECORDS REQUESTED ARE NOT FURNISHED
8 WITHIN THE PERIOD PRESCRIBED IN THE
19 WRITTEN NOTICE, OR WHEN’ THE
20 INFORMATION OR RECORDS SUBMITTED ARE
INCOMPLETE, THE COMMISSIONER _ IS
2 AUTHORIZED TO ISSUE A SUBPOENA DUCES
a3 TECUM WHICH MUST SPECIFY WITH
24 REASONABLE DESCRIPTION THE BOOKS,
35 DOCUMENTS, OR THINGS REQUESTED,
26 STATING THEREIN THEIR RELEVANCE OR
2 MATERIALITY TO THE INQUIRY AND

28 IDENTIFYING THE TAXPAYER OR THIRD
29 PARTY/OFFICE IN POSSESSION, CUSTODY OR
30 CONTROL OF THE SAME.

2 THE SUBPOENA DUCES TECUM SHALL BE
33 SERVED BY THE REVENUE OFFICER
4 ASSIGNED TO INVESTIGATE THE CASE OR BY
35 ANY OTHER INTERNAL REVENUE OFFICER
36 AUTHORIZED FOR THE PURPOSE.


8

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 RITES 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:

SEC. 22. Definitions. — When used in this Title:
XXX

(I) THE TERM ‘CAPITAL EQUIPMENT


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 SHIPMENT
OF GOODS FROM THE PHILIPPINES TO A
FOREIGN COUNTRY BY AN EXPORT
ENTERPRISE;

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


OF DIRECT COSTS AND TO BE USED IN
THE AIRCRAFT OR SEACRAFT, AND
CAPITAL EQUIPMENT NEEDED FOR
SHIPPING OR AIR TRANSPORT
OPERATIONS;

(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 ENTERPRISES;

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

INTERNATIONAL TREATY;

(3) SERVICES FOR THE OVERHAUL,
REPAIR, AND MAINTENANCE OF
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,


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 UNDER
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 WITHIN
A SPECIFIC GEOGRAPHICAL AREA. AN
ECOZONE MAY CONTAIN ANY OR ALL OF
THE FOLLOWING: INDUSTRIAL ESTATES
(IES), EXPORT PROCESSING ZONES (EPZS),
ICT PARKS AND CENTERS, AND FREE TRADE
ZONES: PROVIDED, THAT AREAS WHERE


DETERMINED BY THE 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 UNLOADED FOR IMMEDIATE
TRANSSHIPMENT OR STORED, REPACKED,
SORTED, MIXED, OR OTHERWISE
MANIPULATED WITHOUT BEING 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.


1

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

[(©) 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 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


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, —

(A) In General. — Except as otherwise provided in this
Code, an income tax of [thirty-five percent (35%)]
THIRTY PERCENT (30%) is hereby imposed upon


Philippines: [Provided, That effective January 1, 2009,
the rate of income tax shall be thirty percent (30%).]
PROVIDED, THAT EFFECTIVE JANUARY 1,
2020, THE PRESIDENT, UPON THE
RECOMMENDATION OF THE SECRETARY OF
FINANCE, SHALL REDUCE THE RATE BY ONE
PERCENTAGE POINT WHEN THE RATIO OF
TAX EXPENDITURES TO GROSS DOMESTIC
PRODUCT (GDP) TWO (2) YEARS PRIOR THE
EFFECTIVITY OF THE NEW RATE IS REDUCED
BY AT LEAST FIFTEEN HUNDREDTH PERCENT
(0.15%): PROVIDED FURTHER, THAT THE RATE
SHALL BE FURTHER REDUCED BY ONE
PERCENTAGE POINT FOR EVERY
ADDITIONAL FIFTEEN-HUNDREDTH PERCENT
(0.15%) REDUCTION IN THE TAX
EXPENDITURES TO GDP RATIO: PROVIDED
FINALLY, THAT THE RATE SHALL NOT BE
LOWER THAN TWENTY-FIVE PERCENT (25%).

XXX

FOR PURPOSES OF THIS SECTION, SECTION 28
(A) (1) AND SECTION 28 (B), THE AMOUNT OF
TAX EXPENDITURES SHALL BE DETERMINED
THROUGH THE ANNUAL TAX EXPENDITURE
REPORT PREPARED BY THE DEPARTMENT OF
FINANCE AND SUBMITTED TO THE
DEPARTMENT OF BUDGET AND
MANAGEMENT, AS MANDATED BY REPUBLIC
ACT NO. 10708.

[Provided, further, That 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


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

IG) 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.]

[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


[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


[(D)] (©) xxx
[(E)] @) 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%)|
THIRTY PERCENT (30%) 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%).| PROVIDED, THAT EFFECTIVE JANUARY
1, 2020, THE PRESIDENT, UPON
RECOMMENDATION OF THE SECRETARY OF
FINANCE, SHALL REDUCE THE RATE BY ONE
PERCENTAGE POINT WHEN THE RATIO OF
TAX EXPENDITURES TO GROSS DOMESTIC
PRODUCT (GDP) TWO (2) YEARS PRIOR TO THE
EFFECTIVITY OF THE NEW RATE IS REDUCED
BY AT LEAST FIFTEEN-HUNDREDTH PERCENT
(0.15%): PROVIDED FURTHER, THAT THE RATE
SHALL BE FURTHER REDUCED BY ONE
PERCENTAGE POINT FOR EVERY ADDITIONAL

FIFTEEN-HUNDREDTH

PERCENT

THE

(0.15%)


[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.]

{1 © Tax on Certain Incomes Received by a
Resident Foreign Corporation. —

(a) Interest from Deposits and Yield or any other


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%]

(d) _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%)] THIRTY PERCENT (30%)
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


EFFECTIVE JANUARY 1, 2020, THE PRESIDENT,
UPON THE RECOMMENDATION OF THE
SECRETARY OF FINANCE, SHALL REDUCE
THE RATE BY ONE PERCENTAGE POINT
WHEN THE RATIO OF TAX EXPENDITURES TO
GROSS DOMESTIC PRODUCT (GDP) TWO (2)
YEARS PRIOR THE EFFECTIVITY OF THE NEW
RATE IS REDUCED BY AT LEAST FIFTEEN-
HUNDREDTH PERCENT (0.15%): PROVIDED
FURTHER, THAT THE RATE SHALL BE
FURTHER REDUCED BY ONE PERCENTAGE
POINT FOR EVERY ADDITIONAL FIFTEEN-
HUNDREDTH PERCENT (0.15%) REDUCTION IN
THE TAX EXPENDITURES TO GDP RATIO:
PROVIDED FINALLY, THAT THE RATE SHALL
NOT BE LOWER THAN TWENTY-FIVE
PERCENT (25%).

[(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.]

[(G) 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 Aircrafi,
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


(a) Interest on Foreign Loans, ~ xxx

(b) JIntercorporate 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%),]
FIFTEEEN PERCENT (15%), which represents the
difference between the regular income tax of [thirty-five
percent (35%)] THIRTY PERCENT (30%) 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 REMAIN [be] equivalent to fifteen percent (15%),
which represents the difference between the regular
income tax of thirty percent (30%) and the fifteen
percent (15%) tax on dividends|;]: PROVIDED
FURTHER, THAT THE ABOVE RATE SHALL BE
REDUCED BY ONE PERCENTAGE POINT FOR
EVERY ONE PERCENTAGE POINT REDUCTION
IN THE CORPORATE INCOME TAX RATE AS
PROVIDED IN SECTION 28 (B)(1) OF THIS
CODE.

(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


SEC. 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) Jn 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 28%, INTEREST EXPENSE
REDUCTION RATE IS 28%;

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

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). - \n 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
return such financial statements otherwise required under
this Code: Provided, further, That except when the
Commissioner otherwise permits, the said individual


the Secretary of Finance, upon, recommendation of the
Commissioner.

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

0 SEC. 40. Determination of Amount and Recognition of
" Gain or Loss. —

8 XXX
15 (C) Exchange of Property. —

7 (1) General Rule. — xxx

9 (2) Exception. — No gain or loss shall be recognized
5 [if] TO A CORPORATION OR ON ITS STOCK OR

SECURITIES IF SUCH CORPORATION IS A
PARTY TO A _ REORGANIZATION AND

23 EXCHANGES OF PROPERTY in pursuance of a plan
24 of [merger or consolidation] REORGANIZATION
35 SOLELY FOR STOCK OR SECURITIES IN
26 ANOTHER CORPORATION THAT IS A PARTY

TO THE REORGANIZATION.

29 A REORGANIZATION IS DEFINED AS:

a [(a) A corporation, which is a party to a merger or
ga consolidation, exchanges property solely for stock in a
33 corporation, which is a party to the merger or
34 consolidation; or]

36 [(b) A shareholder exchanges stock in a corporation,


1) 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


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


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 BUSINESS, 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 INTO
BY THE PERSON AFFECTED 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


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 ALTERING
THE INCIDENCE OF ANY INCOME TAX;

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

(C) DIRECTLY OR INDIRECTLY AVOIDING,
POSTPONING, OR REDUCING ANY LIABILITY
TO INCOME TAX, OR ANY POTENTIAL OR
PROSPECTIVE LIABILITY TO FUTURE
INCOME TAX.

THERE IS ‘TAX AVOIDANCE’ IN THE
AFOREMENTIONED INSTANCES, WHERE THE
TRANSACTION OR ARRANGEMENT _ IS
MOTIVATED BY OBTAINING TAX BENEFIT OR
ADVANTAGE WITH NO COMMERCIAL
REALITY OR ECONOMIC EFFECT AND THE
USE OF THE PROVISIONS OF THE TAXATION
LAW ON SUCH’ TRANSACTION OR
ARRANGEMENT WOULD NOT HAVE BEEN
THE INTENTION OF THE LAW.


, SEC. 13. Section 73 of the NIRC is hereby amended to read as

» follows:

3

4 SEC. 73. Distribution of Dividends or Assets by
5 Corporations. -st:

- (A) Definition of Dividends. - xxx

8

9 [Where a corporation distributes all of its assets in
10 complete liquidation or dissolution, the gain realized or

a loss sustained by the stockholder, whether individual or
s corporate, is a taxable income or a deductible loss, as the

ry case may be.]

4

5 (B) Stock Dividend. — xxx

v7 (C) LIQUIDATING DIVIDENDS. — LIQUIDATING
8 DIVIDENDS REPRESENTING THE REMAINING
19 GAINS REALIZED OR LOSS SUSTAINED BY
20 THE STOCKHOLDER IN A COMPLETE
2 LIQUIDATION OR _ DISSOLUTION BY A
22 CORPORATION.

33

24 (CQ) Dividends Distributed are Deemed Made
25 from Most Recently Accumulated Profits. — xxx

a [{)] (E) Net Income of a Partnership Deemed
28 Constructively Received by Partners. — Xxx

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

36 (A) Zero-rated or Effectively Zero-rated Sales. — Any


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
SECTION 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


1 (B) hereof: Provided, that should the commissioner find
2 that the grant of refund is not proper, the commissioner
3 must state in writing the legal and factual basis for the
4 denial.
5

6 In case of full or partial denial of the claim for tax refund
? OR TAX CREDIT, OR THE FAILURE ON THE
8 PART OF THE COMMISSIONER TO ACT ON
9 THE APPLICATION WITHIN THE PERIOD
10 PRESCRIBED ABOVE, the taxpayer affected may,
nm within thirty (30) days from the receipt of the decision
12 denying the claim OR AFTER THE EXPIRATION
13 OF THE ONE HUNDRED TWENTY _ DAY-

4 PERIOD, appeal the decision OR THE UNACTED
5 CLAIM with the Court of Tax Appeals: Provided,
16 however, that failure on the part of any official, agent, or
” employee of the BIR to act on the application within the
18 ninety (90)-day period shall be punishable under section
7 269 of this Code.

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

24 Sec. 119. Tax on Franchises. — Any provision of general
25 or special law to the contrary notwithstanding, there
26 shall be levied, assessed and collected in respect to all
7 EXISTING OR FUTURE franchise agreement or law
28 pertaining TO franchises on radio and/or television
29 broadcasting AND TELECOMMUNICATION

30 companies whose annual gross receipts of the preceding
33 year do not exceed Ten million pesos (P10,000,000.00),

32 subject to Section 236 of this Code, a FRANCHISE tax
33 of three percent (3%), and on gas and water utilities, a
“ FRANCHISE tax of two percent (2%) on the gross
35 receipts derived from the business covered by the law

36 granting the franchise: Provided, however, That radio


Provided, further, That once the option is exercised, said
option shall not be irrevocable.]

XXX

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

9 SECTION 119-A, FRANCHISES OF DOMESTIC
10 AIRLINES. — THE PROVISIONS OF P.D. NO. 1590
4" ON THE FRANCHISE TAX OF PHILIPPINE
2 AIRLINES, INC. R.A. NO. 7151 ON THE
iy FRANCHISE TAX OF CEBU AIR, INC., R.A. NO.
4 7583 ON THE FRANCHISE TAX OF ABOITIZ AIR
% TRANSPORT CORPORATION, R.A, NO. 7909 ON
w THE FRANCHISE TAX OF PACIFIC AIRWAYS
"7 CORPORATION, R.A. NO. 8339 ON THE
18 FRANCHISE TAX OF AIR PHILIPPINES, OR
19 ANY OTHER EXISTING OR FUTURE
FRANCHISE AGREEMENTS OR LAWS
PERTAINING TO A DOMESTIC AIRLINE TO
THE CONTRARY NOTWITHSTANDING:

24 (A) THE FRANCHISEE SHALL BE LIABLE TO
25 PAY A FRANCHISE TAX OF 3% OF GROSS
RECEIPTS DERIVED FROM TRANSPORT
a7 OPERATIONS;

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

33 (C) THE FRANCHISEE SHALL REGISTER FOR
a4 VALUE-ADDED TAX UNDER SECTION 236, AND
35 TO ACCOUNT UNDER TITLE IV OF THE
30 NATIONAL INTERNAL REVENUE CODE OF


(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.

SEC. 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.


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


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

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

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

SEC. 237. Issuance of Receipts or Sales or Commercial
Invoices. —

(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


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


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, 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 aboye 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


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.

IN YEAR ONE TO YEAR FOUR OF THE
IMPLEMENTATION PERIOD,A TAXPAYER
WHO ADOPTS THE REQUIRED SYSTEM SHALL
BE GRANTED A TAX 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


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

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

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

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

SEC, 255. Failure to File Return, Supply Correct and
Accurate Information, Pay Tax Withhold and Remit Tax
and Refund Excess Taxes Withheld on Compensation. —

Anv nereon reanined under this Cade ar hv miles and


accurate information, or withhold or remit taxes
withheld, or refund excess taxes withheld on
compensation, at the time or times required by law or
rules and regulations shall, in addition to other penalties
provided by law, upon conviction thereof, be punished
[by] WITH a fine of not less than [Ten thousand pesos
(P10,000)} ONE HUNDRED THOUSAND PESOS
(P100,000) and [suffer] imprisonment of not less than
one (1) year but not more than ten (10) years.

Any person who attempts to make it appear for any
reason that he or another has in fact filed a return or
statement, or 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. 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


SEC. 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)] 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

SEC. 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


SEC.

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. — \t 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 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.

SEC. 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


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.

SEC. 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 (P500,000) 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


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 (PS50,000)| 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] SEX (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.


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 Jone (1) year] TWO (2)
YEARS but not more than [two (2) years] FOUR (4)
YEARS.

XXX

SEC. 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.


SEC. 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 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

SEC. 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.

SEC. 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


[suffer] imprisonment of not more than [six (6) months}
TWO (2) YEARS, or both.

SEC. 35. A new Title on Tax Incentives is hereby inserted in the
NIRC as Title XII to read:

TITLE XII
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 UPON
EVALUATION AND REVIEW BY THE FISCAL
INCENTIVES 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 ENTERPRISES SHALL BE
APPLICABLE TO THE REGISTERED ACTIVITY


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. THESE IPAS INCLUDE THE BOARD OF
INVESTMENTS (BOI), PHILIPPINE ECONOMIC
ZONE AUTHORITY (PEZA), BASES
CONVERSION AND DEVELOPMENT
AUTHORITY (BCDA), SUBIC BAY
METROPOLITAN AUTHORITY (SBMA), CLARK
DEVELOPMENT CORPORTION (CDC), JOHN
HAY MANAGEMENT CORPORATION (JHMC),
PORO POINT MANAGEMENT CORPORATION
(PPMC), CAGAYAN ECONOMIC ZONE
AUTHORITY (CEZA), ZAMBOANGA CITY
SPECIAL ECONOMIC ZONE AUTHORITY
(ZCSEZA), PHIVIDEC INDUSTRIAL
AUTHORITY (PIA), AURORA PACIFIC
ECONOMIC ZONE AND FREEPORT
AUTHORITY (APECO), AUTHORITY OF THE
FREEPORT AREA OF BATAAN  (AFAB),
TOURISM INFRASTRUCTURE AND
ENTERPRISE ZONE AUTHORITY (TIEZA), AND
ALL OTHER SIMILAR AUTHORITIES THAT
MAY BE CREATED BY LAW IN THE FUTURE.

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. —


THOSE PERTAINING TO THE REVIEW AND
GRANT OF TAX INCENTIVES.

CHAPTER II
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 NOT
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.

(c) TAX ALLOWANCE FOR INVESTMENTS. - AN
ALLOWANCE OF UP TO FIFTY PERCENT (50%)
OF THE ACTUAL QUALIFIED CAPITAL
EXPENDITURE INCURRED WITHIN THREE (3)


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


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 REINVESTMENT
WAS OBTAINED BY THE REGISTERED
ENTERPRISE PLANNUNG SUCH
REINVESTMENT.

PROVIDED, THAT IN LIEU OF THE ITH UNDER


EXTENDED BEYOND THE INITIAL GRANT OF
FIVE (5) YEARS.

PROVIDED FURTHER, THAT SUPERIOR NON-
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
Il AND IV-A TO OTHER AREAS OF THE
COUNTRY MAY BE ALLOWED A ONE-YEAR
INCOME TAX INCENTIVE 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


(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 SLAUGHTERING, 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,

BOOKS, DIRECTORIES, MAGAZINES,
NEWSPAPERS, BROCHURES, PAMPHLETS,
MEDICAL RECORDS/FILES, LEGAL

RECORDS/FILES, INSTRUCTION MATERIALS,

ANT ND AWINGS BT NE DDINTO/ONTIINDS



CHAPTER Il
ADMINISTRATION OF TAX INCENTIVES

SEC. 293. EXPANDED FUNCTIONS OF THE
FISCAL INCENTIVES REVIEW BOARD, - THE
INCENTIVES PROVIDED IN SECTION 290 MAY
BE GRANTED BY 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

OP INVESTMENT TAY INCENTIVES AC


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 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 AS CHAIR AND
APPROVING HEAD OF THE FIRB AND
CUSTODIAN OF FISCAL PRUDENCE AND
RESPONSIBILITY, THE SECRETARY OF
FINANCE MAY CANCEL OR SUSPEND THE
GRANT OF INCENTIVES UPON THE REVIEW
AND RECOMMENDATION OF THE FIRB:
PROVIDED FINALLY, 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:


(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, AGENCIES AND
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


(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


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;

(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


YEARS SUBJECT TO REVIEW AND
AMENDMENT AS THE NEED ARISES.

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

(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:


(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) PROMOTION 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 FMPLOVMENT GENFRATION RFOUIRED


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 BOL.

PROVIDED, THAT THE PRESIDENT MAY, IN
THE INTEREST OF NATIONAL ECONOMIC
DEVELOPMENT AND UPON THE
RECOMMENDATION OF THE BOARD OF
INVESTMENTS AND THE ECONOMIC
MANAGERS, GRANT 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 DIRECT EMPLOYMENT

CENEDATION OF AT TRACT ANE THOTICAND


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
REQUIRE! ‘TS 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 SHAIT RF PIREISHED IN


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:

(1) 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,


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.

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


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 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


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:

(1) IF MADE TO ANOTHER ENTERPRISE
ENJOYING CUSTOMS DUTY EXEMPTION ON
IMPORTED CAPITAL EQUIPMENT AND/OR
SPARE PARTS;


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.


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:


(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

ASPSCEN TO WAVE REEN CDANTEN TO THE


THE FOREGOING IS WITHOUT PREJUDICE TO
THE AUTHORITY OF THE BIR TO CONDUCT
AUDIT AND IMPOSE PENALTIES UNDER THIS
CODE.

SEC. 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 read:

TITLE XI

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 GENERAL
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

NATION AT narmy anruoapiry TO


(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


(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 PHILIPPINES 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), (C), (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


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 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
PURPOSES;”

(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


(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.


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 REVENUES 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. 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


(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, LINES,
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, INC., A
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”;


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 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”;


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 GRANTING
BELL TELECOMMUNICATION PHILIPPINES,
INC., A FRANCHISE TO INSTALL, OPERATE,
AND MAINTAIN TELECOMMUNICATIONS
SYSTEMS THROUGHOUT THE PHILIPPINES
AND FOR OTHER PURPOSES”;

(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


(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”;

(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,


(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 MAINTAIN 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”;

(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


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


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 PURPOSES”;

(36) SECTION 7 OF REPUBLIC ACT NO. 8123


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
CONSTRUCT, INSTALL, OPERATE AND
MAINTAIN COMMERCIAL RADIO AND
TELEVISION BROADCASTING — STATIONS,


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
PURPOSES”;

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

A FANMeTREer omon.nr seararramr 4am


(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/ELECTR
ONIC 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


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*;


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 SERVICES WITHIN
THE PHILIPPINES AND INTERNATIONAL
POINTS, AND FOR OTHER PURPOSES”;

(86) SECTION 8 OF REPUBLIC ACT NO. 8153
ENTITLED “AN ACT GRANTING THE REX
ELECTRONICS COMMUNICATIONS SYSTEM,
INC., A FRANCHISE TO CONSTRUCT,
OPERATE AND MAINTAIN PUBLIC
RADIOTELEPHONE AND RADIOTELEGRAPH
STATIONS FOR THE RECEPTION AND
TRANSMISSION OF RADIOTELEPHONE AND
RADIOTELEGRAPH COMMUNICATIONS
WITHIN THE PHILIPPINES”;


(PRESENTLY KNOWN AS NOW TELECOM
COMPANY, INC.) UNDER REPUBLIC ACT NO.
7301, ENTITLED * AN ACT GRANTING
INFOCOM COMMUNICATIONS NETWORK,
INC. (ICNI), A FRANCHISE TO CONSTRUCT,
ESTABLISH, OPERATE AND MAINTAIN
MOBILE RADIO SYSTEMS SUCH AS RADIO,
PAGING SYSTEMS, CELLULAR PHONE
SYSTEMS, PERSONAL COMMUNICATION
NETWORK (PCN), AND TRUNKED RADIO
SYSTEMS WITHIN AND WITHOUT THE
PHILIPPINES FOR A PERIOD OF TWENTY-FIVE
(25) YEARS, AND FOR OTHER PURPOSES”, 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


SUG MEDIA CORPORATION OF THE
PHILIPPINES A FRANCHISE TO CONSTRUCT,
INSTALL, OPERATE AND MAINTAIN FOR
COMMERCIAL PURPOSES RADIO AND
TELEVISION BROADCASTING STATIONS IN
THE PHILIPPINES AND FOR OTHER
PURPOSES”.

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 XI, 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:

(1) 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 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


(9) Section 37 of R.A. 6848, or "The Charter Of The
AlL-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 Il, Article 39 (A), (B), (C), (D), (E),
(G), (1), (J), (K), (M) And (N); Title IV, Article 40, Book
Ill 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 | of R.A. 7918, “An Act Amending Article
39, Title II] 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.0. 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 Equipment, Spare Parts And Accessories
Imported By BOI-Registered New And Expanding


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


29

35

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 Concerned, 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”;


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

(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


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 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


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”;

(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) of E.0. 97-A s. of 1993 Entitled,
“Further Clarifying The Tax And Duty-Free Privilege
Within The Subic Special Economic And Free Port
Zone”;


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”;

(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.


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,