SIXTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
) 
Third Regular Session 
) 
"is Gel -7 
11)1 :20 
SENATE 
A 
s.No·-2987 
IdJl;J,,"UlllY:_-U::'-
(In substitution of H. No. 5713, taking into consideration S.B. No. 2749) 
Prepared by the Committees on Ways and Means; and Agriculture and Food 
with Senators Osmeiia, Angara, and Villar 
as authors thereof 
AN ACT 
AMENDING SECTION 109 (A) AND (F) OF THE NATIONAL INTERNAL 
REVENUE CODE, AS AMENDED BY REPUBLIC ACT NO. 9337, AND 
FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. Section 109 (A) of the National Internal Revenue Code, as amended, 
2 
is hereby further amended to read as follows: 
3 
"SEC. 109. Exempt Transactions. -
(1) Subject to the provisions of 
4 
subsection (2) hereof, the following transactions shall be exempt from the value-
5 
added tax: 
6 
(A) Sale or importation of agricultural and marine food products in their 
7 
original state, livestock and poultry of a kind generally used as, or yielding or 
8 
producing foods for human consumption; and breeding stock and genetic 
9 
materials therefor. 
10 
Products classified under this paragraph shall be considered in their original 
11 
state even if they have undergone the simple processes of preparation or 
12 
preservation for the market, such as freezing, drying, salting, broiling, 
13 
roasting, smoking or stripping. Polished andlor husked rice, corn grits, RAW 
14 
SUGAR OR raw cane sugar and molasses, ordinary salt and copra shall be 
15 
considered in their original state; 
16 
"FOR PURPOSES OF THIS SECTION, THE TERM 'RAW SUGAR' MEANS 
17 
SUGAR WHOSE CONTENT OF SUCROSE BY WEIGHT, IN THE DRY 
18 
STATE, CORRESPONDS TO A POLARIMETER READING OF LESS THAN 
1 


1 
99.5° AND THE TERM 'RAW CANE SUGAR' REFERS TO PARTIALLY 
2 
PURIFIED SUCROSE, WHICH IS CRYSTALLISED FROM PARTIALLY 
3 
PURIFIED CANE JUICE, WITHOUT FURTHER PURIFICATION, BUT 
4 
WHICH DOES NOT PRECLUDE CENTRIFUGATION OR DRYING, AND 
5 
WHICH IS CHARACTERIZED BY SUCROSE CRYSTALS COVERED WITH 
6 
A FILM OF CANE MOLASSES." 
7 
XXX 
8 
(F) Services by agricultural contract growers and milling for others of palay 
9 
into rice, com into grits and sugar cane into raw sugar OR RAW CANE 
W 
SUGAR: 
11 
SEC. 2. Implementing Rules and Regulations. - The Secretary of Finance, with the 
12 
recommendation of the Commissioner of Internal Revenue, shall issue the implementing 
13 
rules and regulations of this Act within ninety (90) days starting from the effectivity of this 
14 
Act. Provided, That the failure of the concerned agencies to promulgate the said rules and 
15 
regulations shall not prevent the implementation of this Act upon its effectivity. 
16 
SEC. 3. Repealing Clause. - All laws, acts, decrees, executive orders, issuances, 
17 
and rules and regulations or parts thereof which are contrary to and inconsistent with any 
18 
provision of this Act are hereby repealed, amended, or modified accordingly. 
19 
SEC. 4. Separability Clause. - If any provision of this Act is subsequently declared 
20 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
21 
effect. 
22 
SEC. 5. 
Effectivity. 
-
This Act shall take effect immediately after its complete 
23 
publication either in the Official Gazette or in a newspaper of general circulation in the 
24 
Philippines. 
25 
Approved, 
2