FIFTEENTH CONGRESSS OF THE)
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES
H. Bill No. B46 5.

Introduced by Representative Henedina R. Abad,
Lone District of Batanes

Explanatory Note

‘This bill seeks to amend Sections 144, 145, 131 (Section A), 288 (Sections B and C) of the
National Revenue Code of 1997, as amended by R.A. 9334 to increase much-needed revenue as
well as control the social costs attributed to smoking.

‘The Philippines suffers from low tax effort. The country’s tax effort in 2009 fell below 13
percent and is recorded as the lowest in the ASEAN region for similarly situated countries. Low
taxes collected from tobacco products contribute to this persistent problem. RA 9334, which was
passed in 2004, failed to generate the desired amount of revenues as well as meet its sumptuary
objectives. The failure on both counts is due to structural flaws in the current system such as the
non-indexation of specific tax and non-reclassification of alcohol and tobacco products to reflect
current prices.

In addition to revenue generation, government also employs tax policies to affect the behavior of
producers and consumers as well as to control social costs or regulate activities that are likely to
cause negative externalities. Lowering cigarette and tobacco consumption through tax mi
is one of the Philippines’ obligations under the WHO Framework Convention on Tobacco
Control. Under Article 6(2)a), each party to the Convention shall implement “tax policies and,
where appropriate, price policies, so as to contribute to the health objectives aimed at reducing
tobacco consumption...” The Philippines signed the Convention on 23 September 2003, which
the Philippine Senate ratified it on April 25, 2005 by a unanimous vote. The treaty entered into
force on 27 February 2005.

Data from World Health Organization indicate that tobacco is the second major cause of death in
the world. Itis responsible for the death of one in ten adults worldwide (ie, about 5 million death
each year), The study likewise asserts that if current smoking patterns continue, it will cause
some 10 million deaths each year by 2020. Half the people that smoke today ~ that is about 650
million people ~ will eventually be killed by tobacco. The Philippines has the second highest
smoking prevalence rate in Southeast Asia. According to DOH, seven of the top ten causes of
mortality in the Philippines are smoking-related d The World Health Organization
(WHO) estimates in 2008 show that 35 percent of the Philippine population are smokers.



Smoking results in tremendous economic costs to Philippine society. According to the 2006
Tobacco and Poverty Study of the Department of Health, economic costs, which include health
care costs and productivity losses from death and discase related to four smoking-related
diseases (i.e. lung cancer, cerebro-vascular disease, coronary artery disease, chronic obstructive
pulmonary disease), range from US$ 2.86 to US$6.05 billion or PhP 148.47 to PhP314.38 billion.

The bill is designed to make the tax structure simple, effective and efficient to enhance revenue
generation as well as curb the consumption of tobacco. The main features of this bill are:

1, Provides for a unitary excise tax system for each category of tobacco products

2. Provides for the indexation of the tobacco excise tax to inflation to avoid erosion of

revenues by inflation

Removes the price classification freeze by repealing Annex D as provided in RA 9334

(Sin Tax Law of 2004)

4. Farmarks incremental revenues for universal health coverage, disease prevention, and
health promotion campaigns as well as support for tobacco farmers, whose livelihood
may be affected by the tax.

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

Lone District of Batanes.


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FIFTEENTH CONGRESSS OF THE)
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES
H.BIINo.__a gen

Introduced by Representative Henedina R. Abad,
Lone District of Batanes

AN ACT RESTRUCTURING THE EXCISE TAX ON TOBACCO PRODUCTS AND
AMENDING FOR THE PURPOSE PERTINENT SECTIONS OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED.

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

SECTION 1. Section144 of the National Internal Revenue Code of 1997, as
amended by Republic Act. No. 9334, is hereby further amended to read as.
follows
“Sec. 144. Tobacco Products. — There shall be collected a tax of [One
peso (P1.00)] TWO PESOS AND FIFTY CENTAVOS (P2.50) on each kilogram
of the following products of tobacco:
“(a) Tobacco twisted by hand or reduced into a condition to be consumed
in any manner other than the ordinary mode of drying and curing;
“(b) Tobacco prepared or partially prepared with or without the use of any
machine or instruments or without being pressed or sweetened except as
otherwise provided hereunder; and
~(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and
sweepings of tobacco except as otherwise provided hereunder.

“Stemmed leaf tobacco, tobacco prepared or partially prepared with or
without the use of any machine or instrument or without being pressed or
sweetened, fine-cut shorts and refuse, scraps, clippings, cuttings, stems, midribs,
and sweepings of tobacco resulting from the handling or stripping of whole leaf

tobacco shall be transferred, disposed of, or otherwise sold, without any


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prepayment of the excise tax herein provided for, if the same are to be exported
or be used in the manufacture of cigars, cigarettes, or other tobacco products on
which the excise tax will eventually be paid on the finished product, under such
conditions as may be prescribed in the rules and regulations promulgated by the
Secretary of Finance, upon the recommendation of the Commissioner.

“On tobacco specially prepared for chewing so as to be unsuitable for use
in any other manner, on each kilogram, [Seventy-nine centavos (P0.79)] ONE
PESO AND EIGHTY-SEVEN CENTAVOS (P 1.87).”

[‘The rates of tax imposed under this Section shall be increased by six
percent (6%) every two years starting on January 1, 2007 until January 1, 2011."]

PROVIDED, THAT, ON JANUARY 1, 2013 AND EVERY YEAR
THEREAFTER, THE EXCISE TAX RATES PRESCRIBED HEREIN SHALL BE
ADJUSTED ANNUALLY TO THEIR PRESENT VALUE USING THE
CONSUMER PRICE INDEX, AS PUBLISHED BY THE NATIONAL
STATISTICS OFFICE.

“Manufacturers and importers of tobacco products shall, within 30 days
from the effectivity of this Act and within the first (5) days of every month
thereafter, submit to the Commissioner a sworn statement of the volume of sales
for each particular brand of tobacco products sold [at their establishment] for the
three-month period immediately preceeding.

“Any manufacturer or importer who, in violation of this Section, knowingly
misdeclares and misrepresents in his or its sworn statement herein required any
pertinent data or information shall, upon discovery, be penalized by a summary
cancellation or withdrawal of his or its permit to engage in the business as
manufacturer or importer of cigar or cigarettes.

“Any corporation, association or partnership liable for any of the acts or
omissions in violation of this Section shall be fined treble the amount of
deficiency taxes, surcharges and interest which may be assessed pursuant to

this Section.


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“Any person liable for any of the acts and omissions prohibited under this
Section shall be criminally liable and penalized under Section 254 of this Code.
Any person who willfully aids or abets in the commission of any such act or
omission shall be criminally liable in the same manner as the principal.

“If the offender is not a citizen of the Philippines, he shall be deported
immediately after serving the sentence, without further proceedings for
deportation."

SECTION 2. Section 145 of the National Internal Revenue Code of 1997, as

56 amended by Republic Act. No. 9334, is hereby further amended to read As

57 follows:

58 “Sec. 145. Cigars and Cigarettes.

59 “(A) Cigars. — There shall be levied, assessed and collected on cigars [an
60 ad valorem tax based on the retail price] A TAX OF TWO HUNDRED PESOS
61 (P200.00) per cigar. [(excluding the excise tax and the value- added tax) in

62 accordance with the following schedule:]”

63 ['(1) If the net retail price per cigar is Five hundred pesos (P500) or
64 less, ten percent (10%); and]

65 ['(2) If the net retail price per cigar (excluding the excise tax and
68 the value-added tax) is more than Five hundred pesos (P500), Fifty pesos
67 (P50.00) plus fifteen percent (15%) of the net retail price in excess of Five
68 hundred pesos (P500.00).”]

69 PROVIDED, THAT, ON JANUARY 1, 2013 AND EVERY YEAR

70 THEREAFTER, THE EXCISE TAX RATE PRESCRIBED HEREIN SHALL BE
71 ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING THE CONSUMER
72 PRICE INDEX, AS PUBLISHED BY THE NATIONAL STATISTICS OFFICE.

73 “(B) Cigarettes Packed by Hand, — There shall be levied, assessed and
74 collected on cigarettes packed by hand a tax at the [rates prescribed below:]

75 RATE OF FOURTEEN PESOS (P14.00) PER PACK.”

76 ['Effective on January 1, 2005, Two pesos (P2.00) per pack:]


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['Effective on January 1, 2007, Two pesos and twenty-three centavos

(P2.23) per pack;]

[Effective on January 1, 2009, Two pesos and forty-seven centavos

(P2.47) per pack; and]

[Effective on January 1, 2011, Two pesos and seventy-two centavos

(P2.72) per pack]

PROVIDED, THAT, ON JANUARY 1, 2013 AND EVERY YEAR
THEREAFTER, THE EXCISE TAX RATE PRESCRIBED HEREIN SHALL BE
ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING THE CONSUMER
PRICE INDEX, AS PUBLISHED BY THE NATIONAL STATISTICS OFFICE.

“Duly registered or existing brands of cigarettes or new brands thereof
packed by hand shall only be packed in thirties. ANY BRAND PACKED BY
LESS THAN THIRTIES SHALL BE TREATED AS IF IT IS PACKED BY
THIRTIES AND SUBJECTED TO THE TAX PROVIDED HEREIN, WITHOUT
PREJUDICE TO OTHER ADMINISTRATIVE OR CRIMINAL PENALTIES THAT
MAY BE IMPOSED ON THE MANUFACTURER, IMPORTER AND
DISTRIBUTOR OF THE SAID BRAND.”

“(C) Cigarettes Packed by Machine. - There shall be levied, assessed
and collected on cigarettes packed by machine a tax at the rates prescribed
below:

EFFECTIVE ON JANUARY 1, 2012 -

(1) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND
THE VALUE-ADDED TAX) IS TEN PESOS (P10.00) AND BELOW PER PACK,
THE TAX SHALL BE FOURTEEN PESOS (P14.00) PER PACK;

(2) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND
THE VALUE-ADDED TAX) IS MORE THAN TEN PESOS (P10.00) PER PACK,
THE TAX SHALL BE TWENTY EIGHT PESOS AND THIRTY CENTAVOS
(P28.30) PER PACK;

EFFECTIVE ON JANUARY 1, 2013 —


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(1) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND
THE VALUE-ADDED TAX) IS TEN PESOS (P10.00) AND BELOW PER PACK,
THE TAX SHALL BE TWENTY-TWO PESOS (P22.00) PER PACK;

(2) IF THE NET RETAIL PRICE (EXCLUDING THE EXCISE TAX AND
THE VALUE-ADDED TAX) IS MORE THAN TEN PESOS (P10.00) PER PACK,
THE TAX SHALL BE THIRTY PESOS (P30.00) PER PACK;

EFFECTIVE ON JANUARY 1, 2014, THE TAX SHALL BE THIRTY
PESOS (P30.00) PER PACK, REGARDLESS OF THEIR RETAIL PRICE.

PROVIDED, THAT, ON JANUARY 1, 2015 AND EVERY YEAR
THEREAFTER, THE EXCISE TAX RATE PRESCRIBED HEREIN SHALL BE
ADJUSTED ANNUALLY TO ITS PRESENT VALUE USING THE CONSUMER
PRICE INDEX, AS PUBLISHED BY THE NATIONAL STATISTICS OFFICE.

ALL BRANDS OF CIGARETTES EXISTING IN THE MARKET AT THE
TIME OF THE EFFECTIVITY OF THIS ACT SHALL BE CLASSIFIED
ACCORDINGLY FOR THE PROPER DETERMINATION OF THE TAX
LIABILITY IN ACCORDANCE WITH THE SCHEDULE PROVIDED ABOVE.

(1) If the net retail price (excluding the excise tax and the value-added
tax is below Five pesos (P5.00) per pack, the tax shall be:]

[Effective on January 1, 2005, Two pesos (P2.00) per pack:]

['Effective on January 1, 2007,Two pesos and twenty-three centavos

(P2.23) per pack]

['Effective on January 1, 2009, Two pesos and forty-seven centavos

(P2.47) per pack; and]

['Effective on January 1, 2011,Two pesos and seventy-two centavos

(P2.72) per pack.)

['(2) If the net retail price (excluding the excise tax and the value-added

tax is Five pesos (P5.00) but does not exceed Six pesos and fifty centavos

(P6.50) per pack, the tax shall be:]

[Effective on January 1, 2005, Six pesos and thirty-five centavos (P6.35)


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per pack]
[Effective on January 1, 2007, Six pesos and seventy-four centavos
(P6.74) per pack]

['Effective on January 1, 2009, Seven pesos and fourteen centavos
(P7.14) per pack; and]

['Effective on January 1, 2011, Seven pesos and fifty-six centavos (P7.56)
per pack]

['(3) If the net retail price (excluding the excise tax and the value-added
tax exceeds Six pesos and fifty centavos (P6.50) but does not exceed Ten
pesos (P10.00) per pack, the tax shall be:]

[Effective on January 1, 2005, Ten pesos and thirty-five centavos
(P10.35) per pack:]

['Effective on January 1, 2007, Ten pesos and eighty-eight centavos
(P10.88) per pack]

['Effective on January 1, 2009, Eleven pesos and forty-three centavos
(P11.43) per pack; and]

['Effective on January 1, 2011, Twelve pesos (P12.00) per pack]

['() If the net retail price (excluding the excise tax and the value-added
tax is above Ten pesos (P10.00) per pack, the tax shall be:]

['Effective on January 1, 2005, Twenty-five pesos (P25.00) per pack:]
[Effective on January 1, 2007, Twenty-six pesos and six centavos
(P26.06) per pack:]

['Effective on January 1, 2009, Twenty-seven pesos and sixteen centavos
(P27.16) per pack; and)

['Effective on January 1, 2011, Twenty-eight pesos and thirty centavos
(P28.30) per pack.]

“Variants of existing brands and variants of new brands of cigarettes which

are introduced in the domestic market after the effectivity of this Act shall be

taxed under the proper classification thereof based on their suggested net retail


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initially validated net retail price against the net retail price as of the time of
revalidation in order to finally determine the correct tax bracket under which a
particular new brand of cigarettes shall be classified. [: Provided, however, That
brands of cigarettes introduced in the domestic market between January 1, 1997
and December 31, 2003 shall remain in the classification under which the Bureau
of Internal Revenue has determined them to belong as of December 31, 2003.
Such classification of new brands and brands introduced between January 1,
1997 and December 31, 2003 shall not be revised except by an act of Congress.]
“Net retail price’, as determined by the Bureau of Internal Revenue
through a price survey to be conducted by the Bureau of Internal Revenue itself,
or by the National Statistics Office when deputized for [the] this purpose by the
Bureau of Internal Revenue, shall mean the price at which at which the cigarette
is sold on retail in at least twenty (20) major supermarkets in Metro Manila (for
brands of cigarettes marketed nationally), excluding the amount intended to
cover the applicable excise tax and value-added tax. For brands which are
marketed only outside Metro Manila, the ‘net retail price’, shall mean the price at
which the cigarette is sold in at least five (5) major supermarkets in the region
excluding the amount intended to cover the applicable excise tax and the value-
added tax. THE MAJOR SUPERMARKETS SHALL BE THOSE WITH THE
HIGHEST TOTAL GROSS SALES IN METRO MANILA OR THE REGION, AS
THE CASE MAY BE, AS DETERMINED BY NATIONAL STATISTICS OFFICE.
[The classification of each brand of cigarettes based on the average
net retail price as of October 1, 1996, as set forth in Annex 'D’, including the
classification of brands for the same products which, although not set forth in
said Annex'D’, were registered and were being commercially produced and
marketed on or after October 1,1996, and which continue to be commercially
produced and marketed after the effectivity of this Act, shall remain in force until
revised by Congress.]

“Manufacturers and importers of cigars and cigarettes shall, within thirty


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(30) days from the effectivity of this Act, and within the first five (5) days of every
month thereafter, submit to the Commissioner a sworn statement of the volume
of sales for each particular brand of cigars and/or cigarettes sold [at his
establishment] for the three-month period immediately preceding.

“Any manufacturer or importer who, in violation of this Section, knowingly
misdeclares or misrepresents in his or its sworn statement herein required any
pertinent data or information shall, upon discovery, be penalized by a summary
cancellation or withdrawal of his or its permit to engage in business as
manufacturer or importer of cigars or cigarettes.

“Any corporation, association or partnership liable for any of the acts or
omissions in violation of this Section shall be fined treble the aggregate amount
of deficiency taxes, surcharges and interest which may be assessed pursuant to
this Section

“Any person liable for any of the acts or omissions prohibited under this
Section shall be criminally liable and penalized under Section 254 of this Code.
Any person who willfully aids or abets in the commission of any such act or
omission shall be criminally liable in the same manner as the principal

“If the offender is not a citizen of the Philippines, he shall be deported
immediately after serving the sentence, without further proceedings for
deportation.”

Section 3. Section 131, Subsection A of the National Internal Revenue Code of
1997, as amended by Republic Act. No. 9334, is hereby further amended to read as
follows

"SEC. 131. Payment of Excise Taxes on Imported Articles. —

"(A) Persons Liable. - Excise taxes on imported articles shall be paid by
the owner or importer to the Customs Officers, conformably with the regulations
of the Department of Finance and before the release of such articles from the
customs house, or by the person who is found in possession of articles which are

exempt from excise taxes other than those legally entitled to exemption.


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"In the case of tax-free articles brought or imported into the Philippines by
persons, entities, or agencies exempt from tax which are subsequently sold,
transferred or exchanged in the Philippines to non-exempt persons or entities,
the purchasers or recipients shall be considered the importers thereof, and shall
be liable for the duty and internal revenue tax due on such importation.

"The provision of any special or general law to the contrary
notwithstanding, the importation of cigars and cigarettes, distilled spirits,
fermented liquors and wines into the Philippines, even if destined for tax and
duty-free shops, shall be subject to all applicable taxes, duties, charges,
including excise taxes due thereon. This shall apply to cigars and cigarettes,
distilled spirits, fermented liquors and wines brought directly into the duly
chartered or legislated freeports of the Subic Special Economic and Freeport
Zone, created under Republic Act No. 7227; the Cagayan Special Economic
Zone and Freeport, created under Republic Act No. 7922; and the Zamboanga
City Special Economic Zone, created under Republic Act No. 7903, and such
other freeports as may hereafter be established or created by law: Provided,
further, That NOTHWITHSTANDING THE PROVISION OF REPUBLIC ACT
9593, THE importations of cigars and cigarettes, [distilled spirits, fermented
liquors and wines] made directly by a government-owned and operated duty-free
shop, like ONE OPERATED BY the Duty-Free Philippines [(DFP)]
CORPORATION, shall NOT be exempted from THE EXCISE TAX [all applicable
duties only]: Provided, still further, That such articles directly imported by a
government-owned and operated duty-free shop, [like the Duty-Free Philippines,]
shall be labeled ‘duty-free’ and ‘not for resale’: Provided, finally, That the removal
and transfer of tax and duty-free goods, products, machinery, equipment and
other similar articles other than cigars and cigarettes, distilled spirits, fermented
liquors and wines, from one freeport to another freeport, shall not be deemed an
introduction into the Philippine customs territory.

"Cigars and cigarettes, distilled spirits and wines within the premises of all


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duty-free shops which are not labeled as hereinabove required, as well as tax
and duty-free articles obtained from a duty-free shop and subsequently found in

a non-duty-free shop to be offered for resale shall be confiscated, and the

perpetrator of such non-labeling or re-selling shall be [punishable] penalized

under the applicable provisions of this Code.

"Articles confiscated shall be DESTROYED USING THE MOST
ENVIRONMENTALLY FRIENDLY METHOD AVAILABLE. [disposed of in
accordance with the rules and regulations to be promulgated by the Secretary of
Finance, upon recommendation of the Commissioners of Customs and Internal
Revenue, upon consultation with the Secretary of Tourism and the General
Manager of the Philippine Tourism Authority ]

"The tax due on any such goods, products, machinery, equipment or other
similar articles shall constitute a lien on the article itself, and such lien shall be
superior to all other charges or liens, irrespective of the possessor thereof.

"(B) Rate and Basis of the Excise Tax on Imported Articles. - Unless
otherwise specified, imported articles shall be subject to the same rates and
basis of excise taxes applicable to locally manufactured articles.”

Section 4. Section 288, subsections B and C of the National Internal Revenue
Code of 1997, as amended by Republic Act. No. 9334, is hereby further amended to
read as follows:

"(B) Incremental Revenues from Republic Act No. 8240. - Fifteen percent
(15%) of the incremental revenue collected from the excise tax on tobacco
products under R.A. No. 8240 shall be allocated and divided among the
provinces producing burley and native tobacco in accordance with the volume of
tobacco leaf production. The fund shall be exclusively utilized for programs [in
pursuit of the following objectives] TO PROMOTE ECONOMICALLY VIABLE
ALTERNATIVES FOR TOBACCO FARMERS AND WORKERS SUCH AS:

(1) PROGRAMS THAT WILL PROVIDE INPUTS, TRAINING, AND

OTHER SUPPORT FOR TOBACCO FARMERS, WHO SHIFT TO


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PRODUCTION OF AGRICULTURAL PRODUCTS OTHER THAN TOBACCO.

(2) PROGRAMS THAT WILL PROVIDE FINANCIAL SUPPORT TO
TOBACCO FARMERS WHO ARE DISPLACED OR WHO CEASED TO
PRODUCE TOBACCO VOLUNTARILY.

(3) COOPERATIVE PROGRAMS TO ASSIST TOBACCO FARMERS IN
DEVELOPING ALTERNATIVE PLANTING SYSTEMS, PLANTING
ALTERNATIVE CROPS OR IMPLEMENTING OTHER LIVELIHOOD
PROJECTS.

['(1) Cooperative projects that will enhance better quality of agricultural
products and increase income and productivity of farmers;"]

['(2) Livelihood projects, particularly the development of alternative
farming system to enhance farmer's income; and]

["() Agro-industrial projects that will enable tobacco farmers to be
involved in the management and subsequent ownership of projects, such as
post-harvest and secondary processing like cigarette manufacturing and by-
product utilization.]

"The Department of Budget and Management, in consultation with the
Oversight Committee created under said R.A. No. 8240, shall issue the
corresponding rules and regulations governing the allocation and disbursement
of this fund.”

"(C) Incremental Revenues from the Excise Tax on Alcohol and Tobacco
Products. —

"(1) FIVE PERCENT (5%) [Two and a half percent (2.5%)] of the
incremental revenue from the excise tax on alcohol and tobacco products starting
[January 2005] JANUARY 1, 2012 shall be remitted directly to the Philippine
Health Insurance Corporation (PHIC) for the purpose of meeting and sustaining
the goal of universal coverage of the National Health Insurance Program; and

"(2) FIVE PERCENT (5%) [Two and a half percent (2.5%)] of the

incremental revenue from the excise tax on alcohol and tobacco products starting


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[January 2005] JANUARY 1, 2012 shall be credited AUTOMATICALLY to the
* account of the Department of Health and constituted as a trust fund for its

[disease prevention program] HEALTH PROMOTION PROGRAMS

['The earmarking provided under this provision shall be observed for five
(5) years starting from January 2005."]

THE EARMARKS PROVIDED IN SUBSECTION C SHALL BE OVER
AND ABOVE THE ALLOCATIONS PROVIDED IN THE GENERAL
APPROPRIATIONS ACT.

THE EXPENDITURES MADE USING THE EARMARKS PROVIDED IN
SUBSECTIONS B AND C, SHALL BE REPORTED BY THE DEPARTMENT
OF BUDGET AND MANAGEMENT, PHIC, AND THE DEPARTMENT OF
HEALTH, AS THE CASE MAY BE, THROUGH THE OFFICIAL GAZETTE AND
THEIR RESPECTIVE WEBSITES. A COPY OF THE SAID REPORTS SHALL
ALSO BE SUBMITTED TO CONGRESS. PROVIDED, THAT SUCH REPORT
SHALL CONTAIN ITEMIZED AND DETAILED DESCRIPTION OF THE
SUCH EXPENDITURES. CONGRESS SHALL MAKE A REVIEW OF THESE
EARMARKS EVERY 5 YEARS HEREAFTER.

SECTION 5. Implementing Rules and Regulations - The Secretary of Finance
shall, upon the recommendation of the Commissioner of Internal Revenue, and in
consultation with the Department of Health, promulgate the necessary rules and
regulations for the effective implementation of this Act. The said rules and
regulations shall be promulgated at least 30 days before January 1, 2012.

SECTION 6. Separability Clause. - If any of the provisions of this Act is
declared invalid by a competent court, the remainder of this Act or any provision not
affected by such declaration of invalidity shall remain in force and effect.

SECTION 7. Repealing Clause. - All laws, decrees, ordinances, rules and
regulations, executive or administrative orders, and such other presidential
issuances as are inconsistent with any of the provisions of this Act are hereby

repealed, amended or otherwise modified accordingly.


367 SECTION 8. Effectivity. - This Act shall take effect on January 1, 2012.

368 Approved,

dents fy - Ob