Republic of the Philippines
House of Representatives
Quezon City

First Regular Session

2956

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6 18TH CONGRESS
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9 HOUSE BILL NO.

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12 Introduced by Representative Michael L. Romero

16 EXPLANATORY NOTE

18 This bill covers the ‘second package of the Duterte Administration’s
19 comprehensive tax reform program. It complements the recently-passed Tax
20 Reform for Acceleration and Inclusion (TRAIN) Act (RA 10963) by lowering the
21 corporate income tax rate, reforming the corporate income tax system, and
22 broadening the tax base by modernizing investment tax incentives to enhance
23. fairness, improve competitiveness, plug tax leakages, and achieve fiscal
24 sustainability. ‘

26 Specifically, this bill endeavors to address the following major policy issues:

28 1. The Philippines’ corporate income tax system is characterized by a high
29 rate and a narrow base. Despite having the highest corporate income tax
30 rate in the ASEAN region at 30%, its collection efficiency is one of the
31 lowest. This is because of very generous tax incentives that are given in
32 perpetuity and in lieu of other taxes, and thus seriously erode the tax base.
33 2. The country’s investment tax incentive system is very complex. It has 14
34 investment promotion agencies and more than 300 laws that grant various
35 types of investment and non-investment incentives with little regard to
36 cost-efficiency and effectiveness. All these result in a tax incentive system
37 that is less transparent, less targeted, not time-bound, and not
38 performance based.

39 3. The outdated tax code lacks adequate provisions to address transfer
40 pricing and other anti-avoidance practices.

41 4. Ironically, the DOF, which is the steward of the government's fiscal health

2 and mandated to formulate sound fiscal policy, has very little involvement


Bemvausunn

in the formulation and grant of tax incentives to the registered business
enterprises. This is contrary to international best practice where the
finance minister holds a significant role in the decision making process
regarding the design and grant of tax incentives.

The cost to the country of this defective system is significant. In 2015, the
Department of Finance estimates that the investment tax incentive system costs
the government some P301 billion in forgone income tax, VAT (gross of refund),
and customs duty. This estimate does not yet include forgone local taxes and
leakages that arise from tax avoidance and tax evasion due to the complicated
system. While the country benefits from these incentives in terms of investment,
jobs, exports, and country-side development, the staggering cost at more than
2% of GDP warrants the government to review its incentives system by making
them time-bound, performance-based, transparent, and targeted to ensure that
redundant incentives are removed, the benefits fully outweigh the cost, and fiscal
prudence is maintained at all times.

Specifically, despite being the most generous provider of incentives in the region,
the Philippines’ investment tax incentives have not translated into much higher
investment and export performance. The Philippines has one of the lowest export
share to GDP among the ASEANS, while the share of foreign direct investment
to GDP, while increasing in recent years, remains lackluster relative to its
neighbors. The answer to this conundrum lies in the fact that investment and
exports are mainly influenced by a country’s ability to provide efficient
infrastructure, modern logistics, effective governance, low cost of doing business,
and a productive work force. In general, while some tax incentives can help the
country improve its competitiveness, they are not the real solution and they often
serve as band-aid solution to the ills of the country’s inability to provide
infrastructure and basic services. In this regard, the Duterte Administrations
seeks to reform the tax system so that it can generate more tax revenues fairly
to fund the priority programs that will make the country attractive to investors
without giving away redundant and costly tax incentives.

With tax incentives modernized and the tax base expanded, the corporate income
tax rate can be reduced to correct the current inequitable and unjust system
that benefits a few industries while negatively impacting the rest of the business
community, which pay the regular corporate income tax rate. The reduction of
the corporate income tax rate would be a very much welcome relief that will
benefit all corporate taxpayers, whether large or small, and whether domestic or
foreign, and will enhance the competitiveness of our investment climate. In the
end, this bill aims to benefit not just the government, but more importantly, the
Filipino taxpayers who have been diligently complying with their tax obligations
by making the tax system more progressive, efficient, and simpler.

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


LL. ROMERO Ph.D.


Republic of The Philippines
HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE Bill No. 2956

Introduced by Representative Michael L. Romero

AN ACT
AMENDING SECTIONS 4, 5, 20, 22, 25, 27, 28, 34, 40,
50, 73, 112, 117, 119, 203, 204, 222, 237, 237-A,
255, 256, 257, 258, 260, 261, 262, 263, 264, 265,
266, 275, 282, 290 AND ADDING SECTIONS 6-A AND
A NEW TITLE XIII UNDER THE NATIONAL INTERNAL
REVENUE CODE OF 1997, AS AMENDED, 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 Reform Act.”

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4 SEC. 2. Section 4 of the National Internal Revenue Code of 1997, as
5 amended, is hereby further amended to read as follows:
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“SEC. 4. Power of the Commissioner to Interpret Tax Laws and to
Decide Tax Cases. ~The power to interpret the provisions of the Code
9 and other tax laws shall be under the exclusive and original
10 jurisdiction of the Commissioner, subject to review by the Secretary
11 of Finance: PROVIDED, THAT THE POWER TO INTERPRET THE
12 PROVISIONS OF TITLE XIII OF THIS CODE, SHALL BE UNDER


THE EXCLUSIVE AND ORIGINAL JURISDICTION OF THE
SECRETARY OF FINANCE.

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4 The power to decide disputed assessments, refunds of internal
5 revenue taxes, fees or other charges, penalties imposed in relation
6 thereto, or other matters arising under this Code or other laws or
7 portions thereof administered by the Bureau of Internal Revenue is
8 vested in the Commissioner, subject to the exclusive appellate

9 jurisdiction of the Court of Tax Appeals.

10

4 SEC. 3. Section 5 of the National Internal Revenue Code of 1997, as
12 amended, is hereby further amended to read as follows:

13

14 “SEC. 5. Power of the Commissioner to Obtain Information and to
15 Summon, Examine, and Take Testimony of Persons. — In ascertaining
16 the correctness of any return, or in making a return when none has
7 been made, or ‘in determining the liability of any person for any
18 internal revenue tax, or in collecting any such liability, or in
19 evaluation tax compliance, the Commissioner is authorized:

20

21 (A) xxx

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23 (B) xxx

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25 (C) xxx

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27 (D) xxx; [ and ]

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29 (E) xxx; AND

30 .

31 (F) IN CASE THE INFORMATION OR RECORDS
32 REQUESTED ARE NOT FURNISHED WITHIN THE PERIOD
33 PRESCRIBED IN THE WRITTEN NOTICE, OR WHEN THE
34 INFORMATION OR RECORDS SUBMITTED ARE INCOMPLETE,
35 THE COMMISSIONER OR HIS DULY AUTHORIZED
36 REPRESENTATIVE, SHALL ISSUE A SUBPOENA DUCES TECUM
37 STATING THEREIN THE RELEVANT FACTS, SPECIFYING THE
38 PARTICULAR DOCUMENTS OR RECORDS NOT MADE
39 AVAILABLE AND THE TAXPAYER LIABLE OR THE THIRD
40 PARTY/OFFICE CONCERNED: PROVIDED, THAT INFORMATION
a OR RECORDS DULY RECEIVED OR ALREADY WITHIN THE
42 CUSTODY OF THE BUREAU, AS THEREAFTER DECLARED BY
43 THE PERSON SUBJECT OF THE SUBPOENA DUCES TECUM,

44 SHALL BE REMOVED THEREFROM.
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THE SERVICE OF A SUBPOENA DUCES TECUM SHALL BE

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2 EFFECTED BY THE REVENUE OFFICERS ASSIGNED TO
3 INVESTIGATE THE CASE. HOWEVER, SUCH SERVICE MAY BE
4 MADE BY ANY OTHER INTERNAL REVENUE OFFICER
5 AUTHORIZED FOR THE PURPOSE.

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7 THE SUBPOENA DUCES TECUM SHALL BE SERVED
8 PERSONALLY OR BY MAIL, OR IF NOT PRACTICABLE, IT SHALL
9 BE SERVED BY SUBSTITUTED SERVICE IN ACCORDANCE WITH

40 THE RULES OF THE COURT.

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12 A CRIMINAL ACTION SHALL BE INSTITUTED FOR
13 FAILURE TO OBEY THE SUBPOENA DUCES TECUM.

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15 BOOKS, RECORDS, AND DOCUMENTS SUBMITTED AS A
16 RESULT OF A SUBPOENA DUCES TECUM SHALL BE UNDER THE
7 CUSTODIANSHIP OF THE RECEIVING OFFICER WHO SHALL BE

18 RESPONSIBLE FOR ITS SAFEKEEPING AND PRESERVATION,

19 SUBJECT TO APPLICABLE RULES.

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21 SEC. 4. A new section shall be inserted as Section 6-A of the National

22 Internal Revenue Code of 1997, as amended, to read as foflows:

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24 “SEC. 6-A. - SERVICE OF LETTER OF AUTHORITY, AUDIT AND

25 ASSESSMENT NOTICES ISSUED BY THE BUREAU. - THE

28 NOTICE TO THE TAXPAYER HEREIN REQUIRED MAY BE

a7 SERVED BY THE COMMISSIONER OR HIS DULY AUTHORIZED

28 REPRESENTATIVE THROUGH PERSONAL SERVICE AT HIS

29 REGISTERED ADRESS. IN CASE PERSONAL SERVICE IS NOT

30 PRACTICABLE, THE NOTICE SHALL BE SERVED BY

31 SUBSTITUTED SERVICE IN ACCORDANCE WITH THE RULES OF

32 THE COURT.

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36 SEC. 5. Section 20 of the National Internal Revenue Code of 1997, as

36 amended, is hereby further amended to read as follows:

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38 “SEC. 20. Submission of Report and Pertinent Information by the
39 Commissioner. -

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41 (A) xxx *

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43 (B) SUBMISSION OF TAX-RELATED INFORMATION TO THE

44 DEPARTMENT OF FINANCE. - THE COMMISSIONER SHALL,

45 UPON THE REQUEST OF THE SECRETARY OF FINANCE

46 SPECIFICALLY IDENTIFYING THE NEEDED INFORMATION AND


JUSTIFICATION FOR SUCH REQUEST, FURNISH THE
SECRETARY PERTINENT TAXPAYER INFORMATION:
PROVIDED, HOWEVER, THAT THE SECRETARY AND THE
RELEVANT OFFICERS HANDLING SUCH SPECIFIC
INFORMATION SHALL BE COVERED BY THE PROVISIONS OF
SECTION 270, UNLESS TAXPAYER CONSENTS IN WRITING TO
‘SUCH DISCLOSURE.

I (8) 1 (C) Report to Oversight Committee. - The
Commissioner shall, with reference to Section 204 of this Code,
submit to the Oversight Committee referred to in Section 290 hereof,
through the Chairmen of the Committee on Ways and Means of the
Senate and House of Representatives, a report on the exercise of his
powers pursuant to the said Section, every six (6) months of each
calendar year.”

SEC. 6. Section 22 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

SEC. 22. Definitions. - xxx

*(A) xxx

(B) xxx

(C) xxx

(D) xxx

(E) The term ‘nonresident citizen’ means;

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

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

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

(4) A citizen who has been previously considered as
nonresident citizen and who arrives in the Philippines at any time


during the taxable year to reside permanently in the Philippines
shall likewise be treated as a nonresident citizen for the taxable year
in which he arrives in the Philippines with respect to his income
derived from sources abroad until the date of his arrival in the
Philippines. .

(5) The taxpayer shall submit proof to the Commissioner to
show his intention of leaving the Philippines to reside permanently
abroad or to return to and reside in the Philippines as the case may
be for purpose of this Section.

xxx.”

SEC. 7. Section 25 (A) (1) of the National Internal Revenue Code of 1997,
as amended, is hereby further amended to read as follows:

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

(A) Non-resident Alien Engaged in trade or Business Within the Philippines.

(1) Jn General. - A nonresident alien individual engaged in trade
or business in the Philippines shall be subject to an income
tax in the same manner as an individual citizep and a resident
alien individual, on taxable income received from all sources
within the Philippines. A nonresident alien individual who
shall come to the Philippines and stay therein for an aggregate
period of more than one hundred eighty THREE [(180)] (183)
days OR MORE during any calendar year shall be deemed a
‘nonresident alien doing business in the Philippines.’ Section
22 (G) of this Code notwithstanding.

SEC. 8. Section 27 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

“SEC. 27. Rates of Income tax on Domestic Corporations. -

(A) In General. - Except as otherwise provided in this Code, AN
INCOME TAX RATE OF PERCENT (30%), is hereby imposed upon
the taxable income derived during each taxable year from all sources
within and without the Philippines by every corporation, as defined
in Section 22(B) of this Code and taxable under this Title as a
corporation, organized in, or existing under the laws of the
Philippines: [ Provided, that effective January 1, 2009, the rate of
income tax shall be thirty percent (30%). ] PROVIDED, THAT THE


RATE OF CORPORATE INCOME TAX SHALL BE TWENTY EIGHT
PERCENT (28%) BEGINNING JANUARY 1, 2021; TWENTY SIX
PERCENT (26%) BEGINNING JANUARY 1, 2023; TWENTY FOUR
PERCENT (24%) BEGINNING JANUARY 1, 2025; TWENTY TWO
PERCENT (22%) BEGINNING JANUARY 1, 2027; AND TWENTY
PERCENT (20%) BEGINNING JANUARY 1, 2029. PROVIDED
FURTHER, THAT THE SCHEDULED DECREASE IN THE RATE
MAY BE SUSPENDED BY THE PRESIDENT UPON
RECOMMENDATION OF THE SECRETARY OF FINANCE IF THE
PROJECTED DEFICIT TARGET AS A PERCENT OF GDP
EXCEEDS THE PROGRAMMED DEFICIT, AS DETERMINED BY
THE DEVELOPMENT BUDGET COORDINATION COMMITTEE
(DBCC), IN THE PRECEEDING YEAR PRIOR TO THE
SCHEDULED REDUCTION IN THE CIT RATE, BASED ON THE
ANNUAL REVIEW OF THE MEDIUM TERM FISCAL PROGRAM.

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

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

[ 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 defined hereinafter the following conditions
have been satisfied:

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

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

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

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


(B) xxx
(C)xxx
(D) 2x .

(E) xxx

SEC. 9. Section 28 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

“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 PERCENT
(30%) [ thirty-five percent (35%) ] 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 THE RATE OF
CORPORATE INCOME TAX SHALL BE TWENTY EIGHT PERCENT
(28%) BEGINNING JANUARY 1, 2021; TWENTY SIX PERCENT
(26%) BEGINNING JANUARY 1, 2023; TWENTY FOUR PERCENT
(24%) BEGINNING JANUARY 1, 2025; TWENTY TWO PERCENT
(22%) BEGINNING JANUARY 1, 2027; AND TWENTY PERCENT
(20%) BEGINNING JANUARY 1, 2029. PROVIDED FURTHER,
THAT THE SCHEDULED DECREASE IN THE RATE MAY BE
SUSPENDED BY THE PRESIDENT UPON RECOMMENDATION OF
THE SECRETARY OF FINANCE IF THE PROJECTED DEFICIT
TARGET AS A PERCENT OF GDP EXCEEDS THE PROGRAMMED
DEFICIT, AS DETERMINED BY THE DECC, IN THE PRECEEDING
YEAR PRIOR TO THE SCHEDULED REDUCTION IN THE CIT
RATE, BASED ON THE ANNUAL REVIEW OF THE MEDIUM TERM
FISCAL PROGRAM.

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


Seoovounons

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

[ 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) xxx
(3) xxx

[ (4) Offshore Banking Units. - The provisions of any law to the
contrary notwithstanding, income derived by offshore banking units
authorized by the Bangko Sentral ng Pilipinas (BSP), from foreign
currency transactions with nonresidents, other offshore banking
units, local commercial banks, including branches of foreign banks
that may be authorized by the Bangko Sentral ng Pilipinas (BSP) to
transact business with offshore banking units shall be exempt from
all taxes except net income from such transactions as may be
specified by the Secretary of Finance, upon recommendation of the
Monetary Board’ which shall be subject to the regular income tax
payable by banks:. Provided, however, That any interest income
derived from foreign currency loans granted to residents other than
offshore banking units or local commercial banks, including local,
branches of foreign banks that may be authorized by the BSP to
transact business with offshore banking units, shall be subject only
to a final tax at the rate of ten percent (10%).

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

L (5) ] (4) 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.


Soeornonsons

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

[ (7) ] (8) Tax on Certain Incomes Received by a Resident
Foreign Corporation. —

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

[ 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 PERCENT (30%) [
thirty-five percent (35%) ] of the gross income received during each
taxable year from all sources within the Philippines, such as


interests, dividends, rents, royalties, salaries, premiums (except
reinsurance premiums), annuities, emoluments or other fixed or
determinable annual, periodic or casual gains, profits and income,
and capital gains, except capital gains subject to tax under
subparagraph 5 (c): [Provided, That effective January 1, 2009, the
rate of income tax shall be thirty percent (30%). ] PROVIDED, THAT
THE RATE OF CORPORATE INCOME TAX SHALL BE TWENTY
EIGHT PERCENT (28%) BEGINNING JANUARY 1, 2021; TWENTY
SIX PERCENT (26%) BEGINNING JANUARY 1, 2023; TWENTY
FOUR PERCENT (24%) BEGINNING JANUARY 1, 2025; TWENTY
TWO PERCENT (22%) BEGINNING JANUARY 1, 2027; AND
TWENTY PERCENT (20%) BEGINNING JANUARY 1, 2029.
PROVIDED FURTHER, THAT THE SCHEDULED DECREASE IN
THE RATE MAY BE SUSPENDED BY THE PRESIDENT UPON
RECOMMENDATION OF THE SECRETARY OF FINANCE IF THE
PROJECTED DEFICIT TARGET AS A PERCENT OF GDP
EXCEEDS THE PROGRAMMED DEFICIT, AS DETERMINED BY
THE DBCC, IN THE PRECEEDING YEAR PRIOR TO THE
SCHEDULED REDUCTION IN THE CIT RATE, BASED ON THE
ANNUAL REVIEW OF THE MEDIUM TERM FISCAL PROGRAM.

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

(3) xxx
(4) xx

(5) Tax on Certain Incomes Received by a Nonresident Foreign
Corporation. ~

(a) Interest on Foreign Loans. ~ xxx

(b) Intercorporate Dividends. - A final withholding tax at
the rate of fifteen percent (15%) is hereby imposed on the
amount of cash and/or property dividends received from a
domestic corporation, which shall be collected and paid as
provided in Section 57 (A) of this Code, subject to the
condition that the country in which the nonresident foreign
corporation is domiciled, shall allow a credit against the tax
due from the nonresident foreign corporation taxes deemed to
have been paid in the Philippines equivalent to [ twenty
percent (20%) ] FIFTEEN PERCENT (15%) which represents


the difference between the regular income tax [ of thirty-five
percent (35%) ] and the fifteen percent (15%) tax on dividends
as provided in this subparagraph: Provided, that EFFECTIVE
JANUARY 1, 2021, [ effective January 1, 2009 ], the credit
against the tax due shall be equivalent to [ fifteen percent
(15%), which represents ] the difference between the regular
income tax RATE [ of thirty percent (30%) ] and the fifteen
percent (15%) tax on dividends.

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

Not over P100,000 5%
On any amount in excess of P100,000 10% |”

SEC. 10. Section 34 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

“SEC. 34. Deductions from Gross Income. - Except for taxpayers
earning compensation income arising from personal services
rendered under an employer-employee relationship where no
deductions shall be allowed under this Section, in computing
taxable income subject to income tax under Sections 24 (A); 25 (A);
26; 27 (A), (B) and (C); and 28 (A) (1), there shall be allowed the
following deductions from gross income; .

(A) Expenses. -

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

Xxx
(2) xxx
(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%) JTHIRTY
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,
FURTHER, 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 RATE IS 28%, INTEREST EXPENSE REDUCTION RATE
IS 29%

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

IF RATE IS 24%, THE INTEREST EXPENSE REDUCTION
RATE IS 16%

IF RATE IS 22%, THE INTEREST EXPENSE REDUCTION
RATE IS 9%

IF RATE IS 20%, THE INTEREST EXPENSE REDUCTION
RATE IS 0% .

PROVIDED, FINALLY, THAT IF THE TAX ON INTEREST
INCOME IS ADJUSTED IN THE FUTURE, THE INTEREST
EXPENSE REDUCTION RATE SHALL BE ADJUSTED
ACCORDINGLY BASED ON THE PRESCRIBED STANDARD
FORMULA AS DEFINED IN THE RULES AND
REGULATIONS TO BE PROMULGATED BY THE
SECRETARY OF FINANCE, UPON THE
RECOMMENDATION OF THE COMMISSIONER.

(2) xxx
(C) Taxes. - xxx
(D) Losses. - xxx
(E) Bad Debts. — xxx
(F) Depreciation. - x0 .

(G) Depletion of Oil and Gas Wells and Mines. - xxx

(H) Charitable and Other Contributions. - xxx


() Research and Development. - xxx

(J) Pension Trusts. - xxx

(K) Additional Requirements for Deductibility of Certain Payments. -

(L) Optional Standard Deduction (OSD). - In lieu of the
deductions allowed under the preceding Subsections, an
individual subject to tax under Section 24, other than a
nonresident alien, [ may elect a standard deduction in an
amount not exceeding forty percent (40%) of his gross sales or
gross receipts, as the case maybe. In the case of a] AND A
corporation CLASSIFIED AS MICRO, SMALL OR MEDIUM-
SIZED ENTERPRISE (MSME) AS DETERMINED BY THE
DEPARTMENT OF TRADE AND INDUSTRY AND subject to
tax under Sections 27(A) and 28 (A)(1), [ it ] may elect a
standard deduction in an amount not exceeding 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 shall keep such records
pertaining to his gross sales or gross receipts, or the said
corporation shall keep such records pertaining to his gross
income as defined in Section 32 of this Code during the
taxable year, as may be required by the rules and regulations
promulgated by the Secretary of Finance, upon,
recommendation of the Commissioner.

Notwithstanding the provision of the preceding Subsections,
the Secretary of Finance, upon recommendation of the
Commissioner, after a public hearing shall have been held for this
purpose, may prescribe by rules and regulations, limitations or
ceilings for any of the itemized deductions under Subsections (A) to
(J) of this Section: Provided, That for purposes of determining such
ceilings or limitations, the Secretary of Finance shall consider the
following factors: (1) adequacy of the prescribed limits on the actual



expenditure requirements of each particular industry; and (2)effects
of inflation on expenditure levels: Provided, further, That no ceilings
shall further be imposed on items of expense already subject to
ceilings under present law.” .

SEC. 11. Section 40(C)(2) of the National Internal Revenue Code of 1997,
as amended, is hereby further amended to read as follows:

“SEC. 40. Determination of Amount and Recognition of Gain or Loss.
(A)x xx
(B)xx

(C) Exchange of Property. —
(1) xxx

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

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

(b) [ A shareholder exchanges stock in a
corporation, which is a party to the merger or
consolidation, solely for the stock of another
corporation also a party to the merger or
consolidation; or ] 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) [ 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. ] THE
ACQUISITION BY ONE CORPORATION, IN
EXCHANGE SOLELY FOR ALL OR A PART OF
ITS VOTING STOCK OR IN EXCHANGE
SOLELY FOR ALL OR A PART OF THE VOTING
STOCK OF A CORPORATION WHICH IS IN
CONTROL oF THE ACQUIRING
CORPORATION, OR SUBSTANTIALLY ALL OF
THE PROPERTIES OF ANOTHER
CORPORATION, BUT IN DETERMINING
WHETHER THE EXCHANGE IS SOLELY
FOR STOCK THE ASSUMPTION BY THE
ACQUIRING CORPORATION OF A LIABILITY
OF THE OTHER SHALL BE DISREGARDED;

{D) A RECAPITALIZATION; OR
(E) A REINCORPORATION

No gain or loss shall also be recognized if property is
transferred to a corporation by a person 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 | AND,
IMMEDIATELY AFTER, SUCH PERSON OR PERSONS ARE IN
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.

THE PROVISION OF SECTION 50 OF THIS CODE SHALL
BE APPLIED AND ENFORCED IN CASES WHERE THE
TRANSACTION OR ARRANGEMENT ENTERED INTO IS FOUND


TO BE NOT FOR LEGITIMATE OR BONA FIDE BUSINESS
PURPOSE.

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).

XXX”

SEC. 12. Section 50 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

“SEC. 50.[ Allocation of Income and Deductions. In the case of
two or more organizations, trades or businesses (whether or not
incorporated and whether or not organized in the Philippines) owned
or controlled directly or indirectly by the same interests, the
Commissioner is authorized to distribute, apportion or allocate
gross income or deductions between or among such organization,
trade or business, if he determined that such distribution,
apportionment or allocation is necessary in order to prevent evasion
of taxes or clearly to reflect the income of any such organization,
trade or business. ] 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 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 ORGANIZATIONS,
TRADES OR BUSINESSES, 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 WHERE THE TRANSACTION OR
ARRANGEMENT IS MOTIVATED BY OBTAINING TAX BENEFIT
OR ADVANTAGE WITH NO COMMERCIAL REALITY OR
ECONOMIC EFFECT, SUCH AS (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; OR (C)


DIRECTLY OR INDIRECTLY AVOIDING, POSTPONING, OR
REDUCING ANY LIABILITY TO INCOME TAX, OR ANY
POTENTIAL OR PROSPECTIVE LIABILITY TO FUTURE INCOME
TAX, THEN THE COMMISSIONER IS AUTHORIZED TO
DISREGARD AND CONSIDER SUCH TRANSACTION OR
ARRANGEMENT AS VOID FOR INCOME TAX PURPOSES, AND
MAY ADJUST THE TAXABLE INCOME OF A PERSON AFFECTED
BY THE ARRANGEMENT IN A WAY THE COMMISSIONER DEEMS
APPROPRIATE, IN ORDER TO COUNTERACT A TAX
ADVANTAGE OBTAINED BY THE PERSON FROM OR UNDER
THE ARRANGEMENT.

SEC. 13. Sec. 73 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

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

{A) Definition of Dividends. -The term ‘dividends'when used in
this Title means any distribution made by a corporation to its
shareholders out of its earnings or profits and payable to its
shareholders, whether in money or in other property.

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

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

(C) LIQUIDATING DIVIDENDS. - LIQUIDATING DIVIDENDS
ARE DIVIDENDS REPRESENTING THE REMAINING GAINS
REALIZED OR LOSS SUSTAINED BY THE STOCKHOLDER IN A
COMPLETE LIQUIDATION OR _ DISSOLUTION BY A
CORPORATION AND SHALL BE CONSIDERED AS TAXABLE
INCOME OR A DEDUCTIBLE LOSS, AS THE CASE MAY BE.


[ (C) ] (P) Dividends Distributed are Deemed Made from Most
Recently Accumulated Profits. - Any distribution made to the
shareholders or members of a corporation shall be deemed to have
been made from the most recently accumulated profits or surplus,
and shall constitute a part of the annual income of the distributee
for the year in which received.

[ (D) 1 (E) Net income of a Partnership Deemed Constructively
Received by Partners. -The taxable income declared by a partnership
for a taxable year which is subject to tax under Section 27 (A) of this
Code, after deducting the corporate income tax imposed therein,
shall be deemed to have been actually or constructively received by
the partners in the same taxable year and shall be taxed to them in
their individual capacity, whether actually distributed or not.”

SEC. 14. Sec. 112 (A) (B) of the National Internal Revenue Code of 1997,
as amended, is hereby further amended to read as follows:

“SEC. 112. Refunds [ or Tax Credits ] of Input Tax. -—

"(A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-
registered person, whose sales are zero-rated or effectively zero-
rated may, within two (2) years after the close of the taxable quarter
when the sales were made, apply for [ the issuance of a tax credit
certificate or ] refund of creditable input tax due or paid attributable
to such sales, except transitional input tax, to the extent that such
input tax has not been applied against output tax: Provided,
however, That in the case of zero-rated sales under Section
106(A)(2)(a)(1) ,(2) and [ (b) ] and Section 108 (B)(1) and (2), the
acceptable foreign currency exchange proceeds thereof had been
duly accounted for in accordance with the rules and regulations of
the Bangko Sentral ng Pilipinas (BSP): Provided, further, That 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]

SEC. 15. SEC.’ 117 of the National Internal Revenue code of 1997, as
amended, is hereby amended to read as follows:

“SEC 117. Percentage Tax on Domestic Carriers and Keepers of
Garages. -Cars for rent or hire driven by the lessee; transportation
contractors, including persons who transport passengers for hire,
and other domestic carriers by land for the transport of passengers
(except OWNERS/OPERATORS OF TRICYCLES OPERATING NOT
MORE THAN TWO (2) UNITS, owners of bancas, and owners of
animal-drawn two-wheeled vehicle), and keepers of garages shall
pay a tax equivalent to three percent (3%) of their quarterly gross
receipts.
Xxx” .
SEC. 16. Sec. 119 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“SEC. 119. Tax on Franchises. - Any provision of general or special
law to the contrary notwithstanding, there shall be levied, assessed
and collected in respect to all EXISTING franchise agreement or law
pertaining TO franchises on radio and/or television broadcasting
companies [whose annual gross receipts of the preceding year do not
exceed Ten million pesos (P10,000,000.00) ], subject to Section 236
of this Code, a FRANCHISE tax of three percent (3%) and on gas
and water utilities, a FRANCHISE tax of two percent (2%) on the
gross receipts derived from the business covered by the law granting
the franchise: Provided, however, That radio and/OR television
broadcasting companies referred to in this Section shall [ have an
option to] be registered as a value-added taxpayer and pay the tax
due thereon [ : Provided, further, That once the option is exercised,
said option shall not be irrevocable }.
xxx” .
SEC. 17, Sec. 203 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“SEC. 203. Period of Limitation Upon Assessment and Collection. -
Except as provided in Section 222, internal revenue taxes “Except
as provided in Section 222, internal revenue taxes shall be assessed
within [three (3)] FIVE (8) years after the last day prescribed by law
of the filing of the return, and no proceeding in court without
assessment for the collection of such taxes shall be begun after the


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expiration of such period: Provided, That in a case where a return
is filed beyond the period prescribed by law, the [three (3)] FIVE (5)
year period shall be counted from the day the return was filed. For
purposes of this Section, a return filed before the last day
prescribed by law for the filing thereof shall be considered filed on
such last day.”

SEC. 18. Sec. 204 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“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:

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

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

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

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

For other cases, a minimum compromise rate equivalent to forty
percent (40%Jof the basic assessed tax.

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

xxx”

SEC. 19. Sec. 222 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“SEC. 222. Exceptions as to Period of Limitation of 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 its assessment after such time,
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 JAPPLICATION made
before the expiration of the period previously [ agreed upon
JAPPLIED FOR.

Xxx”

SEC. 20. Sec. 237 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“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 date, the Bureau shall require taxpayers engaged in the
export of goods and service, taxpayers engaged in e-commerce, and
taxpayers under the jurisdiction of the Large Taxpayers Service to
issue AND TRANSMIT electronic receipts or sales or commercial
invoices [ in lieu of manual receipts or sales or commercial invoices
JTHRU DESIGNATED ELECTRONIC CHANNELS WITH A PUBLIC
CERTIFICATION SYSTEM ACCREDITED BY THE BUREAU,
subject to the rules and regulations to be issued by the Secretary of
Finance upon recommendation of the Commissioner [ and after a ]
following a public hearing { shall have been ] held for this purpose:
Provided, That taxpayers not covered by the mandate of this
provision may issue electronic receipts of sales or commercial
invoices in lieu of manual receipts or sales or commercial invoices.
PROVIDED FURTHER, SUBJECT TO THE RULES AND
REGULATIONS TO BE ISSUED BY THE SECRETARY OF
FINANCE, THE COMMISSIONER MAY REQUIRE ANY TAXPAYER
TO COMPLY WITH THE PROVISIONS OF THIS SECTION.

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)] FIVE (5) 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
above stated] BEARING THE APPROVED ELECTRONIC TAX
‘TRANSACTION NUMBER SHALL BE SUFFICIENT COMPLIANCE.

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

SEC. 21. Sec. 237-A of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“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 THROUGH THE DESIGNATED
ELECTRONIC CHANNELS OF THE BUREAU IN THE FORMAT
REQUIRED| electronically report their sales data to the Bureau of
through the use of electronic point of sales systems, ] subject to the
rules and regulations to be issued by the Secretary of Finance upon
recommendation of the Commissioner of Intérnal Revenue:
Provided, That the POINT OF SALE (POS) machines, VALUE
ADDED NETWORK (VAN) TERMINALS, fiscal devices, and fiscal
memory devices WITH CAPACITY TO MAKE SUCH
TRANSMISSION shall be at the expense of the taxpayers:
PROVIDED, FURTHER, 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.

IN YEAR ONE TO YEAR FOUR OF THE IMPLEMENTATION
PERIOD, A TAXPAYER WHO ADOPTS THE REQUIRED SYSTEM
SHALL BE GRANTED A TAX CREDIT OF 0.1% OF THE
PURCHASE VALUE, NET OF VALUE ADDED TAX, FOR EVERY
ELECTRONIC RECEIPT OR SALE OR COMMERCIAL INVOICE
TRANSMITTED THROUGH THE DESIGNATED ELECTRONIC


CHANNELS OF THE BUREAU AND ISSUED AN ELECTRONIC TAX
‘TRANSACTION NUMBER. .

4
2
3
4 IN SUPPORT OF THE ELECTRONIC SALES REPORTING
5 SYSTEM, THE BUREAU OF INTERNAL REVENUE MAY GRANT
6 TAX INCENTIVES FOR ELECTRONICALLY TRACEABLE
7 PAYMENTS (ETP) IN THE FORM OF ALLOWABLE DEDUCTIBLE
8 EXPENSE OF UP TO 10% OF THE ETP MADE BY THE

9 TAXPAYER. AN ANNUAL LIMIT ON THE ALLOWED ETP
10 DEDUCTIBLE EXPENSE PER TAXPAYER MAYBE SET BY THE
1 COMMISSIONER WITH THE APPROVAL OF THE SECRETARY OF
12 FINANCE.

13

14 ELECTRONICALLY TRACEABLE PAYMENTS REFER TO CREDIT
15 CARD, DEBIT CARD, OR OTHER METHODS OF PAYMENT WITH
16 A SYSTEM TO VERIFY OR LINK THE PAYMENT TO THE
17 IDENTITY OF PAYOR.

18

19 THE BUREAU MAY LIKEWISE ESTABLISH A RECEIPT AND
20 INVOICE LOTTERY PROGRAM FOR ELECTRONIC RECEIPTS OR
24 SALES OR COMMERCIAL INVOICES TRANSMITTED THROUGH
22 THE DESIGNATED ELECTRONIC CHANNELS OF THE BUREAU
23 AND ISSUED AN ELECTRONIC TAX TRANSACTION NUMBER.

24

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

30

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

36

36 SEC. 22. Sec. 255 of the National Internal Revenue Code of 1997, as
37 amended, is hereby amended to read as follows:

38

39 “SEC. 255. Failure to File Return, Supply Correct and Accurate
40 Information, Pay Tax Withhold and Remit Tax and.Refund Excess
a Taxes Withheld on Compensation. - Any person required under this
42 Code or by rules and regulations promulgated thereunder to pay any
43 tax make a return, keep any record, or supply correct the accurate
44 information, who willfully fails to pay such tax, make such return,
45 keep such record, or supply correct and accurate information, or

46 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 a fine of not less than [Ten
thousand pesos (P10,000) ] ONE HUNDRED THOUSAND
(P100,000) BUT NOT MORE THAN ONE MILLION TWO HUNDRED
THOUSAND PESOS (P1,200,000) 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 a fine of not less
than [ Ten thousand pesos (P10,000) but not more than Twenty
thousand pesos (P20,000) ] ONE HUNDRED THOUSAND PESOS
(P 100,000) BUT NOT MORE THAN ONE MILLION TWO HUNDRED
THOUSAND PESOS (P1,200,000) and suffer imprisonment of not
less than one (1) year but not more than three (3) years.”

SEC. 23. Sec. 256 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“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 a fine of not less than [Fifty thousand pesos (P50,000)
but not more than One hundred thousand pesos (P100,000)] TWO
HUNDRED THOUSAND PESOS (P200,000) BUT NOT MORE THAN
TWO MILLION FOUR HUNDRED THOUSAND PESOS
(P2,400,000).”

SEC. 24. Sec. 257 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

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

(A) Any financial officer or independent Certified Public Accountant
engaged to examine and audit books of accounts of taxpayers under
Section 232 (A) and any person under his direction who:

(1) Willfully falsifies any report or statement bearing on any
examination or audit, or renders a report, including exhibits,


statements, schedules or other forms of accountancy work
which has not been verified by him personally or under his
supervision or by a member of his firm or by a member of his
staff in accordance with sound auditing practices; or

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

(B) Any person who:

(1) Not being an independent Certified Public Accountant
according to Section 232(B) or a financial officer, examines
and audits books of accounts of taxpayers; or

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

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

(4) Knowingly makes any false entry or enters any false or
fictitious name in the books of accounts or record mentioned
in the preceding paragraphs; or

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

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

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

(8) Willfully attempts in any manner to evade or defeat any tax
imposed under this Code, or knowingly uses fake or falsified
revenue official 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 a fine not
less than [Fifty thousand pesos (P50,000) but not more than
One hundred thousand pesos (P100,000)] THREE HUNDRED
THOUSAND PESOS (P300,000) BUT NOT MORE THAN ONE
MILLION TWO HUNDRED THOUSAND PESOS (P1,200,000)
and suffer imprisonment of not less than two (2) years but
not more than six (6) years.

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

In the case of foreigners, conviction under this Code shall result in
[his] THEIR immediate deportation after serving sentence, without
further proceedings for deportation.”

SEC. 25. Sec. 258 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“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 a fine of not less than —[
Five thousand pesos (P5,000) but not more than Twenty thousand
pesos (P20,000) ] FIFTY THOUSAND PESOS (P50,000) BUT NOT
MORE THAN THREE HUNDRED THOUSAND PESOS (P300,000)
and suffer imprisonment of not less than six (6) months but not
more than two (2) years: Provided, That in the case of a person
engaged in the business of distilling, rectifying, repacking,
compounding or manufacturing any article subject to excise tax, he
shall, upon conviction for each act or omission, be punished by a
fine of not less than [ Thirty thousand pesos (P30,000) but not more
than Fifty thousand pesos (P50,000) ] THREE HUNDRED
THOUSAND PESOS (P300,000) BUT NOT MORE THAN SEVEN
HUNDRED THOUSAND PESOS (P700,000) and suffer
imprisonment of not less than two (2) years but not more than four
(4) years.”

SEC. 26. Sec. 260 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

“SEC. 260. Unlawful Possession of Cigarette Paper in Bobbins or
Rolls, Etc. - It shall be unlawful for any person to have in his
possession cigarette paper in bobbins or rolls, cigarette tipping
paper or cigarette filter tips, without the corresponding authority


1 therefor issued by the Commissioner. Any person, importer,
2 manufacturer of cigar and cigarettes, who has been found guilty
3 under this Section, shall, upon conviction for each act or omission,
4 be punished by a fine of not less than than[ Twenty thousand pesos
5 (P20,000) but not more than One hundred thousand pesos
6 (P100,000) ] ONE MILLION FIVE HUNDRED THOUSAND PESOS
7 (P1,500,000) BUT NOT MORE THAN FIFTEEN MILLION PESOS
8 (P15,000,000) and suffer imprisonment for a term of not less than

9 six (6) years and one (1) day but not more than twelve (12) years.”
10

1" SEC. 27. Sec. 261 of the National Internal Revenue Code of 1997, as
12 amended, is hereby amended to read as follows:

13

14 “SEC. 261. Unlawful Use of Denatured Alcohol. - Any person who for
16 the purpose of manufacturing any beverage, uses denatured alcohol
16 or alcohol specially denatured to be used for motive power or
7 withdrawn under bond for industrial uses or alcohol knowingly
18 misrepresented to be denatured to be unfit for oral intake or who
19 knowingly sells or offers for sale any beverage made in whole or in
20 part from such alcohol or who uses such alcohol for the
21 manufacture of liquid medicinal preparations taken internally, or
22 knowingly sells or offers for sale such preparations containing as an
23 ingredient such alcohol, shall upon conviction for each act or
24 omission be punished by a fine of not less than than[Twenty
25 thousand pesos (P20,000) but not more than One hundred
26 thousand pesos (P100,000) ] ONE MILLION FIVE HUNDRED
27 THOUSAND PESOS (P1,500,000) BUT NOT MORE THAN
28 FIFTEEN MILLION PESOS (P15,000,000) and suffer imprisonment
29 for a term of not less than six (6) years and one (1) day but not more
30 than twelve (12) years.

Ka

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

37

36 SEC. 28. Sec. 262 of the National Internal Revenue Code of 1997, as
39 amended, is hereby amended to read as follows:

40

44 “SEC. 262. Shipment or Removal of Liquor or Tobacco Products under
42 False Name or Brand or as an Imitation of any Existing or Otherwise
43 Known Product Name or Brand. - Any person who ships, transports
44 or removes spirituous, compounded or fermented liquors, wines or
45 any manufactured products of tobacco under any ‘other than the

46 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 a fine of not less
than [ Twenty thousand pesos (P20,000) but not more than One
hundred thousand pesos (P100,000) ] ONE MILLION FIVE
HUNDRED THOUSAND PESOS (P1,500,000) BUT NOT MORE
THAN FIFTEEN MILLION PESOS (P15,000,000) and suffer
imprisonment of not less than six (6) years and one (1) day but not
more than twelve (12) years.”

SEC. 29. Sec. 263 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

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

(a) A fine of not less than [ One thousand pesos (P1,000) ]TWENTY
FIVE THOUSAND PESOS (P25,000) [ nor | BUT NOT more than [
Two thousand pesos (P2,000) JSEVENTY FIVE THOUSAND PESOS
(P75,000) and suffer imprisonment of not less than [ sixty (60)
days but not more than one hundred (100) days ] THIRTY (30)
DAYS BUT NOT MORE THAN SIX (6) MONTHS if the appraised
value, to be determined in the manner prescribed in the [ Tariff and
Customs Code JCUSTOMS MODERNIZATION AND TARIFF ACT,
including duties and taxes, of the articles 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 hot more than [
Twenty thousand pesos (P20,000) JONE HUNDRED FIFTY
THOUSAND PESOS (P150,000) and suffer imprisonment of not
less than [ two (2) years but not more than four (4) years SIX (6)
MONTHS AND ONE (1) DAY BUT NOT MORE THAN ONE (1) YEAR
if the appraised value, to be determined in the manner prescribed in
the [ Tariff and Customs Code JCUSTOMS MODERNIZATION AND
TARIFF ACT, including duties and taxes, of the articles 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);


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(c) A fine of not less than [ Thirty thousand pesos (P30,000) ] ONE
HUNDRED FIFTY THOUSAND PESOS (P150,000) but not more
than [ Sixty thousand pesos (P60,000) JTHREE HUNDRED
THOUSAND PESOS (P300,000) and suffer imprisonment of
not less than [ four (4) years but not more than six (6) years ] ,ONE
(1) YEAR AND ONE (1) DAY BUT NOT MORE THAN THREE (3)
YEARS, if the appraised value, to be determined ‘in the manner
prescribed in the [ Tariff and Customs Code ]JCUSTOMS
MODERNIZATION AND TARIFF ACT, including duties and taxes of
the articles is more than | Fifty thousand pesos (P50,000) but
does not exceed One hundred fifty thousand pesos (P150,000)
]FIVE HUNDRED THOUSAND PESOS (P500,000) BUT DOES NOT
EXCEED 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 suffer
imprisonment of [ not less than ten (10) years but not more than
twelve (12) years ] THREE (3) YEARS AND ONE (1) DAY BUT NOT
MORE THAN SIX (6) years, if the appraised value, to be determined
in the manner prescribed in the [ Tariff and Customs Code ]
CUSTOMS MODERNIZATION AND TARIFF ACT, including duties
and taxes, of the articles exceeds [ One hundred fifty thousand pesos
(P150,000) ] IS MORE THAN ONE MILLION PESOS
(P1,000,000.00) BUT NOT MORE THAN FIVE MILLION PESOS
(P5,000,000.00);

(E) A FINE OF NOT LESS THAN ONE MILLION FIVE HUNDRED
THOUSAND PESOS (P 1,500,000.00) BUT NOT MORE THAN
FIFTEEN MILLION PESOS (P15,000,000.00), AND SUFFER
IMPRISONMENT OF NOT LESS THAN SIX (6) YEARS AND ONE
(1) DAY BUT NOT MORE THAN TWELVE (12) YEARS, IF THE
APPRAISED VALUE, TO BE DETERMINED IN THE MANNER
PRESCRIBED IN THE CUSTOMS MODERNIZATION AND TARIFF
ACT, INCLUDING DUTIES AND TAXES, OF THE ARTICLES IS
MORE THAN FIVE MILLION PESOS (P5,000,000) BUT NOT
MORE THAN FIFTY MILLION PESOS (P50,000,000);

(F) A FINE OF NOT LESS THAN FIFTEEN MILLION PESOS (P
15,000,000.00) BUT NOT MORE THAN FIFTY MILLION PESOS
(P50,000,000), AND SUFFER IMPRISONMENT OF NOT LESS
THAN TWELVE (12) YEARS AND ONE (1) DAY BUT NOT MORE
THAN TWENTY (20) YEARS, IF THE APPRAISED VALUE, TO BE
DETERMINED IN THE MANNER PRESCRIBED IN THE CUSTOMS


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33

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43

45

MODERNIZATION AND TARIFF ACT, INCLUDING DUTIES AND
TAXES, OF THE ARTICLES IS MORE THAN FIFTY MILLION
PESOS (P50,000,000.00) BUT NOT MORE THAN TWO HUNDRED
MILLION PESOS (P200,000,000); OR

(G) IF THE APPRAISED VALUE OF THE GOODS UNLAWFULLY
IMPORTED TO BE DETERMINED IN THE MANNER PRESCRIBED
UNDER IN THE CUSTOMS MODERNIZATION AND TARIFF ACT,
INCLUDING DUTIES AND TAXES, EXCEEDS TWO HUNDRED
MILLION PESOS (P200,000,000) OR IF THE AGGREGATE
AMOUNT OF THE APPRAISED VALUE OF THE GOODS WHICH
ARE THE SUBJECT OF UNLAWFUL IMPORTATION COMMITTED
IN MORE THAN ONE INSTANCE, INCLUDING DUTIES AND
TAXES, EXCEEDS TWO HUNDRED MILLION PESOS
(P200,000,000), THE SAME SHALL BE PUNISHABLE WITH A
PENALTY OF TWENTY YEARS ONE DAY BUT NOT MORE THAN
THIRTY YEARS AND A FINE OF NOT LESS THAN FIFTY MILLION
PESOS (P50,000,000.00).

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)
JTWENTY FIVE THOUSAND PESOS (P25,000) and suffer
imprisonment of not less than two (2) years but not more than four
(4) years.

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

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


SEC. 30. Sec. 264 of the National Internal Revenue Code of 1997, as
amended, is hereby amended to read as follows:

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

SEC. 31.

(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 a fine of not less than [ One thousand
pesos (P1,000) but not more than Fifty thousand pesos
(P50,000) JONE HUNDRED THOUSAND PESOS
(P100,000) BUT NOT MORE THAN FIVE HUNDRED
THOUSAND PESOS (P500,000) and suffer
imprisonment of not less than [ two (2) years but not
more than four (4) years ] FOUR (4) YEARS BUT NOT
MORE THAN EIGHT (8) YEARS.

(b) Any person who commits any of the acts enumerated
hereunder shall be penalized in the same manner and
to the same extent as provided for in this Section:

(1) Printing of receipts or sales or commercial invoices
without authority from the Bureau of Internal Revenue;
or

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

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

“SEC. 265. Offenses Relating to Stamps. - Any person who commits
any of the acts enumerated hereunder shall, upon conviction
thereof, be punished by a fine of not less than [ Twenty thousand

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


“SEC. 275. Violation of Other Provisions of this Code or Rules and
Regulations in General. - Any person who violates any provision of
this Code or any rule or regulation promulgated by the Department
of Finance, for which no specific penalty is provided by law, shall,
upon conviction for each act or omission, be punished by a fine of
not more than [ One thousand pesos (P1,000) ] TEN THOUSAND
PESOS (P10,000) or suffer imprisonment of not more than

[ six (6) months ] TWO (2) YEARS, or both.”

SEC. 34. A new section is hereby inserted after Section 282 of the National
Internal Revenue Code of 1997, as amended, to read as follows:

“SEC. 282-A. VIOLATION OF THE PROVISIONS OF THIS CODE
AMOUNTING TO ECONOMIC SABOTAGE. - ANY VIOLATION OF
SECTION 254 OF THIS CODE THAT UNDERMINES, WEAKENS
OR RENDERS INTO DISREPUTE THE ECONOMIC SYSTEM OR
VIABILITY OF THE COUNTRY OR TENDS TO BRING OUT SUCH
EFFECTS, IN LIEU OF THE PENALTY SET IN THE PRECEDING
PROVISIONS, SHALL CONSTITUTE ECONOMIC SABOTAGE,
AND, UPON CONVICTION FOR EACH ACT OR OMISSION, BE
PUNISHED BY A FINE OF NOT LESS THAN FIFTY MILIION
(P50,000,000) AND RECLUSION TEMPORAL.

SEC. 35. Sec. 290 of the National Internal Revenue Code of 1997, as
amended, is hereby further amended to read as follows:

“SEC. 290. Congressional Oversight Committee. —
XXX

The Committee shall, among others, in aid of legislation:

(1) xxx;

(2) xxx;

(3) xxx; [and]
(4) xxxl.J5

(5) REVIEW THE PERFORMANCE OF FUNCTIONS OF THE
INVESTMENT PROMOTION AGENCIES AND THE FISCAL
INCENTIVES REVIEW BOARD, PARTICULARLY IN THE GRANT

OF INCENTIVES TO REGISTERED ENTERPRISES AND IN THE
REVIEW AND EVALUATION OF GRANTED INCENTIVES,
RESPECTIVELY, AS WELL AS IN THE FORMULATION OF THE
STRATEGIC INVESTMENTS PRIORITY PLAN; AND


xxx”

SEC. 36. A new title is hereby inserted beginning Section 291, Title XIII of

the National Internal Revenue Code of 1997, as amended, to read as follows:

“TITLE XI
CHAPTER I
GENERAL PROVISIONS ON TAX INCENTIVES

SEC 291. SCOPE AND COVERAGE. - THIS TITLE SHALL COVER
ALL EXISTING INVESTMENT PROMOTION AGENCIES (IPAS) AS
DEFINED IN THIS CODE OR RELATED LAWS, AND ALL OTHER IPAS
AND OTHER SIMILAR AUTHORITIES THAT MAY BE CREATED BY
LAW.

THE IPAS SHALL MAINTAIN THEIR FUNCTIONS AND POWERS
AS PROVIDED UNDER THE SPECIAL LAWS GOVERNING THEM
EXCEPT ON THE EXTENT MODIFIED BY THE PROVISIONS OF THIS
CODE.

SEC. 292. GOVERNING PROVISION FOR IPAS. - ALL IPAS
VESTED WITH THE POWER TO CONFER ‘AND ADMINISTER
INCENTIVES SHALL GRANT TAX INCENTIVES PROVIDED IN THIS
TITLE TO REGISTERED ENTERPRISES ONLY TO THE EXTENT OF
THEIR APPROVED REGISTERED PROJECTS OR ACTIVITIES UNDER
THE STRATEGIC INVESTMENT PRIORITY PLAN (SIPP). THE PERIOD
OF AVAILMENT OF INCENTIVES SHALL BE RECKONED FROM THE
START OF COMMERCIAL OPERATION.

INCOME OR SALES DERIVED FROM NON-REGISTERED
ACTIVITY OR PROJECT SHALL BE SUBJECT TO APPROPRIATE
TAXES UNDER THIS CODE.

UNLESS OTHERWISE PROVIDED IN THIS CODE, VALUE-ADDED
TAX SHALL FOLLOW THE DESTINATION PRINCIPLE WHERE
EXPORTS ARE ZERO-RATED AND DOMESTIC SALES ARE SUBJECT
TO THE REGULAR VALUE-ADDED TAX RATE.

SEC. 293. DEFINITIONS - WHEN USED IN THIS TITLE TO AVAIL
OF INCENTIVES:

(A) THE TERM ‘ANNUAL FISCAL INCENTIVES REPORT’ REFERS
TO THE DETAILED REPORT ON FISCAL INCENTIVES AVAILED IN A
TAXABLE YEAR AND BENEFITS CORRESPONDING THERETO. THE


REPORT SHALL CONTAIN FIRM- OR ENTITY-LEVEL DATA SUCH AS
BUT NOT LIMITED TO THE ACTUAL AMOUNT OF INVESTMENTS,
TAXES WITHHELD AND FOREGONE, EMPLOYMENT IMPACT, AND
EXPORTS, IMPORTS AND DOMESTIC INPUTS.

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

(C) THE TERM ‘FISCAL INCENTIVES’ SHALL MEAN TAX
INCENTIVES SUCH AS INCOME TAX HOLIDAY, REDUCED INCOME
TAX RATE, ADDITIONAL INCOME TAX DEDUCTIONS, CUSTOMS
DUTY EXEMPTION, VAT EXEMPTION AND ZERO-RATING, LOCAL TAX
EXEMPTIO, AND OTHER EXEMPTIONS AND SPECIAL RATE AS MAY
BE PROVIDED BY LAW TO REGISTERED BUSINESS ENTERPRISES
AND OTHER REGISTERED ENTITIES.

(D) THE TERM INVESTMENT PROMOTION AGENCIES (IPAS)’
SHALL REFER TO GOVERNMENT ENTITIES CREATED BY LAW,
EXECUTIVE ORDER, DECREE OR OTHER ISSUANCE, IN CHARGE OF
PROMOTING INVESTMENTS, ADMINISTERING TAX AND NON-TAX
INCENTIVES, AND/OR OVERSEEING THE OPERATIONS FOR THE
DIFFERENT ECONOMIC ZONES AND FREEPORTS IN ACCORDANCE
WITH THEIR RESPECTIVE CHARTERS. THESE INCLUDE THE BOARD
OF INVESTMENTS (BOI), REGIONAL BOARD OF INVESTMENTS
AUTONOMOUS REGION IN MUSLIM MINDANAO (RBOI-ARMM),
PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), BASES
CONVERSION AND DEVELOPMENT AUTHORITY (BCDA), SUBIC BAY
METROPOLITAN AUTHORITY (SBMA), CLARK DEVELOPMENT
CORPORATION (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 EXISTING OR THAT MAY BE CREATED BY
Law.

(—E) THE TERM ‘OTHER GOVERNMENT AGENCIES
ADMINISTERING FISCAL INCENTIVES (OGA)’ SHALL REFER TO
GOVERNMENT AGENCIES OTHER THAN IPAS WHICH REGISTER OR
ADMINISTER FISCAL INCENTIVES OF ANY KIND TO ANY SPECIFIC


ENTITIES AND/OR CLASS OF PERSONS PURSUANT TO ANY LAW.
THESE SHALL INCLUDE, BUT SHALL NOT BE LIMITED TO THE
COOPERATIVE DEVELOPMENT AUTHORITY (CDA), DEPARTMENT
OF SOCIAL WELFARE AND DEVELOPMENT (DSWD), COMMISSION ON
HIGHER EDUCATION (CHED), BUREAU OF INTERNAL REVENUE
(BIR), DEPARTMENT OF AGRARIAN REFORM (DAR), DEPARTMENT
OF AGRICULTURE (DA), DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS (DOTC), CIVIL AVIATION AUTHORITY OF THE
PHILIPPINES (CAAP), DEPARTMENT OF PUBLIC WORKS AND
HIGHWAYS (DPWH), REGIONAL GOVERNMENT-AUTONOMOUS
REGION IN MUSLIM MINDANAO, REGIONAL GOVERNMENT-
CORDILLERA ADMINISTRATIVE REGION, DEPARTMENT OF
TOURISM (DOT), BANGKO SENTRAL NG PILIPINAS (BSP), NATIONAL
BOOK DEVELOPMENT BOARD (NBDB), BOY SCOUT OF THE
PHILIPPINES, GIRL SCOUT OF THE PHILIPPINES, DEPARTMENT OF
FINANCE (DOF), BUREAU OF CUSTOMS (BOC), NATIONAL
TELECOMMUNICATIONS COMMISSION (NTC), PRESIDENTIAL
COMMUNICATIONS OPERATIONS OFFICE (PCOO), NATIONAL
COUNCIL FOR CHILDREN’S TELEVISION (NCCT), NATIONAL
COMMISSION FOR CULTURE AND THE ARTS (NCCA), NATIONAL
HISTORICAL COMMISSION OF THE PHILIPPINES (NHCP), FILM
DEVELOPMENT COUNCIL, NATIONAL COUNCIL FOR DISABILITY
AFFAIRS, SECURITIES AND EXCHANGE COMMISSION (SEC),
COMMISSION ON HIGHER EDUCATION (CHED), DEPARTMENT OF
EDUCATION (DEPED), DEPARTMENT OF SCIENCE AND
TECHNOLOGY (DOST), TECHNICAL EDUCATION AND SKILLS
DEVELOPMENT AUTHORITY (TESDA), COMMISSION ON ELECTIONS
(COMELEC), NATIONAL ELECTRIFICATION ADMINISTRATION (NEA),
NATIONAL POWER CORPORATION (NPC), DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES (DENR), NATIONAL
DISASTER AND RISK REDUCTION MANAGEMENT COUNCIL
(NDRRMC), DEPARTMENT OF FOREIGN AFFAIRS (DFA),
DEPARTMENT OF HEALTH (DOH), PHILIPPINE RED CROSS,
HOUSING AND URBAN DEVELOPMENT COORDINATING COUNCIL
{HUDCC), NATIONAL GOVERNMENT CENTER ADMINISTRATION
COMMITTEE, HOUSING AND LAND USE REGULATORY BOARD
(HLURB), NATIONAL COMMISSION ON INDIGENOUS PEOPLE (NCIP),
QUEZON CITY DEVELOPMENT AUTHORITY, SOCIAL SECURITY
SYSTEM (S88), GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS),
PHILIPPINE DEPOSIT INSURANCE CORPORATION (PDIC), SUPREME
COURT (SC), DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE),
OVERSEAS WORKERS WELFARE ADMINISTRATION (OWWA),
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA),
DEPARTMENT OF JUSTICE (DOJ), DEPARTMENT OF INTERIOR AND
LOCAL GOVERNMENT (DILG), NATIONAL ANTI-POVERTY
COMMISSION (NAPC), PARTIDO DEVELOPMENT ADMINISTRATION,


PHILIPPINE VETERANS AFFAIRS OFFICE (PVAO), DEPARTMENT OF
NATIONAL DEFENSE (DND), PHILIPPINE PORTS AUTHORITY (PPA),
PHILIPPINE SPORTS COMMISSION (PSC), NATIONAL YOUTH
COMMISSION, AND HUMAN RIGHTS VIOLATIONS VICTIM’S
MEMORIAL COMMISSION, AMONG OTHERS.

(F) THE TERM ‘OTHER REGISTERED ENTITIES (OREs? REFER
TO ANY INDIVIDUAL, PARTNERSHIP, ORGANIZATION,
CORPORATION, PHILIPPINE BRANCH OF A_ FOREIGN
CORPORATION, OR OTHER ENTITY INCORPORATED AND/OR
ORGANIZED AND EXISTING UNDER PHILIPPINE LAWS, AND
REGISTERED WITH .OTHER OGAS ADMINISTERING FISCAL
INCENTIVES.

(G) THE TERM ‘REGISTERED BUSINESS ENTERPRISE (RBE)’
SHALL MEAN INDIVIDUAL, PARTNERSHIP, CORPORATION,
PHILIPPINE BRANCH OF A FOREIGN CORPORATION, OR OTHER
ENTITY ORGANIZED AND EXISTING UNDER PHILIPPINE LAWS AND
REGISTERED WITH AN IPA AS DEFINED UNDER REPUBLIC ACT (RA)
NO. 10708, OR THE TIMTA LAW: PROVIDED, HOWEVER, THAT THE
TERM “REGISTERED ENTERPRISE” SHALL NOT INCLUDE ANY OF
THE FOLLOWING SERVICE ENTERPRISES SUCH AS, BUT NOT
LIMITED TO, THOSE ENGAGED IN CUSTOMS BROKERAGE,
TRUCKING OR FORWARDING SERVICES, JANITORIAL SERVICES,
SECURITY SERVICES, INSURANCE, BANKING, AND OTHER
FINANCIAL SERVICES, CONSUMERS’ COOPERATIVES, CREDIT
UNIONS, CONSULTANCY SERVICES, RETAIL BUSINESS,
RESTAURANTS, OR SUCH OTHER SIMILAR SERVICES, AS MAY BE
DETERMINED BY THE FISCAL INCENTIVES REVIEW BOARD (FIRB)
OR IPA BOARD, IRRESPECTIVE OF LOCATION, WHETHER INSIDE OR
OUTSIDE THE ECOZONES, 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 (NIRC) OF 1997, AS AMENDED.

(H) THE TERM ‘SPECIAL ECONOMIC ZONE’ OR ‘ECOZONE’
SHALL REFER TO A SELECTED AREA, WHICH SHALL BE OPERATED
AND MANAGED AS A SEPARATE CUSTOMS TERRITORY THAT IS
HIGHLY DEVELOPED OR HAS THE POTENTIAL TO BE DEVELOPED
INTO AN _ AGRO-INDUSTRIAL, INDUSTRIAL, INFORMATION
TECHNOLOGY, OR TOURIST/RECREATIONAL, WHOSE METES AND
BOUNDS ARE FIXED OR DELIMITED BY PRESIDENTIAL
PROCLAMATIONS 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,


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45

HOWEVER, THAT AREAS WHERE MINING EXTRACTIONS ARE
UNDERTAKEN SHALL NOT BE DECLARED AS ECOZONES: PROVIDED,
FURTHER, THAT VERTICAL ECONOMIC ZONES, SUCH AS BUT NOT
LIMITED TO BUILDINGS, SELECTED FLOORS WITHIN BUILDINGS,
AND SELECTED AREAS ON A FLOOR, SHOULD.COMPLY WITH THE
MINIMUM CONTIGUOUS LAND AREA AS DETERMINED BY THE FIRB.

(I) THE TERM ‘SPECIAL PROJECTS/ACTIVITIES’ SHALL REFER
TO PROJECTS/ ACTIVITIES DEFINED AS FOLLOWS:

(1)REGISTERED PROJECTS WITH INVESTMENT AMOUNT
OF FIFTY MILLION PESOS (PHP 50,000,000) AND ABOVE,
AS MAY BE ADJUSTED IN THE IMPLEMENTING RULES
AND REGULATIONS;

(2) REGISTERED PROJECTS OR ACTIVITIES THAT ARE:

(2.1) “ENVIRONMENTALLY RISKY PROJECTS” SUCH AS.
BUT NOT LIMITED TO:

(a) THOSE FALLING WITHIN THE SCOPE OF THE
ENVIRONMENTAL IMPACT STATEMENT (EIS)
SYSTEM ESTABLISHED UNDER PD NO. 1586 AND
PROCLAIMED PURSUANT ‘TO PRESIDENTIAL
PROCLAMATION (PP) NO. 2146, AS AMENDED BY
PP NO. 803, OR AS MAY BE AMENDED IN THE
FUTURE:

(i)

ENVIRONMENTALLY CRITICAL PROJECTS
(ECP) WHICH HAVE A HIGH POTENTIAL
FOR NEGATIVE ENVIRONMENTAL
IMPACTS AND WHOSE PROPONENTS ARE
REQUIRED TO SUBMIT ENVIRONMENTAL
IMPACT STATEMENTS (EIS), SUCH AS BUT
NOT LIMITED TO: (A) HEAVY INDUSTRIES
(NON-FERROUS METAL INDUSTRIES, IRON
AND STEEL MILLS, PETROLEUM AND
PETROCHEMICAL INDUSTRIES, AND
SMELTING PLANTS); (B) RESOURCE
EXTRACTIVE INDUSTRIES (MAJOR
MINING AND QUARRYING PROJECTS,
FORESTRY PROJECTS, DIKES AND
FISHPOND DEVELOPMENT PROJECTS); (C)
INFRASTRUCTURE PROJECTS (MAJOR
DAMS, MAJOR POWER PLANTS, MAJOR


RECLAMATION PROJECTS, MAJOR ROAD
AND BRIDGES); AND (D) GOLF COURSE
PROJECTS.

PROJECTS LOCATED IN
ENVIRONMENTALLY CRITICAL AREAS
(ECA) WHOSE PROJECT PROPONENT IS
REQUIRED TO SUBMIT AN EIS LATER, IF
DEEMED NECESSARY, IS REQUIRED.
SUCH AREAS INCLUDE BUT ARE NOT
LIMITED TO: (A) ALL AREAS DECLARED
BY LAW AS NATIONAL PARKS,
WATERSHED RESERVES, WILDLIFE
PRESERVES, AND SANCTUARIES; (B)
AREAS SET ASIDE AS AESTHETIC
POTENTIAL TOURIST SPOTS; (C) AREAS
WHICH CONSTITUTE THE HABITAT FOR
ANY ENDANGERED OR THREATENED
SPECIES OF INDIGENOUS PHILIPPINE
WILDLIFE (FLORA AND FAUNA); (D) AREAS
OF UNIQUE HISTORIC, ARCHEOLOGICAL
OR SCIENTIFIC INTEREST; (E) AREAS
WHICH ARE TRADITIONALLY OCCUPIED
BY CULTURAL COMMUNITIES OR TRIBES
(INDIGENOUS CULTURAL COMMUNITIES);
(F) AREAS FREQUENTLY VISITED AND/OR
HARD-HIT BY NATURAL CALAMITIES
(GEOLOGIC HAZARDS, FLOODS,
TYPHOONS, VOLCANIC ACTIVITY, ETC.};
(G) AREAS WITH CRITICAL SLOPES; (H)
AREAS CLASSIFIED AS PRIME
AGRICULTURAL LANDS; (I) RECHARGED
AREAS OF AQUIFERS; (J) WATER BODIES
CHARACTERIZED BY ONE OR ANY
COMBINATION OF THE FOLLOWING
CONDITIONS: (I.) TAPPED FOR DOMESTIC
PURPOSES, (II) WITHIN THE CONTROLLED
AND/OR PROTECTED AREAS DECLARED
BY APPROPRIATE AUTHORITIES, (II)
WHICH SUPPORT WILDLIFE AND FISHERY
ACTIVITIES; (K) MANGROVE AREAS
CHARACTERIZED BY ONE OR ANY
COMBINATION OF THE FOLLOWING
CONDITIONS: (I) WITH PRIMARY PRISTINE
AND DENSE YOUNG GROWTH, (II)


ADJOINING MOUTH OF MAJOR RIVER
SYSTEMS, (III) NEAR OR ADJACENT TO
TRADITIONAL PRODUCTIVE FRY OR
FISHING GROUNDS, (IV) WHICH ACT AS
NATURAL BUFFERS. AGAINST SHORE
EROSION, STRONG WINDS AND STORM
FLOODS, (V) ON WHICH PEOPLE ARE
DEPENDENT FOR THEIR LIVELIHOOD;
AND (L) CORAL REEFS CHARACTERIZED
BY ONE OR ANY COMBINATION OF THE
FOLLOWING CONDITIONS: (I) WITH FIFTY
PERCENT (50%) AND ABOVE LIVE
CORALLINE COVER, (II) SPAWNING AND
NURSERY GROUNDS FOR FISH, (III) WHICH
ACT AS NATURAL BREAKWATER OF
COASTLINES.

(b) PROJECTS AND ACTIVITIES THAT REQUIRE THE
IMPORTATION, MANUFACTURE, PROCESSING,
SALE, DISTRIBUTION, USE AND DISPOSAL OF
CHEMICAL SUBSTANCES AND MIXTURES THAT
PRESENT UNREASONABLE RISK AND/OR
INJURY TO HEALTH AND/OR ENVIRONMENT
UNDER RA 6969, OTHERWISE KNOWN AS THE
“TOXIC SUBSTANCES AND HAZARDOUS AND
NUCLEAR WASTES CONTROL ACT OF 1990”;

(c) INDUSTRIES THAT DISCHARGE REGULATED
EFFLUENTS AND ARE REQUIRED TO SECURE A
DISCHARGE PERMIT FROM THE DENR UNDER
RA 9275, OTHERWISE KNOWN AS THE
“PHILIPPINE CLEAN WATER ACT OF 2004”;

(2.2) “HEALTH RISKY PROJECTS” OR THOSE FALLING

UNDER THE SCOPE OF THE PHILIPPINE NATIONAL
FRAMEWORK AND GUIDELINES FOR
ENVIRONMENTAL HEALTH IMPACT ASSESSMENT
SUCH AS PROJECTS THAT HAVE HEALTH-
SENSITIVE COMPONENTS AND THOSE LOCATED IN
HEALTH-SENSITIVE PROJECT LOCATIONS AS
DETERMINED BY THE DEPARTMENT OF HEALTH
(DOH), OTHER GOVERNMENT AGENCIES AND
RELEVANT ENTITIES, WITHOUT PREJUDICE TO
THE ESTABLISHMENT OF A HEALTH IMPACT
ASSESSMENT (HIA) SYSTEM IN THE FUTURE, AND


ISSUANCE OF A PRESIDENTIAL PROCLAMATION ON
THE MATTER.

(2.3) “ECONOMICALLY RISKY PROJECTS” OR PROJECTS
THAT POSE RISKS TO ECONOMIC STABILITY
WHICH INCLUDE THOSE THAT HAVE HIGH
RELIANCE ON IMPORTS, LIMIT COMPETITION, AND
ARE POTENTIALLY SPECULATIVE IN NATURE.

(3)REGISTERED PROJECTS OR ACTIVITIES WHOSE
APPROVAL IN THE IPA BOARD LEVEL DOES NOT MEET
THE MINIMUM REQUIRED VOTES OF AT LEAST TWO-
THIRDS.

(J) THE TERM ‘TAX SUBSIDY OR TAX EXPENDITURE SUBSIDY’
SHALL REFER TO SUBSIDY GIVEN TO NATIONAL GOVERNMENT
AGENCIES, GOCCS AND GOVERNMENT INSTRUMENTALITIES, STATE
UNIVERSITIES AND COLLEGES (SUCS), AND OTHER GOVERNMENT
ENTITIES AS MAY BE PROVIDED UNDER THE ANNUAL GENERAL
APPROPRIATIONS ACT (GAA), IN LIEU OF PAYMENT OF TAXES AND
CUSTOM DUTIES, CHARGEABLE AGAINST THE TAX EXPENDITURE
FUND.

CHAPTER Il
TAX AND DUTY INCENTIVES

SEC. 294. INCENTIVES. - REGISTERED PROJECTS OR
ACTIVITIES UNDER THE STRATEGIC INVESTMENTS PRIORITY PLAN
SHALL BE QUALIFIED TO ANY OF THE FOLLOWING INCENTIVES:

(A) INCOME TAX INCENTIVES

(1) 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, EXCEPT THOSE PROVIDED UNDER SECTIONS 294
(7) and (9), 295, 296, AND 297.

(2) REDUCED CORPORATE INCOME TAX. - A REDUCED TAX
RATE OF EIGHTEEN PERCENT (18%) OF THE TAXABLE
INCOME AS DEFINED UNDER SECTION 31 OF THIS CODE.
PROVIDED, THAT IN THE CASE OF REGISTERED ENTERPRISES


WITHIN ECONOMIC ZONES AND FREEPORTS, THAT TAX SHALL
BE PAID AS FOLLOWS:

FIFTEEN PERCENT (15%) TO THE NATIONAL
GOVERNMENT; .

ONE POINT FIVE PERCENT (1.5%) TO BE DIRECTLY
REMITTED TO THE TREASURER’S OFFICE OF THE
PROVINCE WHERE THE ENTERPRISE IS LOCATED,
IN LIEU OF THE LOCAL BUSINESS TAX;

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

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

(3) DEPRECIATION ALLOWANCE OF THE ASSETS THAT IS
ACQUIRED FOR THE ENTITY’S PRODUCTION OF GOODS AND
SERVICES (QUALIFIED CAPITAL EXPENDITURE) OF TEN
PERCENT (10%) FOR BUILDINGS; AND TWENTY PERCENT (20%)
FOR MACHINERIES AND EQUIPMENT. PROVIDED, THAT
DEPRECIATION MAY BE COMPUTED USING ACCELERATED
DEPRECIATION METHOD ON RATE NOT EXCEEDING TWICE
THE RATE WHICH WOULD HAVE BEEN USED HAD THE ANNUAL
ALLOWANCE BEEN COMPUTED IN ACCORDANCE WITH THE
RULES AND REGULATIONS PRESCRIBED BY THE SECRETARY
OF FINANCE AND THE PROVISIONS OF THE NIRC OF 1997, AS
AMENDED: PROVIDED FURTHER, THAT THE ASSETS ARE
ACQUIRED DIRECTLY FOR THE ENTITY’S PRODUCTION OF
GOODS AND SERVICES OTHER THAN ADMINISTRATIVE AND
OTHER SUPPORT SERVICES.

(4) UP TO FIFTY PERCENT (50%) ADDITIONAL DEDUCTION ON
THE INCREMENT OF LABOR EXPENSE: PROVIDED, THAT THIS
DOES NOT INCLUDE INDIRECT LABOR, SALARIES AND WAGES,
AND OTHER PERSONNEL COSTS INCURRED FOR
ADMINISTRATIVE AND OTHER SUPPORT SERVICES.


Sooroumaena

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(5) UP TO ONE HUNDRED PERCENT (100%) ADDITIONAL
DEDUCTION ON THE INCREMENT OF RESEARCH AND
DEVELOPMENT INCURRED IN THE TAXABLE YEAR: PROVIDED,
THAT IT IS DIRECTLY RELATED TO THE REGISTERED
ACTIVITIY/IES OF THE EN TITY, AND

(6) UP TO ONE HUNDRED PERCENT (100%) ADDITIONAL
DEDUCTION ON THE INCREMENT OF TRAINING INCURRED IN
THE TAXABLE YEAR: PROVIDED, THAT IT IS GIVEN TO THE
EMPLOYEES ENGAGED DIRECTLY IN THE ENTITY’S
PRODUCTION OF GOODS AND SERVICES: PROVIDED,
FURTHER, THAT THE CONCERNED IPA HAS ISSUED A
CORRESPONDING CERTIFICATE OF ENTITLEMENT UPON
APPLICATION, AND A CERTIFICATE OF APPROVAL AFTER A
REVIEW OF DOCUMENTATION OF TRAININGS SUBMITTED BY
THE ENTERPRISE AT THE END OF THE TAXABLE YEAR,
OTHERWISE, THIS INCENTIVE SHALL BE DEEMED WAIVED.

(7) _UP TO ONE HUNDRED PERCENT (100%) DEDUCTION ON
INFRASTRUCTURE DEVELOPMENT. - REGISTERED
ENTERPRISES ESTABLISHING THEIR ACTIVITY IN AN AREA
THAT THE STRATEGIC INVESTMENT PRIORITY PLAN (SIPP)
DESIGNATES AS NECESSARY FOR COUNTRY-WIDE
DEVELOPMENT OR IN AN AREA FOUND TO BE DEFICIENT IN
INFRASTRUCTURE, PUBLIC UTILITIES, AND OTHER
FACILITIES, SUCH AS IRRIGATION, DRAINAGE, OR OTHER
SIMILAR WATERWORKS INFRASTRUCTURE, MAY DEDUCT
FROM THE GROSS INCOME AN AMOUNT EQUIVALENT TO UP
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.

(8) DEDUCTION FOR REINVESTMENT ALLOWANCE TO
MANUFACTURING INDUSTRY. - WHEN A MANUFACTURING
REGISTERED ENTERPRISE REINVESTS ITS UNDISTRIBUTED
PROFIT OR SURPLUS IN ANY OF THE ACTIVITIES LISTED IN
THE SIPP, THE AMOUNT SO REINVESTED TO A MAXIMUM OF


FIFTY PERCENT (50%) SHALL BE ALLOWED AS A DEDUCTION
FROM ITS TAXABLE INCOME WITHIN A PERIOD OF FIVE (5)
YEARS FROM THE TIME OF SUCH REINVESTMENT: PROVIDED,
THAT PRIOR APPROVAL AND RECOMMENDATION BY THE IPA
CONCERNED OF SUCH REINVESTMENT WAS OBTAINED BY
THE REGISTERED ENTERPRISE PLANNING SUCH
REINVESTMENT.

(9) ENHANCED NET OPERATING LOSS CARRY-OVER
(NOLCO). - THE NET OPERATING LOSS OF THE REGISTERED
ACTIVITY DURING THE FIRST THREE (3) YEARS FROM THE
START OF COMMERCIAL OPERATION WHICH HAD NOT BEEN
PREVIOUSLY OFFSET AS DEDUCTION FROM GROSS INCOME
MAY BE CARRIED OVER AS DEDUCTION FROM GROSS INCOME
WITHIN THE NEXT FIVE (5) CONSECUTIVE TAXABLE YEARS
IMMEDIATELY FOLLOWING THE YEAR OF SUCH LOSS.

(10) UP TO FIFTY PERCENT (50%) ADDITIONAL DEDUCTION
ON THE INCREMENT OF DOMESTIC INPUT EXPENSE
INCURRED IN THE TAXABLE YEAR: PROVIDED, THAT IT IS
DIRECTLY RELATED TO AND ACTUALLY USED IN THE
REGISTERED EXPORT ACTIVITY OF THE REGISTERED
ENTITY.”

PROVIDED, THAT IN LIEU OF THE ITH UNDER SECTION 294 (A) (1)
OR THE REDUCED TAX RATE OF EIGHTEEN PERCENT (18%) UNDER
SECTION 294 (A) (2), THE TAX INCENTIVES UNDER SECTION 294 (A)
(3), (4), (5), (6), (7), (8), (9), AND (10) MAY BE GRANTED ON AN
INDUSTRY-SPECIFIC BASIS AS DETERMINED BY THE BOI IN THE
STRATEGIC INVESTMENT PRIORITY PLAN. THE BOI SHALL
PRESCRIBED THE LEVEL OF ADDITIONAL DEDUCTION FOR
SELECTED INDUSTRIES.

PROVIDED, FURTHER, THAT IN NO SUCH CASE SHALL AN INCOME
TAX INCENTIVE BE EXTENDED BEYOND THE INITIAL GRANT OF
FIVE (5) YEARS, EXCEPT THOSE PROVIDED UNDER SECTION 294
{A)(7) AND (9), SECTIONS 295, 296, AND 297.

(8) EXEMPTION FROM CUSTOMS DUTY ON IMPORTATION OF
CAPITAL EQUIPMENT AND RAW MATERIALS DIRECTLY AND
EXCLUSIVELY USED IN THE REGISTERED ACTIVITY FOR A PERIOD
NOT EXCEEDING FIVE (5) YEARS BY REGISTERED ENTERPRISES:
PROVIDED, THAT THE FIVE YEARS LIMIT IN THIS SUBSECTION
SHALL NOT APPLY TO SPECIAL ECONOMIC ZONES AS DEFINED
UNDER THIS TITLE.


PROVIDED, FURTHER, THAT EXPANSION OF REGISTERED
ACTIVITIES MAY BE GRANTED DUTY EXEMPTION ON CAPITAL
EQUIPMENT ONLY, SUBJECT TO THE FOLLOWING CONDITIONS:

(1) THE ACTIVITY IS STILL COVERED BY THE
STRATEGIC INVESTMENTS PRIORITY PLAN (SIPP) OR IS
AN INNOVATION PROJECT AS DEFINED IN THE
STRATEGIC INVESTMENT PRIORITY PLAN;

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

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

SEC. 295. INCENTIVES FOR AGRIBUSINESS. AGRIBUSINESS
PROJECTS OR ACTIVITIES OF -REGISTERED ENTERPRISES
LOCATED OUTSIDE METRO MANILA AND OTHER URBAN AREAS AS
IDENTIFIED IN THE STRATEGIC INVESTMENT PRIORITY PLAN
SHALL BE ENTITLED TO ADDITIONAL TWO (2) YEARS OF INCENTIVE
UNDER SECTION 294, OF WHICH ONE (1) YEAR MAY BE AN
ADDITIONAL YEAR OF INCOME TAX HOLIDAY.

SEC. 296. PROJECTS LOCATED IN LESS DEVELOPED AREAS OR
THOSE RECOVERING FROM ARMED CONFLICT OR A MAJOR
DISASTER. PROJECTS OR ACTIVITIES OF REGISTERED
ENTERPRISES LOCATING IN LESS DEVELOPED AREAS AS
IDENTIFIED IN THE STRATEGIC INVESTMENT PRIORITY PLAN, OR
THOSE RECOVERING FROM ARMED CONFLICT AND/OR A MAJOR
DISASTER AS DETERMINED BY THE OFICE OF THE PRESIDENT
SHALL BE ENTITLED TO ADDITIONAL TWO (2) YEARS OF INCENTIVE
UNDER SECTION 294, OF WHICH ONE (1) YEAR MAY BE AN
ADDITIONAL YEAR OF INCOME TAX HOLIDAY.

SEC. 297. RELOCATION PROJECTS OR ACTIVITIES.
REGISTERED PROJECTS OR ACTIVITIES PRIOR TO THE
EFFECTIVITY OF THIS ACT RELOCATING FROM METRO MANILA AND
SELECTED AREAS OF REGIONS III AND IV-A TO OTHER AREAS OF
THE COUNTRY SHALL BE ENTITLED TO ADDITIONAL TWO (2) YEARS
OF INCENTIVE UNDER SECTION 294, OF WHICH ONE (1) YEAR MAY
BE AN ADDITIONAL YEAR OF INCOME TAX HOLIDAY.

CHAPTER III


GOVERNANCE OF FISCAL INCENTIVES

‘SEC. 298. COMPOSITION OF THE FIRB - FOR PURPOSES OF THIS ACT,
THE FISCAL INCENTIVES REVIEW BOARD OR 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
RECONSTITUTED AS FOLLOWS:

(A)

(B)

(C)

BOARD. - THE BOARD SHALL BE COMPOSED OF THE
SECRETARY OF FINANCE AS CHAIRPERSON, AND FOUR (4)
MEMBERS CONSISTING OF: (1) THE EXECUTIVE SECRETARY OF
THE OFFICE OF THE PRESIDENT; (2) THE SECRETARY OF
TRADE AND INDUSTRY; (3) THE DIRECTOR-GENERAL OF THE
NATIONAL ECONOMIC DEVELOPMENT AUTHORITY; AND (4) THE
SECRETARY OF BUDGET AND MANAGEMENT;

TECHNICAL COMMITTEE. - THE TECHNICAL COMMITTEE
SHALL BE COMPOSED OF AN UNDERSECRETARY OF FINANCE
DESIGNATED BY THE SECRETARY OF FINANCE AS
CHAIRPERSON AND SIX (6) MEMBERS CONSISTING OF: (1) A
DEPUTY OR ASSISTANT DEPUTY EXECUTIVE SECRETARY OF
THE OFFICE OF THE PRESIDENT; (2) AN UNDERSECRETARY OR
ASSISTANT SECRETARY OF TRADE AND INDUSTRY; (3) A
DEPUTY OR ASSISTANT DIRECTOR GENERAL OF NATIONAL
ECONOMIC DEVELOPMENT AUTHORITY; (4) AN
UNDERSECRETARY OR ASSISTANT SECRETARY OF BUDGET
AND MANAGEMENT; (5) THE COMMISSIONER OR DEPUTY
COMMISSIONER OF INTERNAL REVENUE; AND (6) THE
COMMISSIONER OR DEPUTY COMMISSIONER OF CUSTOMS.

SECRETARIAT. - THE NATIONAL TAX RESEARCH CENTER
(NTRC) SHALL BE THE SECRETARIAT OF THE FIRB. THE
EXECUTIVE DIRECTOR OF NTRC SHALL ACT AS HEAD OF THE
SECRETARIAT.

SEC. 299. EXPANDED FUNCTIONS OF THE FIRB. - THE POWERS

AND FUNCTIONS OF THE FIRB WHICH SHALL BE VESTED IN AND
EXERCISED BY THE BOARD SHALL BE EXPANDED AS FOLLOWS:

(A) TO EXERCISE OVERSIGHT FUNCTIONS OVER THE IPAS. FOR

THIS PURPOSE, THE FIRB SHALL:

(1)SET AND REVIEW THE GENERAL POLICY WITH REGARD
TO THE GRANT OF FISCAL INCENTIVES;


(2)REVIEW AND AUDIT THE COMPLIANCE OF IPAS AND
OGAS TO THE GENERAL POLICY ON INCENTIVES SET BY
THE FIRB AS MANDATED IN THIS ACT, THE STRATEGIC
INVESTMENT PRIORITY PLAN, AND THE RESPECTIVE
CHARTERS OF THE IPAS AND OGAS; AND IMPOSE
SANCTIONS ON VIOLATION OR NON-COMPLIANCE OF
IPAS AND OGAS SUCH AS BUT NOT LIMITED TO
SUSPENSION OR CANCELATION OF THEIR POWER TO
GRANT FISCAL INCENTIVES;

(3) CANCEL, SUSPEND, OR WITHDRAW THE ENJOYMENT OF
FISCAL INCENTIVES OF CONCERNED RBES AND ORES,
AND ENDORSE THE SAME TO THE CONCERNED
REVENUE AGENCIES FOR ASSESSMENT AND
COLLECTION OF TAXES AND DUTIES DUE, INCLUDING
FINES OR PENALTIES, IF WARRANTED, FOR THE
FOLLOWING REASONS: (A) FAILURE TO MAINTAIN THE
QUALIFICATIONS REQUIRED BY THE CONCERNED IPA
OR BY THE FIRB FOR AVAILMENT OF INCENTIVES; AND
(B) VIOLATION OF ANY PROVISIONS OF THIS ACT, RULES
AND REGULATIONS ISSUED UNDER THE RESPECTIVE
CHARTERS OF THE IPAS, OR OF THE TERMS AND
CONDITIONS OF REGISTRATION;

(4) REQUIRE IPAS AND OGAS TO SUBMIT, REGULARLY OR
WHEN NECESSARY, SUMMARIES OF APPROVED
INVESTMENT AND INCENTIVES GRANTED, AND FIRM- OR
ENTITY-LEVEL FISCAL INCENTIVES AND BENEFITS DATA
AS INPUT TO THE FIRB’S REVIEW AND AUDIT FUNCTION
AND EVALUATION OF PERFORMANCE OF RECIPIENTS OF
FISCAL INCENTIVES;

(5) PUBLISH THE NAMES OF THE RBES AND ORES WITH
DETAILED ESTIMATED AMOUNT OF FISCAL INCENTIVES,
TAX PAYMENTS, AND OTHER RELATED INFORMATION,
INCLUDING BENEFITS DATA; AND

(6)IN THE CASE OF VERTICAL ZONES, DETERMINE THE
MINIMUM CONTIGUOUS FLOOR AREA THAT ECONOMIC
ZONES SHOULD COMPLY WITH, SUCH AS BUT NOT
LIMITED TO BUILDINGS, SELECTED FLOORS WITHIN
BUILDINGS, AND SELECTED AREAS ON A FLOOR.


@OVOHRONA

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(B)

(c)

(D)

F)

(g)

(H)

TO APPROVE OR DISAPPROVE THE GRANT OF FISCAL
INCENTIVES TO SPECIAL PROJECTS/ACTIVITIES AS DEFINED
IN THIS ACT UPON THE RECOMMENDATION OF THE IPA BOARD:
PROVIDED, THAT FOR THESE SPECIAL PROJECTS/ACTIVITIES,
THE IPA BOARD SHALL RECOMMEND TO THE FIRB THE
APPROVAL OF SUCH GRANT OF FISCAL INCENTIVES ONLY
AFTER A THOROUGH REVIEW OF THE APPLICATION;

TO APPROVE APPLICATIONS FOR TAX SUBSIDIES TO GOCCS,
GOVERNMENT INSTRUMENTALITIES (GIS), GOVERNMENT
COMMISSARIES, AND STATE UNIVERSITIES AND COLLEGES
{SUCS);

TO CANCEL, SUSPEND, OR WITHDRAW THE ENJOYMENT OF
TAX SUBSIDY OF CONCERNED GOCCS, GIS, GOVERNMENT
COMMISSARIES, AND SUCS AND ENDORSE THE SAME TO THE
CONCERNED REVENUE AGENCIES FOR ASSESSMENT AND
COLLECTION OF TAXES AND DUTIES DUE, INCLUDING FINES OR
PENALTIES, IF WARRANTED, FOR VIOLATIONS OF ANY OF THE
CONDITIONS IMPOSED IN THE GRANT OF TAX SUBSIDY, OR
PROVISIONS OF THIS ACT, OR APPLICABLE RULES AND
REGULATIONS;

TO CONDUCT REGULAR MONITORING AND EVALUATION OF
INVESTMENT AND NON-INVESTMENT FISCAL INCENTIVES IN
ACCORDANCE WITH SECTION 306 OF THIS ACT, SUCH AS USING
COST-BENEFIT ANALYSIS (CBA), TO DETERMINE THEIR IMPACT
ON THE ECONOMY AND WHETHER AGREED PERFORMANCE
TARGETS ARE MET;

TO CHECK AND VERIFY REGULARLY THE COMPLIANCE OF
RBES WITH SPECIAL PROJECTS/ACTIVITIES GRANTED FISCAL
INCENTIVES BY THE FIRB WITH THE TERMS AND CONDITIONS
OF THEIR AVAILMENT, THE RELEVANT PROVISIONS AND RULES
AND REGULATIONS OF THIS ACT, AND OTHER RELEVANT LAWS
OR ISSUANCES;

TO DECIDE ON ISSUES, AFTER DUE HEARING, CONCERNING
THE APPROVAL, DISAPPROVAL, CANCELLATION, SUSPENSION,
WITHDRAWAL OR FORFEITURE OF FISCAL INCENTIVES OR TAX
SUBSIDY IN ACCORDANCE WITH THIS ACT;

TO REQUIRE THE SUBMISSION AND PRODUCTION OF
DOCUMENTS, RECORDS, BOOKS, OR OTHER DATA RELEVANT
OR MATERIAL TO THE EVALUATION OF APPLICATION FOR


FISCAL INCENTIVES AND TAX SUBSIDIES, FROM IPAS, OGAS,
RBES, ORES, GOCCS, GIS, GOVERNMENT COMMISSARIES, AND
SUCS, LOCAL GOVERNMENT UNITS (LGUS), AMONG OTHERS.

() TO OBTAIN INFORMATION, SUMMON, EXAMINE, INQUIRE AND
RECEIVE FROM IPAS, OGAS, RBES, ORES, GOCCS, GIS,
GOVERNMENT COMMISSARIES, SUCS, AND LGUS, DOCUMENTS,
RECORDS, BOOKS, OR OTHER DATA RELEVANT OR MATERIAL
TO THE RESOLUTION OF ISSUES ARISING FROM THE
APPROVAL, DISAPPROVAL, CANCELLATION, SUSPENSION,
WITHDRAWAL OR FORFEITURE OF FISCAL INCENTIVES OR TAX
SUBSIDY, OR IN IMPOSING PENALTIES FOR VIOLATIONS OF THE
TERMS AND CONDITIONS ON THE AVAILMENT OF FISCAL
INCENTIVES AND TAX SUBSIDY, OR ANY OF THE PROVISIONS
OF THIS ACT;

(J) TO SUBMIT ANNUAL REPORTS TO THE OFFICE OF THE
PRESIDENT, AS PART OF THE BUDGET PROCESS COVERING ITS
POLICY AND ACTIVITIES IN THE ADMINISTRATION OF THIS
ACT, INCLUDING RECOMMENDATIONS ON FISCAL INCENTIVE
POLICIES AND APPROVAL OF FISCAL INCENTIVES;

(K) TO FIX AND IMPOSE REASONABLE FEES AND CHARGES FOR
THE PROCESSING OF APPLICATIONS FOR FISCAL INCENTIVES
OR TAX SUBSIDIES: PROVIDED, THAT THE PROCEEDS THEREOF
SHALL ACCRUE DIRECTLY AND AUTOMATICALLY TO THE FIRB.

(L) TO EXERCISE ALL OTHER POWERS NECESSARY OR
INCIDENTAL TO ATTAIN THE PURPOSES OF THIS ACT AND
OTHER LAWS VESTING ADDITIONAL FUNCTIONS ON THE FIRB;
AND

(M) TO PROMULGATE SUCH RULES AND REGULATIONS AS MAY BE
NECESSARY TO IMPLEMENT THE INTENT AND PROVISIONS OF
THIS ACT.

PROVIDED, THAT, AS CHAIR OF THE FIRB AND AS THE CUSTODIAN
OF FISCAL PRUDENCE AND RESPONSIBILITY, THE SECRETARY OF
FINANCE SHALL EXERCISE OVERSIGHT FUNCTIONS AND SHALL
HAVE VETO POWER OVER THE APPROVAL AND CANCELLATION OF
TAX INCENTIVES UNDER SEC. 302 HEREOF.

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


PROVIDED, FINALLY, THAT THE NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY (NEDA) AND THE DEPARTMENT OF
TRADE AND INDUSTRY (DTI) SHALL BE MEMBERS OF ALL THE
EXISTING AND FUTURE IPAS.

SEC. 300. ROLES AND RESPONSIBILITIES OF THE TECHNICAL
COMMITTEE. - THE TECHNICAL COMMITTEE SHALL HAVE THE
FOLLOWING ROLES AND RESPONSIBILITIES:

(A)

(B)

(C)

(D)

TO EVALUATE APPLICATIONS FOR FISCAL INCENTIVES AND
TAX SUBSIDIES FORWARDED BY THE SECRETARIAT;

TO RECOMMEND TO THE BOARD THE APPROVAL,
DISAPPROVAL, SUSPENSION, OR WITHDRAWAL OF FISCAL
INCENTIVES AND TAX SUBSIDIES AND PERTINENT MATTERS
RELATIVE THERETO;

TO ASSIST THE BOARD IN THE EFFECTIVE DISCHARGE OF ITS
FUNCTIONS AND RECOMMEND OTHER POLICIES AND
MEASURES DEEMED NECESSARY TO CARRY OUT THE
OBJECTIVES OF THIS ACT; AND

TO PERFORM OTHER FUNCTIONS AS MAY BE DIRECTED BY THE
BOARD.

SEC. 301. ROLES AND RESPONSIBILITIES OF THE SECRETARIAT. -
THE SECRETARIAT SHALL HAVE THE FOLLOWING ROLES AND
RESPONSIBILITIES:

(a)

(B)

TO RECEIVE, REVIEW, AND PROCESS APPLICATIONS ON FISCAL
INCENTIVES COVERING SPECIAL PROJECTS/ACTIVITIES OF
REGISTERED BUSINESS ENTERPRISES, SUBSIDIES OF GOCCS,
GIS, GOVERNMENT COMMISSARIES AND SUCS, AND OTHER
MATTERS REGARDING FISCAL INCENTIVES AND TAX
SUBSIDIES, AND RECOMMEND TO THE TECHNICAL COMMITTEE
THE APPROVAL, DISAPPROVAL, SUSPENSION, OR WITHDRAWAL
OF FISCAL INCENTIVES AND TAX SUBSIDIES AND OTHER
PERTINENT MATTERS RELATIVE THERETO;

TO ASSIST THE BOARD IN THE MONITORING AND EVALUATION
OF INVESTMENT AND NON-INVESTMENT FISCAL INCENTIVES
AND TAX SUBSIDIES IN ACCORDANCE WITH SECTION 306 OF
THIS ACT; .


(o)

(D)

(E)

(F)

(G)

TO MAINTAIN, ORGANIZE, AND SECURE DATA RECEIVED FROM
OTHER ENTITIES, SUCH AS BUT NOT LIMITED TO IPAS, OGAS,
RBES, AND ORES;

TO PREPARE THE AGENDA, MINUTES, TRANSCRIPTIONS OF
THE MEETINGS, AND SUCH OTHER DOCUMENTS AS MAY BE
REQUIRED BY THE BOARD OR THE TECHNICAL COMMITTEE;

TO ACT AS THE CUSTODIAN OF ALL FIRB RECORDS AND
DOCUMENTS;

TO COLLECT AND RECEIVE REASONABLE FEES AND CHARGES
FOR THE PROCESSING OF APPLICATIONS FOR FISCAL
INCENTIVES OR SUBSIDIES; AND

TO PERFORM SUCH OTHER DUTIES AS MAY BE ASSIGNED BY
THE TECHNICAL COMMITTEE AND THE BOARD.

SEC. 302. COVERAGE AND SCOPE OF THE POWER OF THE FIRB TO
GRANT FISCAL INCENTIVES. - THE FIRB HAS THE POWER TO GRANT

FISCAL

INCENTIVES TO THE FOLLOWING SPECIAL

PROJECTS/ACTIVITIES AS DEFINED UNDER SEC. 293(I) OF THIS ACT.

(a)

(B)

(c)

REGISTERED PROJECTS WITH INVESTMENT AMOUNT OF FIFTY
MILLION PESOS (PHP 50,000,000) AND ABOVE;

REGISTERED PROJECTS OR ACTIVITIES THAT POSE RISK TO
THE ENVIRONMENT, HEALTH AND ECONOMIC STABILITY. THE
FIRB JOINTLY WITH THE IPAS AND IN CONSULTATION WITH
THE DOH, DENR, NEDA, AND OTHER CONCERNED AGENCIES
SHALL DETERMINE WHICH PROJECTS AND ACTIVITIES FALL
UNDER THIS CATEGORY AS MAY PROVIDED IN THE
IMPLEMENTING RULES AND REGULATIONS OF THIS ACT; AND

REGISTERED PROJECTS OR ACTIVITIES WHOSE APPROVAL IN
THE IPA BOARD LEVEL DOES NOT MEET THE MINIMUM
REQUIRED VOTES OF AT LEAST TWO-THIRDS. FOR THIS
PURPOSE, THE IPA BOARD SHALL ELEVATE TO THE FIRB
THESE TYPES OF PROJECTS OR ACTIVITIES TOGETHER WITH
THE ENTIRE DOCKET, FOR APPROPRIATE ACTION.

SEC. 303. REVIEW OF APPLICATIONS FOR FISCAL INCENTIVES ON
SPECIAL PROJECTS AND ACTIVITIES. - AFTER A DETERMINATION THAT
THE APPLICATION FALLS UNDER THE SPECIAL PROJECTS/ACTIVITIES


Soovomson

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ENUMERATED IN THE PREVIOUS SECTION, THE IPA CONCERNED SHALL
FORWARD THE ENTIRE APPLICATION DOCKET TO THE FIRB FOR ITS
REVIEW AND APPROVAL.

WITHIN FIFTEEN (15) WORKING DAYS FROM THE RECEIPT THEREOF, THE
SECRETARIAT SHALL ENSURE THE COMPLETENESS OF THE DOCUMENTS
SUBMITTED, CONDUCT AN INITIAL EVALUATION OF THE DOCUMENTS
SUBMITTED, AND ELEVATE ITS RECOMMENDATION TO THE TECHNICAL
COMMITTEE FOR THEIR REVIEW AND EVALUATION. THE TECHNICAL
COMMITTEE SHALL HAVE TEN (10) WORKING DAYS TO ISSUE THEIR
RECOMMENDATION AND SUBMIT THE SAME TO THE BOARD FOR
APPROPRIATE ACTION.

SEC. 304. ISSUANCE OF THE FIRB RESOLUTION AND CERTIFICATE
OF ENTITLEMENT TO FISCAL INCENTIVES. - THE BOARD SHALL ISSUE ITS
RESOLUTION WITHIN FIVE (5) WORKING DAYS FROM RECEIPT OF THE
RECOMMENDATION OF THE TECHNICAL COMMITTEE. IF THE
APPLICATION FOR FISCAL INCENTIVES IS APPROVED, A CERTIFICATE OF
ENTITLEMENT TO FISCAL INCENTIVES SHALL BE ISSUED TO THE
APPLICANT.

CHAPTER IV
FISCAL INCENTIVES MANAGEMENT AND TRANSPARENCY

SEC. 305. FILING OF TAX RETURNS AND SUBMISSION OF FISCAL
INCENTIVES REPORTS. — ALL RBES AND ORES WHETHER TAXABLE OR
EXEMPT, ARE REQUIRED TO FILE THEIR TAX RETURNS AND PAY THEIR
TAX LIABILITIES, ON OR BEFORE THE DEADLINE AS PROVIDED UNDER
THE NIRC, AS AMENDED, USING THE ELECTRONIC SYSTEM FOR FILING
AND PAYMENT OF TAXES WITH THE BIR.

FOR RBES AND ORES AVAILING OF INCENTIVES ADMINISTERED BY THE
IPAS AND OGAS, THEY SHALL FILE WITH THEIR RESPECTIVE IPAS OR
OGAS A COMPLETE ANNUAL FISCAL INCENTIVES REPORT OF THEIR
INCOME-BASED FISCAL INCENTIVES, VALUE-ADDED TAX EXEMPTIONS
AND ZERO-RATING, AND CUSTOMS DUTY EXEMPTIONS, DEDUCTIONS,
CREDITS OR EXCLUSIONS FROM THE INCOME TAX BASE, AND
EXEMPTIONS FROM LOCAL TAXES, AS PROVIDED IN THE CHARTER OF
THE IPA CONCERNED OR OGA, AND RESPECTIVE LAWS, AND BENEFITS
DATA SUCH AS BUT NOT LIMITED TO THE ACTUAL AMOUNT OF
INVESTMENTS, TAXES PAID, WITHHELD, AND FOREGONE, EMPLOYMENT
IMPACT, AND EXPORTS, IMPORTS, AND DOMESTIC INPUTS WITHIN
THIRTY (30) CALENDAR DAYS FROM THE STATUTORY DEADLINE FOR
FILING OF TAX RETURNS AND PAYMENT OF TAXES; PROVIDED, THAT, A


COPY OF THE REPORT SHALL BE SIMULTANEOUSLY SUBMITTED TO THE
FIRB IN ELECTRONIC FORM.

THE IPAS AND OGAS SHALL, WITHIN SIXTY (60) CALENDAR DAYS FROM
THE END OF THE STATUTORY DEADLINE FOR FILING OF THE RELEVANT
TAX RETURNS, SUBMIT TO THE BIR, THEIR RESPECTIVE ANNUAL FISCAL
INCENTIVES REPORTS BASED ON THE LIST OF THE RBES AND ORES
WHICH HAVE FILED SAID FISCAL INCENTIVES REPORT.

THE DETAILS OF THE FISCAL INCENTIVES REPORTS, AS PROVIDED IN
THE PRECEDING PARAGRAPHS, SHALL BE PROVIDED IN THE IRR OF THIS
ACT.

THE FOREGOING PROVISIONS SHALL BE WITHOUT PREJUDICE TO THE
RIGHT OF THE BIR AND THE BUREAU OF CUSTOMS (BOC) TO ASSESS
AND/OR AUDIT TAX LIABILITIES, IF ANY, WITHIN THE PRESCRIBED
PERIOD PROVIDED IN THE NIRC, AS AMENDED, AND THE CUSTOMS
MODERNIZATION AND TARIFF ACT (CMTA), AS AMENDED,
RESPECTIVELY.

SEC. 306. MONITORING, EVALUATION AND REPORTING OF FISCAL
INCENTIVES. — THE BIR AND THE BOC SHALL SUBMIT TO THE DOF
NOTWITHSTANDING ANY LAW TO THE CONTRARY: (A) THE TAX AND DUTY
INCENTIVES OF RBES AND ORES AS REFLECTED IN THEIR FILED TAX
RETURNS AND IMPORT ENTRIES; AND (B) ACTUAL TAX AND DUTY
INCENTIVES AS EVALUATED AND DETERMINED BY THE BIR AND THE
Boc.

THE DOF SHALL MAINTAIN A SINGLE DATABASE FOR MONITORING AND
ANALYSIS OF FISCAL INCENTIVES GRANTED.

THE FIRB IS MANDATED TO CONDUCT A SYSTEMATIC COLLECTION OF
INFORMATION FROM THE DOF, IPAS, OGAS, RBES AND ORES, AS WELL
AS EVALUATE AND ASSESS THE PROCESS, OUTCOMES, AND IMPACT OF
INCENTIVES GRANTED TO FIRMS TO DETERMINE WHETHER AGREED
PERFORMANCE TARGETS AND INTENDED RESULTS AND OUTCOMES ARE
MET. THE METHOD OF EVALUATION MAY INCLUDE THE CONDUCT OF
COST-BENEFIT ANALYSIS OR OTHER PROCESS AND IMPACT EVALUATION
METHODS: PROVIDED, THAT FOR PURPOSES OF THIS ACT, THE TERM
COST-BENEFITS ANALYSIS REFERS TO THE SYSTEMATIC EVALUATION
OF THE TOTAL COSTS OF GRANTING FISCAL INCENTIVES VIS-A-VIS THE
TOTAL BENEFITS DERIVED FROM THE GRANT OF FISCAL INCENTIVES
BASED ON THE ANNUAL FISCAL INCENTIVE REPORT AND OTHER
RELATED SOURCES, TO CALCULATE THE NET BENEFIT OR COST
ASSOCIATED TO FISCAL INCENTIVES AND EVALUATE THE OVERALL
IMPACT OF FISCAL INCENTIVES IN MONETIZED TERMS.


FOR PURPOSES OF MONITORING AND TRANSPARENCY, THE DOF SHALL
SUBMIT TO THE DBM AGGREGATE DATA ON A SECTORAL AND PER
INDUSTRY BASIS OF: (1) THE AMOUNT OF FISCAL INCENTIVES AVAILED
BY RBES AND ORES; (2) THE ESTIMATE CLAIMS OF FISCAL INCENTIVES
IMMEDIATELY PRECEDING THE CURRENT YEAR; (3) THE PROGRAMMED
FISCAL INCENTIVES FOR THE CURRENT YEAR; AND (4) THE PROJECTED
FISCAL INCENTIVES FOR THE FOLLOWING YEAR. SUCH INFORMATION
SHALL BE GIVEN TO THE JOINT CONGRESSIONAL OVERSIGHT
COMMITTEE CREATED UNDER SECTION 9 OF RA NO. 10708 OR THE
TIMTA LAW.

THE AFORESAID DATA SHALL BE REFLECTED BY THE DBM IN THE
ANNUAL BUDGET OF EXPENDITURES AND SOURCES OF FINANCING
(BESF), WHICH SHALL BE KNOWN AS THE FISCAL INCENTIVES
INFORMATION (FII) SECTION: PROVIDED, THAT THE FIl SHALL BE
LIMITED TO THE AGGREGATE DATA RELATED TO INCENTIVES AVAILED
OF BY RBES AND ORES BASED ON THE SUBMISSIONS OF THE DOF AND
THE CONCERNED IPAS AND OGAS, CATEGORIZED BY SECTOR, BY IPA OR
OGA AND BY TYPE OF FISCAL INCENTIVE.

NOTHING IN THIS ACT SHALL BE CONSTRUED TO DIMINISH OR LIMIT, IN
WHATEVER MANNER, THE AMOUNT OF INCENTIVES THAT THE IPAS OR
OGAS MAY GRANT PURSUANT TO THEIR CHARTERS AND EXISTING LAWS;
OR TO PREVENT, DETER, OR DELAY THE PROMOTION AND REGULATION
OF INVESTMENTS, PROCESSING OF APPLICATIONS FOR REGISTRATIONS,
AND EVALUATION OF ENTITLEMENT OF INCENTIVES BY IPAS OR OGAS.

SEC. 307. PENALTIES FOR NONCOMPLIANCE WITH FILING AND
REPORTORIAL REQUIREMENTS. — ANY RBE OR ORE WHICH FAILS TO
COMPLY WITH FILING AND REPORTORIAL REQUIREMENTS WITH THE
APPROPRIATE IPAS OR OGAS AND/OR WHICH FAILS TO SHOW PROOF OF
FILING OF TAX RETURNS USING THE ELECTRONIC SYSTEM FOR FILING
AND PAYMENT OF TAXES OF THE BIR UNDER SECTION 305 HEREOF,
SHALL BE IMPOSED THE FOLLOWING PENALTIES BY THE APPROPRIATE
IPA OR OGA: .

(A) FIRST VIOLATION - PAYMENT OF A FINE AMOUNTING TO ONE
HUNDRED THOUSAND PESOS (P100,000.00);

(B) SECOND VIOLATION - PAYMENT OF A FINE AMOUNTING TO FIVE
HUNDRED THOUSAND PESOS (P500,000.00); AND

(C) THIRD VIOLATION - CANCELLATION OF THE REGISTRATION OF
THE REGISTERED BUSINESS ENTERPRISE OR REGISTERED
ENTITY WITH THE IPA OR OGA.


PROVIDED, THAT IF THE FAILURE TO SHOW SUCH PROOF IS NOT DUE TO
THE FAULT OF THE RBES OR ORES, THE SAME SHALL NOT BE A GROUND
FOR THE SUSPENSION OF THE ITH AND/OR OTHER FISCAL INCENTIVES
AVAILMENT: PROVIDED, FURTHER THAT COLLECTIONS FROM THE
PENALTIES SHALL ACCRUE TO THE GENERAL FUND.

ANY GOVERNMENT OFFICIAL OR EMPLOYEE WHO FAILS WITHOUT
JUSTIFIABLE REASON TO PROVIDE OR FURNISH THE REQUIRED FISCAL
INCENTIVES REPORT OR OTHER DATA OR INFORMATION AS REQUIRED
UNDER SECTIONS 305 AND 306 OF THIS ACT SHALL BE PENALIZED,
AFTER DUE PROCESS, BY A FINE EQUIVALENT TO THE OFFICIAL’S OR
EMPLOYEE’S BASIC SALARY FOR A PERIOD OF ONE (1) MONTH TO SIX (6)
MONTHS OR BY SUSPENSION FROM GOVERNMENT SERVICE FOR NOT
MORE THAN ONE (1) YEAR, OR BOTH, IN ADDITION TO ANY CRIMINAL AND
ADMINISTRATIVE PENALTIES IMPOSABLE UNDER EXISTING LAWS.

CHAPTER V
SUSPENSION AND FORFEITURE OF FISCAL INCENTIVES

SEC. 308. SUSPENSION OF INCENTIVES. - THE FIRB MAY SUSPEND
AND/OR FORFEIT THE INCENTIVES GRANTED TO THE RBES OR ORES
WHENEVER THERE ARE VIOLATIONS OF THE TERMS AND CONDITIONS
ON THE AVAILMENT OF INCENTIVES BY THE LATTER, WITHOUT
PREJUDICE TO THE CANCELLATION OF THE REGISTRATION OF SAID
ENTERPRISES.

SEC. 309. CANCELLATION OF CERTIFICATE OF ENTITLEMENT TO
FISCAL INCENTIVES OR CERTIFICATE OF ENTITLEMENT TO TAX SUBSIDY.
- IN CASE OF CANCELLATION OF CERTIFICATE OF ENTITLEMENT TO
FISCAL INCENTIVES OR CERTIFICATE OF ENTITLEMENT TO TAX
SUBSIDY, THE FIRB SHALL ENDORSE ITS DECISION TO THE CONCERNED
REVENUE AGENCIES FOR PROPER ASSESSMENT AND COLLECTION OF
TAXES, CUSTOMS DUTIES, AND ANY APPLICABLE PENALTIES THEREON.

CHAPTER VI
ADMINISTRATIVE REMEDIES

SEC. 310. PERIOD OF FILING. - A REQUEST FOR RECONSIDERATION
OF THE DENIAL OF THE APPLICATION FOR TAX SUBSIDY OR FISCAL
INCENTIVES, MAY BE FILED WITH THE FIRB, WITHIN FIFTEEN (15)
WORKING DAYS FROM THE RECEIPT OF NOTICE OF
DENIAL/SUSPENSION/FORFEITURE.


SEC. 311. RESOLUTION OF MOTION. - THE REQUEST FOR
RECONSIDERATION SHALL BE RESOLVED WITHIN THIRTY (30) WORKING
DAYS FROM THE DATE IT WAS SUBMITTED.

SEC. 312. NO SECOND MOTION FOR RECONSIDERATION. - NO
SECOND MOTION FOR RECONSIDERATION SHALL BE ENTERTAINED.

CHAPTER VII
QUALIFIED ACTIVITIES FOR TAX INCENTIVES

SEC. 313. ‘STRATEGIC INVESTMENTS PRIORITY PLAN’ (SIPP). - THE
BOARD OF INVESTMENTS (BOI), IN COORDINATION WITH THE OFFICE OF
THE PRESIDENT, THE FIRB, THE CONCERNED IPAS, AND OTHER
GOVERNMENT AGENCIES AND THE PRIVATE SECTOR, SHALL
FORMULATE THE SIPP TO BE SUBMITTED TO THE PRESIDENT FOR HIS
APPROVAL NOT LATER THAN DECEMBER OF THE THIRD YEAR SET FOR
PERIODIC REVIEW. THE PLAN SHALL BE VALID FOR A PERIOD OF THREE
(3) YEARS SUBJECT TO REVIEW AND AMENDMENT, OR AS THE NEED
ARISES. ALL SECTORS OR INDUSTRIES THAT MAY BE INCLUDED IN THE
SIPP SHALL UNDERGO AN EVALUATION PROCESS TO DETERMINE THE
SUITABILITY AND POTENTIAL OF THE INDUSTRY OR THE SECTOR IN
PROMOTING LONG-TERM GROWTH AND DEVELOPMENT, AND THE
NATIONAL INTEREST.

THE SIPP SHALL:
(A)INCLUDE ACTIVITIES THAT COMPLY WITH THE FOLLOWING:
(1) THE ACTIVITY SHALL BE COVERED BY THE
PHILIPPINE DEVELOPMENT PLAN OR ITS
EQUIVALENT AND OTHER GOVERNMENT
PROGRAMS;

(2) THE ACTIVITY SHALL TAKE INTO ACCOUNT ANY
OF THE FOLLOWING:

(A) SUBSTANTIAL AMOUNT OF INVESTMENTS;

(B) CONSIDERABLE GENERATION OF
EMPLOYMENT;


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(C) ADOPT INCLUSIVE BUSINESS ACTIVITIES
AND VALUE ADDING PRODUCTION BY
MSMES;

(D) USE OF MODERN OR NEW TECHNOLOGY;

C2) ADOPTION OF ADEQUATE
ENVIRONMENTAL PROTECTION SYSTEMS;

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

(G) PROMOTION OF MARKET
COMPETITIVENESS.

(B)IDENTIFY AGRIBUSINESS PROJECTS OR’ ACTIVITIES, AND
PROJECTS AND ACTIVITIES IN AREAS THAT ARE LESS
DEVELOPED OR THOSE RECOVERING FROM ARMED CONFLICT
OR MAJOR DISASTER.

(C)DETERMINE SERVICES AND ACTIVITIES THAT CAN SPUR
REGIONAL OR GLOBAL OPERATIONS IN THE COUNTRY.

(D)INCLUDE EXISTING REGISTERED PROJECTS OR ACTIVITIES
THAT SHALL RELOCATE FROM METRO MANILA TO OTHER
AREAS OF THE COUNTRY.

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

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

SEC. 314. POWER OF THE PRESIDENT TO GRANT INCENTIVES. - 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 IN
ADDITION TO THOSE THAT ARE PROVIDED UNDER THIS CODE,
INCLUDING A LONGER PERIOD, TO HIGHLY DESIRABLE PROJECTS:


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PROVIDED, THAT THE BENEFITS THAT THE GOVERNMENT MAY DERIVE
FROM SUCH INVESTMENT THERETO IS CLEAR AND CONVINCING AND FAR
OUTWEIGH THE COST OF INCENTIVES THAT WILL BE GRANTED.

SEC. 314-A. CRITERIA FOR AVAILMENT. THE BOARD OF
INVESTMENTS SHALL CONSIDER THE FOLLOWING CRITERIA IN
DETERMINING THE TYPES OF INCENTIVES AND THE DURATION THEREOF
THAT MAY BE GRANTED: .

(A) THE PROJECT HAS A COMPREHENSIVE SUSTAINABLE
DEVELOPMENT PLAN WITH CLEAR INCLUSIVE BUSINESS
APPROACHES AND INNOVATIONS; OR

(B) MINIMUM INVESTMENT OF FIVE HUNDRED MILLION US
DOLLARS (US$500,000,000) OR A MINIMUM DIRECT
EMPLOYMENT GENERATION OF AT LEAST ONE THOUSAND
FIVE HUNDRED (1,500) WITHIN THREE YEARS FROM THE
START OF COMMERCIAL OPERATION.

THE THRESHOLD SHALL BE SUBJECT TO A PERIODIC REVIEW EVERY
THREE (3) YEARS TAKING INTO CONSIDERATION INTERNATIONAL
STANDARDS AND OTHER INDICATORS.

THE BOI MAY IMPOSE OTHER TERMS AND CONDITIONS TAKING
INTO CONSIDERATION THE AMOUNT OR KIND OF INCENTIVES THAT
WILL BE GRANTED TO SUCH INVESTMENTS.

SEC. 314-B. USE OF RESOURCES. - IN THE EXERCISE OF THE POWER
OF THE PRESIDENT TO GRANT INCENTIVES, THE GOVERNMENT MAY
UTILIZE ITS RESOURCES SUCH AS LAND USE, WATER APPROPRIATION,
POWER PROVISION, AMONG OTHERS, AS MAY BE IDENTIFIED BY THE BOI.

SEC. 315. AMENDMENTS. - SUBJECT TO PUBLICATION
REQUIREMENTS AND THE CRITERIA FOR INVESTMENT PRIORITY
DETERMINATION, THE BOI MAY, AT ANY TIME, INCLUDE ADDITIONAL
AREAS IN THE SIPP, ALTER ANY OF THE TERMS OF THE DECLARATION
OF AN INVESTMENT AREA, AND TEMPORARILY OR PERMANENTLY
SUSPEND ACTIVITIES ON THE SIPP IF IT CONSIDERS THAT SUCH
ACTIVITY IS NO LONGER A PRIORITY. IN NO CASE SHALL THE IPAS
ACCEPT APPLICATIONS UNLESS THE ACTVITY IS LISTED IN THE SIPP.

SEC. 316. PUBLICATION. - UPON APPROVAL OF THE PLAN, IN WHOLE
OR IN PART, OR UPON APPROVAL OF AN AMENDMENT THEREOF, THE
PLAN OR THE AMENDMENT, SPECIFYING AND DECLARING THE AREAS OF
INVESTMENTS SHALL BE PUBLISHED IN AT LEAST ONE (1) NEWSPAPER
OF GENERAL CIRCULATION OR THE OFFICIAL GAZETTE AND ALL SUCH


AREAS SHALL BE OPEN FOR APPLICATION UNTIL PUBLICATION OF AN
AMENDMENT OR DELETION THEREOF.

SEC. 317. QUALIFICATIONS OF A REGISTERED ENTERPRISE FOR TAX
INCENTIVES. - IN THE REVIEW AND GRANT OF TAX INCENTIVES, A
REGISTERED ENTERPRISE MUST:

A. BE ENGAGED IN AN ACTIVITY INCLUDED IN THE SIPP;

B. 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 IPA SHOULD SO REQUIRE;

Cc. COMPLY WITH THE E-INVOICE AND E-SALES REQUIREMENT
IN ACCORDANCE WITH SECTION 237-A OF THIS CODE.

CHAPTER VIII
AVAILMENT OF TAX INCENTIVES

SEC. 318. INCOME TAX-BASED INCENTIVES. - ALL REGISTERED
ENTERPRISES ARE REQUIRED TO FILE ALL THEIR TAX RETURNS USING
THE ELECTRONIC FACILITIES OF THE BUREAU OF INTERNAL REVENUE
(BIR). IN AVAILING THE INCOME TAX-BASED INCENTIVES, THE
REGISTERED ENTERPRISE SHALL BE REQUIRED TO SECURE A
CERTIFICATE OF ENTITLEMENT ISSUED BY THE IPA AND ATTACH THE
SAME TO ITS INCOME TAX RETURN (ITR) OR ANNUAL INFORMATION
RETURN (AIR), WHICHEVER IS APPLICABLE. THEREAFTER, THE
REGISTERED ENTERPRISE SHALL FILE ITS CLAIM WITH THE BIR FOR
VALIDATION. .

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

SEC. 319. 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 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 QUALITY AND AT
REASONABLE PRICES. PRIOR APPROVAL OF THE IPA MAY BE
SECURED FOR THE PART TIME UTILIZATION OF SAID
EQUIPMENT IN A NON-REGISTERED ACTIVITY TO MAXIMIZE
USAGE THEREOF: PROVIDED, THAT 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 THAT IT SHALL BE
USED FOR A 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 THE SALE,
TRANSFER OR DISPOSITION OF THE CAPITAL EQUIPMENT AND/OR
SPARE PARTS WHICH WERE GRANTED TAX AND CUSTOMS DUTY
EXEMPTION HEREUNDER, AND 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;

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


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

(4) FOR REASONS OF PROVEN TECHNICAL
OBSOLESCENCE.

PROVIDED, THAT IF THE REGISTERED ENTERPRISE SELLS, TRANSFERS
OR DISPOSES THE AFOREMENTIONED IMPORTED ITEMS WITHOUT PRIOR
APPROVAL, THE REGISTERED ENTERPRISE AND THE VENDEE,
TRANSFEREE, OR ASSIGNEE SHALL BE SOLIDARILY LIABLE TO PAY
TWICE THE AMOUNT OF THE DUTY EXEMPTION THAT SHOULD HAVE
BEEN PAID DURING ITS IMPORTATION: PROVIDED, FURTHER, THAT EVEN
IF THE SALE, TRANSFER OR DISPOSITION OF THE CAPITAL EQUIPMENT
WAS MADE AFTER FIVE (5) YEARS FROM DATE OF IMPORTATION WITH
THE APPROVAL OF THE IPA, THE REGISTERED ENTERPRISE IS STILL
LIABLE TO PAY THE DUTIES BASED ON THE NET BOOK VALUE OF THE
CAPITAL EQUIPMENT IF IT HAS VIOLATED ANY OF ITS REGISTRATION
TERMS AND CONDITIONS.

CHAPTER IX
MISCELLANEOUS PROVISIONS

SEC. 320. SUBMISSION OF ANNUAL REPORT TO THE PRESIDENT AND
CONGRESS. - A REPORT SHALL BE SUBMITTED ANNUALLY TO THE
PRESIDENT OF THE PHILIPPINES AND THE CONGRESS SUMMARIZING
THE TAX SUBSIDIES AND FISCAL INCENTIVES GRANTED BY THE FIRB,
IPAS AND OGAS, AS WELL AS THE RESULT OF THE MONITORING AND
EVALUATION OF FISCAL INCENTIVES.

CHAPTER X
FINAL PROVISIONS
SEC. 321. NO DOUBLE REGISTRATION OF ENTERPRISES. --
REGISTERED ENTERPRISES SHALL NOT BE ALLOWED TO REGISTER
THEIR ACTIVITIES IN MORE THAN ONE (1) IPA.
SEC. 322. 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 FIVE (5) YEARS FROM DATE OF REGISTRATION.

SEC. 323. 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 OTHER TAX INCENTIVES GRANTED TO EXISTING
REGISTERED ACTIVITIES, SUCH AS THE FIVE PERCENT (5%) TAX ON
GROSS INCOME EARNED IN LIEU OF ALL TAXES, BOTH NATIONAL AND
LOCAL, SHALL BE ALLOWED TO CONTINUE FOLLOWING THE SCHEDULE
STATED HEREIN: .

(A) TWO (2) YEARS FOR ACTIVITIES ENJOYING THE TAX
INCENTIVE FOR MORE THAN TEN (10) YEARS;

(B) THREE (3) YEARS FOR ACTIVITIES ENJOYING THE TAX
INCENTIVE BETWEEN FIVE (5) AND TEN (10) YEARS;

(C) FIVE (5) YEARS FOR ACTIVITIES ENJOYING THE TAX
INCENTIVE BELOW FIVE (5) YEARS.

PROVIDED, THAT THE FIVE PERCENT (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. 324. SUSPENSION AND FORFEITURE OF TAX INCENTIVES OF
REGISTERED ENTERPRISES, REFUND AND PENALTIES; WAIVER AND
CONDONATION. - THE IPA MAY IMPOSE FINES AND PENALTIES, SUSPEND
AND/OR FORFEIT THE INCENTIVES GRANTED TO THE REGISTERED
ENTERPRISES WHENEVER THERE ARE VIOLATIONS OF THE
REGISTRATION TERMS AND CONDITIONS BY THE LATTER, WITHOUT
PREJUDICE TO THE CANCELLATION OF THE REGISTRATION OF SAID
ENTERPRISE.

WHEN THERE IS PROBABLE CAUSE TO BELIEVE THAT THE
REGISTERED ENTERPRISE HAS VIOLATED ITS REGISTRATION TERMS
AND CONDITIONS, THE IPA SHALL SUSPEND THE AVAILMENT OF
INCENTIVES UNTIL PROVEN OTHERWISE: PROVIDED, THAT FOR
PROJECTS OR ACTIVITIES UNDER SECTION 302, THE CONCERNED IPA
SHALL RECOMMEND TO THE FIRB THE SUSPENSION OF ITS AVAILMENT
OF INCENTIVES.

IN CASE OF CANCELLATION OF THE CERTIFICATE OF
REGISTRATION, THE CONCERNED IPA MAY, IN APPROPRIATE CASES,


REQUIRE PAYMENT OF TAXES, CUSTOMS DUTIES AND ANY APPLICABLE
PENALTIES THEREON TO THE APPROPRIATE AGENCY, AND IMPOSE
ADDITIONAL FINES AND PENALTIES.

FOR THIS PURPOSE, THE IPAS SHALL PREPARE A SCHEDULE OF
FEES, FINES AND PENALTIES TO BE IMPOSED ON ERRING REGISTERED
ENTERPRISES DEPENDING ON THE GRAVITY OF THE VIOLATION
INCURRED.

IN MERITORIOUS CASES, THE IPA MAY WAIVE, CONDONE OR
REDUCE FINES OR PENALTIES IMPOSED ON REGISTERED ENTERPRISES
BY THE IPAS: PROVIDED, THAT THE MINIMUM COMPROMISE RATE, IN
CASE OF REDUCTION, SHALL NOT BE LESS THAN FORTY PERCENT (40%)
OF THE BASIC ASSESSED FINES OR PENALTIES.

SEC. 325. ENHANCED TAX EXPENDITURE FUND SYSTEM - ALL
INTERNAL REVENUE TAX AND DUTY OBLIGATIONS OF GOVERNMENT-
OWNED AND/OR CONTROLLED CORPORATIONS SHALL BE CHARGEABLE
TO THE TAX EXPENDITURE FUND OF THE GOVERNMENT UPON THE
ESTABLISHMENT AND IMPLEMENTATION OF AN ENHANCED TAX
EXPENDITURE FUND SYSTEM THAT GRANTS TAX SUBSIDY WITHIN
THIRTY (30) DAYS FROM THE FILING OF APPLICATION WITH THE FIRB.

SEC. 326. THE NAME OF RECIPIENTS OF INCENTIVES AND THE
AMOUNT OF INCENTIVES AVAILED SHALL BE REPORTED BY THE
INVESTMENT PROMOTION AGENCIES ANNUALLY TO CONGRESS, THE
REPORT SHALL BE MADE AVAILABLE TO THE PUBLIC.

SEC. 37. Title XII of the National Internal Revenue Code of 1997, as amended,
is hereby retitled as Title XIV.

SEC. 38. Title XIV of the National Internal Revenue Code of 1997, as amended,
is hereby retitled as Title XV.

SEC. 39. Amendatory Clause. —

(A) To ensure that the DOF, NEDA and DTI are represerited in the Governing
Boards of all IPAS, where the DOF shall automatically serve as Co-chair, and
DTI and NEDA as members, pursuant to Section 299 of this Act, the following
provisions, among others, are amended accordingly:

(1) Article 4 of Executive Order No. 226, as amended, entitled “The
Omnibus Investments Code of 1987;”


Sooromsena

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

(3) Section 3 of Executive Order No. 80, series of 1993, entitled
“Authorizing the Establishment of the Clark Development Corporation as the
Implementing Arm of the Bases Conversion and Development Authority for
the Clark Special Economic Zone, and Directing All Heads of Departments,
Bureaus, Offices, Agencies and Instrumentalities of Government to Support
the Program;”

(4) Section 6 of Executive Order No. 132, series of 2002, entitled
“Authorizing the Creation of the Poro Point Management Corporation as the
Implementing Arm of the Bases Conversion Development Authority over the
Poro Point Special Economic and Freeport Zone and Renaming the John Hay
Poro Point Development Corporation as the John Hay Management
Corporation;”

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

(6) __ Section 14 of Republic Act No. 9728, entitled “An Act Converting the
Bataan Economic Zone Located in the Municipality of Mariveles, Province of
Bataan, into the Freeport Area of Bataan (FAB), Creating for this Purpose
the Authority of the Freeport Area of Bataan (AFAB), Appropriating Funds
therefor and for other Purposes;”

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

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

(9) Section 7 of Republic Act No. 7922, entitled “An Act Establishing a
Special Economic Zone and Freeport 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) Section 6 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,” as amended by Executive Order No. 1031, series of 1985;

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

(B) The following laws are hereby amended to mandate all internal revenue tax
and duty obligations of the relevant entities be chargeable to the Tax Expenditure
Fund (TEF) pursuant to Section 325 of this Act:

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

(2) Section 8 of Republic Act No. 7903, entitled “An Act Creating Special
Economic Zone and Freeport in the City of Zamboanga for this Purpose
the Zamboanga City Special Economic Zone Authority, Appropriating
Funds Therefor, and for Other Purpose;”

(3) Section 12-a of Republic Act No. 10083, entitled “An Act Amending
Republic Act No. 9490, otherwise known as the Aurora Special Economic
Zone Act of 2007;”

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

(5) _ Section 10 of Presidential Decree No. 538, entitled “Creating and
Establishing the PHIVIDEC Industrial Authority and Making it a
Subsidiary Agency of the Philippine Veterans Investment Development
Corporation Defining its Powers, Functions and Responsibilities, and for
Other Purposes;”


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

(7) Section 8 of Republic Act No. 7278, entitled, An Act Amending
Commonwealth Act 111, as amended by PD 460, entitled An Act to Create
a Public Corporation known as the Boy Scouts of the Philippines and to
define its Powers and Purposes,” by strengthening the volunteer and
democratic character of the Boy 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 Electrification of the
Philippines on an Area Coverage Service Basis, the Organization,
Promotion and Development of Electric Cooperatives to Attain the Said
Objective, Prescribing Terms and Conditions for their Operations, the
Repeal Of Republic Act 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 “An
Act Increasing the Maximum Deposit Insurance Coverage, and in
connection therewith, to strengthen the regulatory and administrative
authority, and financial capability of the Philippine Deposit Insurance
Corporation (PDIC) amending for this purpose Republic Act Numbered
‘Three Thousand Five Hundred Ninety One, as amended otherwise known
as the PDIC Charter and for other purposes;”

(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 “Providing for
the Reorganization of Port Administrative and Operation Functions in the
Philippines, Revising Presidential Decree No. 505 dated July 11, 1974,
Creating the Philippine Port Authority, by substitution, and for other
Purposes;”

(16) Section 19 of Republic Act No. 6847, entitled “An Act Creating and
Establishing the Philippine Sports Commission, Defining its Powers,
Functions, and Responsibilities, Appropriating Fuids 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.”

Sec. 40. Repealing Clauses. -

In consideration of the franchise and rights granted ynder 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 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”;

(2) 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”;

(3) _ Section 9 of Republic Act No. 7961 entitled “An Act Granting
To Cruz Telephone Company, Inc., (Cruztelco), A Franchise To
Install, Operate And Maintain A Telecommunications System
Throughout The Philippines”;

(4) _ 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”;

(5) _ Section 8 of Republic Act No. 7963 entitled “An Act Granting
The Cebu Broadcasting Company A Franchise To Cohstruct, Install,
Operate And Maintain Radio And Television Broadcasting Stations
Within The Philippines And For Other Purposes”;

(6) _ 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”;

(7) _ Section 8 of Republic Act No. 7967 entitled “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”;

(8) Section 8 of Republic Act No. 7969 entitled “An Act Granting
The Central Catv, Inc. A Franchise To Establish, Maintain And
Operate For Commercial Purposes Cable/Community Antennae
Television Systems In The Philippines”;

(9) 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”;


(10) 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”;

(11) 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”;

(12) Section 8 of Republic Act No. 8060 entitled “An Act Granting
Palawan Broadcasting Corporation A Franchise To Install,
Construct, Operate And Maintain Commercial Radio And Television
Broadcasting Stations Throughout The Philippines”;

(13) 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”;

(14) 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”;

(15) Section 9 of 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”;

(16) 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’;

(17) Section 8 of Republic Act No. 8068 entitled “An Act Granting
A Franchise To Agusan Communications Foundation, Inc., To
Construct, Operate And Maintain Stations For Radio And Television
In The Province Of Agusan Del Sur And For Other Purposes”;


(18) 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”;

(19) 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”;

(20) 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”;

(21) 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’;

(22) Section 8 of Republic Act No. 8096 entitled “An Act Granting
The Allied Broadcasting Center, Incorporated A Franchise To
Construct, Operate And Maintain Stations For Radio In Cebu City
And Other Areas In The Philippines Where Frequencies Are Still
Available For Radio Broadcasting For Educational And Cultural, As
Well As For Commercial Purposes”;

(23) 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”;

(24) 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”;

(25) 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”;

(26) Section 7 of Republic Act No. 8102 entitled “An Act Granting
The Ultimate Entertainment, Inc., A Franchise To Construct, Install,
Maintain And Operate Radio Broadcasting Stations Within The
Philippines”;

(27) Section 8 of Republic Act No. 8116 entitled, “An Act Granting
The Vimcontu Broadcasting Corporation A Franchise To Construct,
Install, Operate And Maintain Radio And Television Broadcasting
Stations, Within The Philippines And For Other Purposes”;

(28) 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 Reli ious, Educational
And Commercial Purposes, Radio And Television Broadcasting
Stations Within The Philippines And For Other Purposes”;

(29) 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”;

(30) Section 8 of Republic Act No. 8121 entitled “An Act Granting
The M.S, Network Management, Inc. A Franchise To Construct,
Install, Operate And Maintain For Commercial Purposes, Radio
Broadcasting Stations In The Philippines And For Other Purposes”;

(31) Section 7 of Republic Act No. 8123 entitled “An Act Granting
The Royal Broadcasting Corporation. A Franchise To Construct,
Operate And Maintain For Commercial Purposes, Radio And
Television Broadcasting Stations In The Philippines And For Other
Purposes”;

(32) 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”;

(33) Section 8 of Republic Act No. 8132 entitled “An Act Granting
Jose M. Luison And Sons, Inc., A Franchise To Construct, Install,


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Operate And Maintain For Commercial Purposes Radio And
Television Broadcasting Stations In The Philippines”;

(34) Section 7 of Republic Act No. 8144 entitled “An Act Granting
The Azimuth Broadcasting Corporation Of Franchise To Construct,
Operate And Maintain For Commercial Purposes Radio And
Television Broadcasting Stations In The Philippines”;

(35) 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, Satellite And Cable Stations In The
Philippines”;

(36) Section 14 of Republic Act No. 8147 entitled “An Act Granting
The Southern Broadcasting Network Afranchise To Construct,
Maintain, Establish And Operatecommercial Radio/Television
Broadcasting Stations, In The Philippines”; .

(37) 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”;

(38) 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;”

(39) _ 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”;

(40) Section 8 of Republic Act No. 8169 entitled “An Act Granting
GV Broadcasting System, Inc., A Franchise To Construct, Install,
Maintain And Operate For Commercial Purposes Radio
Broadcasting Stations In The Island Of Luzon And For Other
Purposes”;

(41) 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/Electronic Services,
And Stations Throughout The Philippines For Public Domestic And
International Telecommunications, And For Other Purposes”;

(42) 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”;

(43) Section 13 of Presidential Decree 1869 - Restored Per Office
Of The President Memorandum Dated August 24, 1995
Consolidating And Amending Presidential Decree Nos. 1067-A,
1067-B, 1067-C, 1399 And 1632 Relative To The Franchise And
Powers Of The Philippine Amusement And Gaming Corporation
(PAGCOR);

(44) _ Section 9 of Republic Act No. 7953 entitled “An Act Amending
Ra 6632 Entitled, “An Act Granting The Philippine Racing Act, Inc.,
A Franchise To Operate And Maintain A Race Track For Horse
Racing In The Province Of Rizal, And Extending The Said Franchise
By 25 Years From The Expiration Of The Term Thereof;

(45) 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”;

(46) 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”;

(47) 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’;


(48) Section 3, paragraph 2 of Republic Act No. 4540 entitled, “An
Act Amending Certain Sections of Republic Act Numbered Four
Hundred and Two, As Amended”;

(49) 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”;

(50) 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”;

(51) Section 10 of Republic Act No. 10972 entitled “An Act
Renewing For Another Twenty-Five (25) Years The Franchise
Granted To Infocom Communications Network, Inc. (Presently
Known As Now Telecom Company, Inc.) Under Republic Act No.
7301, Entitled “An Act Granting Infocom Communications Network,
Inc. (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”;

(52) 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”;

(53) 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”;

(54) Section 8 of Republic Act No. 8032 entitled “An Act Granting
The Philippine Radio Corporation A Franchise To Construct, Install,


Establish, Operate And Maintain Commercial Radio Stations In The
Philippines”; And

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4 (55) Section 8 of Republic Act No. 8122 entitled “An Act Granting
5 The Swara Sug Media Corporation Of The Philippines A Franchise
6 To Construct, Install, Operate And Maintain For Commercial
7 Purposes Radio And Television Broadcasting Stations In The
8 Philippines And For Other Purposes”

9

10 (56) Section 10 of Republic Act No. 11089, entitled “An Act
"1 Granting the Streamtech Systems Technologies Inc. A Franchise to
12 Construct, Install, Establish, Operate and Maintain
13 Telecommunications Systems Throughout the Philippines

14

15 (57) Section 1, paragraph 17 of Republic Act No. 11151 entitled,
16 “An Act Renewing for Another Twenty-Five (25) Years the Franchise
7 Granted to Isla Communications Company, Inc., Presently Known
18 as Innove Communications, Inc., Amending for the Purpose
19 Republic Act No. 7372, entitled, “An Act Granting the Isla
20 Communications Co. a Franchise to Install, Operate and Maintain
21 Telecommunications Services within the Territory of the Republic of
22 the Philippines and International Points and for Other Purposes”
23

24

25 (B) The provisions of the following laws, including the tax incentives, that are
26 inconsistent with this Act are hereby amended or repealed:

27

28 (1) __ Section 5 of Republic Act No. (R.A.) 9379, or “An Act Defining
29 Handline Fishing, Providing Effective Regulations Therefor And For
30 Other Purposes”;

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

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

38

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

tT

42 (5) _ Section 18, 2nd and 3rd Paragraph Thereof, of R.A. 7884, or

43 “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), (I), 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 Il, Article Il, Sec. 35 (B), (C) and (D) of R.A. 8550, or
“The Philippine Fisheries Code Of 1998";

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

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

(10) Section 17 of Republic Act No. 7906 Entitled, “An Act
Providing For The Regulation Of The Organization And Operations
Of Thrift Banks, And For Other Purposes;”

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

(12) Book I, Title III, Article 39 (A), (B), (C), (D), (E), (G), (0), (3), (K),
(M) And (N); Title IV, Article 40, Book III Article 59, 60, 61, 63, 64,
65, 66; Book IV Article 69, Book VI, Articles 77, 78, And 81 of
Executive Order No. 226, Series of 1987, or “The Omnibus
Investments Code Of 1987";

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

(14) Articles 62, 63, 64, 65, 66, 67 And 69 of R.A. 8756, or “An Act
Providing for the Terms, Conditions And Licensing Requirements Of
Regional Or Area Headquarters, Regional Operating Headquarters,
Regional Warehouses Of Multinational Companies Amending For

The Purpose Certain Provisions Of The Omnibus Investment Code
Of 1987";

(15) Executive Order No. 22, s. of 2017 Amending E.O. 70, s. of
2012, E.O. 528, s. of 2006 and E.O. 313, s. of 2004, Entitled
“Reducing The Rates Of Duty On Capital Equipment, Spare Parts
And Accessories Imported By BOI-Registered New And Expanding
Enterprises”;


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

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

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

(19) Section 4 (B) (C}, In So Far As Tax Exemption and/or VAT Zero
Rating On Domestic Merchandise Is Concerned, of R.A. 7922, or “An
Act Establishing A Special Economic Zone And Free Port In The
Municipality Of Santa Ana And The Neighboring Islands In The
Municipality Of Aparri, Province Of Cagayan Providing Funds
Therefor, And For Other Purposes”;

(20) Section 4 of R.A. 8748, or “An Act Amending Republic Act

No. 7916, Otherwise Known As The Special Economic Zone Act Of
1995”; .

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

(22) Sections 12 (B) and (C) and Section 15, second, third, and last
Paragraph of R.A. 7227, or “An Act Accelerating The Conversion Of
Military Reservations Into Other Productive Uses, Creating The
Bases Conversion And Development Authority For This Purpose,
Providing Funds Therefor And For Other Purposes,” as amended by
R.A, 9400;

(23) Section 1 of E.0. 619, s. of 2017 Entitled “Creating And
Designating Special Economic Zones Pursuant To Republic Act No.
7916, As Amended By Republic Act No. 8784, In Relation To
Republic Act No. 7227, As Amended By Republic Act No. 9400,
Inside The Clark Freeport Zone”;

(24) Sections 5, 6, 7, 8 And 9 of R.A 9490, or “An Act Establishing
The Aurora Special Economic Zone In The Province Of Aurora,
Creating For The Purpose The Aurora Special Economic Zone
Authority, Appropriating Funds Therefor And For Other Purposes”;


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

(26) Section 4 (F), in so far as tax exemption and/or VAT zero
rating on domestic merchandise and capital equipment are
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”;

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

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

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

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

(40) Section 13 of R.A. 10817, or “An Act Instituting The Philippine
Halal Export Development And Promotion Program, Creating For
The Purpose The Philippine Halal Export Development And
Promotion Board, And For Other Purposes”;

(41) Section 14 of R.A. 8423, or “An Act Creating The Philippine
Institute Of Traditional And Alternative Health Care (PITAHC) To
Accelerate The Development Of Traditional And Alternative Health
Care In The Philippines, Providing For A Traditional And Alternative
Health Care Development Fund And For Other Purposes”;

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

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

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

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

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


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

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

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

(50) Chapter Il, Section 4 and Chapter VIII, Section 19 of RA.
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”, as amended by Republic Act
No. 11262;

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

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

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

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

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