Section 1. Persons liable to residence tax. — Every inhabitant of the
Philippines over eighteen years of age who has been regularly employed
on a wage or salary basis for at least thirty consecutive working days
during any calendar year at the rate of not less than fifty centavos a
day, or who is engaged in business or occupation, or who own real
property with an aggregate assessed value of one thousand pesos or
more, or who is required by law to file an income tax return shall pay
an annual residence tax of fifty centavos, and an annual additional tax
which in no case shall exceed five hundred pesos, in accordance with
the following schedule:
(a) For every five thousand pesos worth of real
property in the Philippines owned by such person during the preceding
year, the valuation to be based upon the assessment rolls of the
municipality where the property is situated, one peso;
(b) For every five thousand pesos of gross receipts
or earnings derived by such person from his business in the Philippines
during the preceding year, one peso; and
(c) For every one thousand pesos of salaries or gross
receipts or earnings derived by such person from the exercise of any
profession in the Philippines or from the pursuit of any occupation
therein during the preceding year, one peso.
For the purposes of the additional tax, dividends received by the
taxpayer from any corporation shall not be considered as part of his
gross receipts or earnings.
In the case of husband and wife, the additional tax herein imposed
shall be based upon the total property owned by them, or upon the total
gross receipts or earnings derived by them.
Section 2. Entities liable to residence tax. — Every
corporation, no matter how created or organized, whether domestic or
resident foreign, engaged in or doing business in the Philippines shall
pay an annual tax which, in no case, shall exceed one thousand pesos,
in accordance with the following schedule:
(a) For every five thousand pesos worth of real
property in the Philippines owned by it during the preceding year, the
valuation to be based upon the assessment rolls of the municipality
where the real property is situated, one peso; and
(b) For every five thousand pesos of gross receipts
or earnings derived by it from its business in the Philippines during
the preceding year, one peso: Provided, however, That dividends
received by a corporation from another corporation shall not, for the
purposes of the additional tax, be considered as part of the gross
receipts or earnings of said corporation.
The term "corporation" as used in this Act includes joint-stock
company, partnership, joint account (cuenta en participacion),
association, or insurance company, no matter how created or organized.
The term "resident foreign" when applied to a corporation means a
foreign corporation engaged in trade or business within the Philippines
or having an office or place of business therein.
Section 3. Residence certificates. — A resident
certificate shall be issued to every person or corporation upon payment
of the residence tax. A residence certificate shall also be issued to
any person or corporation not liable to the payment of the residence
tax upon payment of twenty centavos.
The residence certificate for persons shall contain the full name,
place and date of birth, citizenship, civil status, length of residence
in the Philippines, length of residence in the city or municipality
where the certificate is issued, occupation or calling, right hand
thumb mark, and signature of the person to whom such residence
certificate is issued. It shall also contain the signature of the
officer issuing it.
Section 4. Exemptions. — The following shall not be
taxed under this Act:
(a) The United States High Commissioner and members
of his staff;
(b) Commissioned officers of the United States Army
and Navy;
(c) Enlisted soldiers, sailors and marines of the
United States Army and Navy;
(d) Civilian employees of the military or naval
branches of the United States Government who have come to the
Philippines under orders from the United States Government;
(e) Diplomatic and consular representatives and
officers of foreign powers; and
(f) Transient visitors when their stay in the
Philippines does not exceed three months.
Section 5. Time for payment; penalties for
delinquency. — Liability for the residence taxes accrues on the first
day of January of each year as regards persons then resident of the
Philippines and liable to the taxes; and if a person so liable fails to
pay the taxes on or before the last day of April, he shall be
delinquent. As regards those who come to reside in the Philippines on
or before the last day of June, liability shall attach upon the day of
arrival or upon the day exemption ceases, and if arriving or becoming
liable on or before the tenth day of April, they shall likewise be
delinquent upon failure to pay the taxes on or before the last day of
April, but such persons, arriving or becoming liable after the tenth
day of April, shall have twenty days within which to pay the taxes
without becoming delinquent: Provided, That persons who come to reside
in the Philippines or arrive at the age of eighteen years on or after
the first day of July of any year or who ceases to belong to an exempt
class on or after the same date, shall not be subject to the taxes for
that year.
As regards corporations which may be established or organized on or
before the thirtieth day of June, liability for the residence tax for
that year shall attach, and if becoming liable on or before the tenth
day of April, they shall be delinquent upon failure to pay the taxes on
or before the last day of April, but those becoming liable after the
tenth day of April, shall have twenty days within which to pay the
taxes without becoming delinquent: Provided, That those who may be
established or organized on or after the first day of July of any year,
shall not be subject to the tax for such year.
If the taxes are not paid within the time prescribed above, there shall
be added to the unpaid amount a surcharge of five per centum every
month or fractional part thereof, but in no case shall the total
surcharge exceed twenty-five per centum.
Section 6. Presentation of residence certificate upon
certain occasions. — When a personable to the taxes prescribed in this
Act acknowledges any document before a notary public, takes the oath of
office upon election or appointment to any position in the government
service, receives any license, certificate or permit from any public
authority, pays any tax or fee, receives any money from any public
fund, or transacts other official business, or receives any salary or
wage from any person or corporation, it shall be the duty of such
person or officer of such corporation with whom such transaction is had
or business done to require the exhibition of the residence certificate
showing the payment of the residence taxes by such person: Provided,
however, That the presentation of the residence certificate shall not
be required in connection with the registration of a voter.
When, through its authorized officers, any corporation liable to the
taxes prescribed in this Act receives any license, certificate or
permit from any public authority, pays any fee, receives any money from
any public fund, or transacts other official business, it shall be the
duty of the public officials with whom such transaction is had or
business done to require the exhibition of the residence certificate
showing the payment of the residence taxes by such corporation.
The certificate mentioned in the next two preceding paragraphs shall be
the one issued for the current year except during the month of January
of each year and except also in the case of the payment of the
residence tax at any time during the year, in which cases the
exhibition of the certificate of the previous year shall suffice.
Section 7. Administrative remedies. — All
administrative, special, and general provisions of law including the
laws in relation to the assessment, remission, collection, and refund
of national internal revenue taxes not inconsistent with the provisions
of this Act, are extended and made applicable to all the provisions of
this law, and to the taxes herein imposed.
Section 8. Collection and disposition of proceeds. —
The taxes herein prescribed shall be collected by the provincial or
city treasurers and their deputies. All collections shall be remitted
by the treasurer concerned to the Collector of Internal Revenue and
shall be allotted in the following proportions by the said Collector
among the provinces, cities, municipalities, and municipal districts on
the basis of population as shown by the latest official census:
One-fourth to the general funds of the provinces. A sub-province shall
receive its proportionate share of the proceeds allotted to the
province;
One-fourth to the general funds of the cities, municipalities, and
municipal districts; and
Two-fourths to the school fund of the cities, municipalities, and
municipal districts.
Section 9. Authority of the Secretary of Finance to
promulgate rules and regulations. — The Secretary of Finance shall
promulgate all needful rules and regulations for the effective
enforcement of the provisions of this Act.
Section 10. Unlawful use of residence certificate. — Any person who
uses, attempts to use, or is in possession of, with intent to defraud
the revenues, deceive the courts, or mislead any revenue officer or
other person, any residence certificate issued to any other person or
corporation shall be fined in a sum not exceeding two hundred pesos or
imprisoned for a term not exceeding six months.
Section 11. Falsification or counterfeiting of residence certificate. —
Any person who makes, sells, or uses any false or counterfeit residence
certificate or any die for printing or making such certificate which is
in imitation of or purports to be a lawful residence certificate, or
who alters the written or printed figures or letters contained therein,
or who has in his possession any such false, counterfeit, or altered
certificate for the purpose of using the same in the payment of revenue
or in securing any exemption or privilege conferred by law, or who
procures the commission of any such offense by another, shall for each
offense be fined in a sum not less than two hundred pesos nor more than
five thousand pesos and imprisoned for a term not less than two months
nor more than five years, or both.
Section 12. Violation of this law or regulation.
— Any person who violates any provision of this law, or any regulation
promulgated in accordance therewith, for which delinquency no specific
penalty is provided by law, shall be punished by a fine of not more
than three hundred pesos, or by imprisonment for not more than six
months, or both: Provided, That delinquency in the payment of this
residence tax shall be dealt with in accordance with sections five and
seven hereof.
Section 13. This Act shall take effect on
January first, nineteen hundred and forty.
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