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PRESIDENTIAL DECREE NO. 1193
PRESIDENTIAL DECREE NO. 1193 -
AUTHORIZING THE TOURIST DUTY-FREE SHOPS, INC. TO ESTABLISH AND OPERATE
DUTY AND TAX FREE SHOPS AND REQUIRING IT TO PAY FRANCHISE TAX IN LIEU
OF ALL OTHER TAXES
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WHEREAS,
duty-free stores serves as an effective resource base of accelerated
tourism development in our country; chanroblesvirtualawlibrary
WHEREAS, duty-free stores will earn for our country substantial amounts
of foreign exchange which, in turn, will help accelerate our country's
socio-economic development;chanroblesvirtualawlibrary
WHEREAS, the nature of the traditional items that are scheduled in
duty-free shops will not, in any way, offer competition to locally
manufactured products but to the contrary, duty-free shops serve as a
very effective showcase for such locally manufactured products;chanroblesvirtualawlibrary
WHEREAS, Tourist Duty-Free Shops, Inc. has proven itself to be
possessed of such financial, technical and managerial capabilities that
make it a very efficient operator and manager of duty-free stores;chanroblesvirtualawlibrary
WHEREAS, in order to stabilize and standardize the services of duty and
tax free stores in qualifiedr and sea passenger terminals in the
country, and other authorized outlets and to assure continuous
efficient and satisfactory service, as well as the effective control of
its operations, an exclusive authority in favor of the Tourist
Duty-Free Shops, Inc. is deemed expedient and beneficial for the
country; and chanroblesvirtualawlibrary
WHEREAS, existing laws do not specifically and expressly provide for
the establishment of duty-free stores in our country.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
order and decree:cralaw:red
Section 1. The Tourist Duty-Free Shops, Inc. is
authorized to establish, operate and maintain duty and tax free stores
in all internationalrports and seaports, as well as at selected hotels,
tourists resorts, and commercial or trading centers throughout the
country.
Section 2. A Customs Bonded Warehouse shall first be
established and operated by Tourist Duty-Free Shops, Inc. in each port
of entry, to be used exclusively for the storage and safekeeping of
imported duty and tax free merchandise; Provided, That each
sales/display area or counter established by Tourist Duty-Free Shops,
Inc. for sales and promotional purposes shall be considered as an
extension of the Customs Bonded Warehouse; Provided further, That the
operation of such warehouse, sales and display areas/counters shall be
under the control and supervision of the Bureau of Customs.
Section 3. Importations of articles/merchandise to be
sold by Tourist Duty-Free Shops, Inc. shall be made only upon prior
approval by the Central Bank of the Philippines.
Section 4. Imported articles to be stored and sold by
Tourist Duty-Free Shops, Inc. shall be entered under warehousing entry
supported by pertinent papers and documents and release certificate
from the Central Bank of the Philippines Provided, That such
merchandise shall remain under customs control and supervision until
sold, exported and/or disposed of as herein provided.
Section 5. The provision of Section 1908 of the
Tariff and Customs Code of the Philippines, as amended, shall not apply
to the importations of Tourist Duty Free Shops, Inc.; Provided, That
imported goods/merchandise which have remained unsold for a period of
three years shall be exported, sold at public auction, or destroyed in
accordance with existing law, rules and regulations.
Section 6. Imported articles/merchandise may be sold
duty/tax free to:cralaw:red
a) Foreign embassies, legations, consular offices,
and other foreign government and/or international agencies,
institutions, associations, or organizations, entitled to exemptions
pursuant to agreements or special laws, without the necessity of
securing prior approval from the departments of Foreign Affairs and
Finance;chanroblesvirtualawlibrary
b) Passengers of international flights or
sea-voyages, arriving from or departing for foreign currency in
accordance with rules, regulations and procedures promulgated by the
Bureau of Customs and/or Central Bank of the Philippines;chanroblesvirtualawlibrary
c) Foreign delegates, participants and/or observers
to government accredited international Conference/Conventions during
the conference or convention at the Philippine International Convention
Center; and
d) Airlines and shipping companies for the normal
supply requirement of ther or sea stores for flights or voyages outside
the Philippines; provided, That all such tax duty/tax free merchandise
shall remain under customs control and supervision while in Philippine
territory.
Section 7. The Tourist Duty-Free Shops, Inc. may sell
and deliver imported articles/merchandise to persons authorized under
Section 6 at stores located outsiderports/seaports.
Section 8. The Tourist Duty-Free Shops, Inc. is also
hereby authorized to import duty and tax-free equipments, fixtures and
other materials necessary for its operations.
Section 9. Hotels and/or restaurants duly licensed by
the Central Bank of the Philippines accept/deal in foreign exchange may
likewise purchase their normal food and beverages requirements from
Tourist Duty-Free Shops, Inc. subject prior Central Bank approval upon
payment of full duties, taxes and other charges due thereon.
Section 10. The Tourist Duty-Free Shops, Inc. shall
in lieu of the payment of all business and income taxes, whether
imposed by the national or local governments, pay annually seven per
centum (7) of its annual net sales, to be apportioned as follows: five
per centum (5%) thereof to the Nutrition Center of the Philippines
and/or other similar projects as may be directed by the President, and
the balance to the national government.
Section 11. The authority herein granted in favor of
the Tourist Duty-Free Shops, Inc. shall be exclusive for a period of 25
years from date hereof.
Section 12. This Decree shall take effect immediately.
DONE in the City of Manila,
this 6th day of September, in the year of Our Lord, nineteen hundred
and seventy-seven.
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