WHEREAS,
the taxpaying public has been persistently and incessantly clamoring
for upward adjustment of the personal and additional exemptions;chanroblesvirtualawlibrary
WHEREAS, inflation has increased the cost of living and has effectively
pushed otherwise nontaxable, low-income individuals beyond the
threshold of exemption, thereby justifying the demand for increase in
personal and additional exemptions;chanroblesvirtualawlibrary
WHEREAS, it is also necessary to re-structure and improve the
progressivity of the graduated income tax rates in order to make the
tax system more equitable not only as a source of revenue but also as a
social instrument for redistribution of wealth and income;chanroblesvirtualawlibrary
WHEREAS, it is necessary to amend further certain provisions of the
National Internal Revenue Code in order to strengthen the enforcement
powers of the Bureau of Internal Revenue.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of
the Philippines, by virtue of the powers vested in me by the
Constitution do hereby decree and order: chanroblesvirtualawlibrary
Section 1. Section 7 of the National Internal Revenue
Code as amended by Presidential Decree No. 1705 is hereby further
amended to read as follows:cralaw:red
"Power of the Commissioner of Internal Revenue to Obtain Information,
Examine, Summon and Take Testimony. —chanroblesvirtualawlibrary
"(a) From government officers or agencies. — When it
comes to the knowledge of the Commissioner of Internal Revenue that
certain offices or officers of the National and Local governments such
as the Office of the Register of Deeds, the Securities and Exchange
Commission, the Philippine Patent Office, the Government Service
Insurance System, the Social Security System, the Philippine Medical
Care Commission, mayors and treasurers and others, possess valuable
information for discovery of potential taxpayers, the Commissioner or
his authorized representative shall obtain that information upon proper
request from the offices or officers concerned. It shall be the duty of
those offices or officers to furnish the desired information within
thirty days from receipt of the request of the Commissioner of Internal
Revenue or his authorized representative.
"(b) From other persons. — For the purpose of
ascertaining the correctness of any return where none has been made,
determining the liability of any person for any internal revenue tax or
collecting any such liability, the Commissioner or his authorized
representative is empowered.
"(1) To examine any book, paper, or record, or other
data which may be relevant or material to such inquiry; chanroblesvirtualawlibrary
"(2) To summon any person having possession, custody,
or care of books of accounts containing entries, or of any information
relating to the tax liability of any person to appear before the
Commissioner or his authorized representative at a time and place
specified in the summons and to produce such books, papers, records, or
other data, and to give testimony; and
"(3) To take such testimony of the person concerned,
under oath, as may be relevant or material to such inquiry."
"Any person who neglects or refuses to obey such summons, or to produce
books, papers, records or other data, or give testimony, as required,
shall be liable to the penalties prescribed by Section 337 hereof."
Section 2. Section 16 of the National Internal
Revenue Code as amended by Presidential Decree No. 1705 is hereby
further amended to read as follows:cralaw:red
"Sec. 16. Power of the Commissioner of Internal
Revenue to make assessments. —chanroblesvirtualawlibrary
"(a) Failure to submit required reports, statements,
etc. — When a report required by law as a basis for the assessment of
any national internal revenue tax shall not be forthcoming within the
time fixed by law or regulation, or when there is reason to believe
that any such report, is false, incomplete, or erroneous, the
Commissioner of Internal Revenue shall assess the proper tax on the
best evidence obtainable.
"(b) Authority to conduct surveillance. — The
Commissioner of Internal Revenue may place the business operations of
any person, natural or juridical, under observation or surveillance for
a period of two months if there are reasons to believe that such person
is not declaring his correct income and receipts for internal revenue
tax purposes. The findings for this period may be used as a basis for
assessing the taxes for the other months or quarters of the same or
different taxable years and such assessment shall be deemed prima facie
correct. chanroblesvirtualawlibrary
"(c) Authority to terminate taxable period. — When it
shall come to the knowledge of the Commissioner of Internal Revenue
that a taxpayer is retiring from the business subject to tax or intends
to leave the Philippines, or remove his property therefrom, or hide or
conceal his property, or perform any act tending the proceedings for
the collection of the tax for the past or current quarter or year, or
render the same totally or partly ineffective unless such proceedings
are begun immediately, the Commissioner of Internal Revenue shall
declare the tax period of such taxpayer terminated at any time and
shall send the taxpayer a notice of such decision, together with a
request for the immediate payment of the tax for the period so declared
terminated and the tax for the preceding year or quarter, or such
portion thereof as may be unpaid, and said taxes shall be due and
payable immediately and shall be subject to all the penalties hereafter
prescribed, unless paid within the time fixed in the demand made by the
Commissioner of Internal Revenue.
Section 3. Paragraphs (a), (b) and (c) of Section 23
of the National Internal Revenue Code are hereby amended to read as
follows:cralaw:red
"(a) Personal exemptions of single individuals. — The
sum of Three thousand pesos, if the person making the return is a
single person or a married person judicially decreed as legally
separated from his or her spouse.
"(b) Personal exemption of married persons or heads
of family. — The sum of Six thousand pesos, if the person making the
return is a married man or a married woman, or Four thousand five
hundred pesos if the person making the return is the head of a family:
Provided, That only one exemption of Six thousand pesos shall be made
from the aggregate income of both husband and wife when not legally
separated. For the purpose of this section, the term "head of the
family" means an unmarried man or woman with one or both parents, or
with one or more brothers or sisters, or with one or more legitimate,
recognized natural, or adopted children living with and dependent upon
him or her for their chief support where such brothers, sisters, or
children are not more than twenty-one years of age, unmarried, and not
gainfully employed, or where such children are incapable of
self-support because of mental or physical defect.
"(c) Additional exemption for dependents. — The sum
of Two thousand pesos for each legitimate, recognized natural or
adopted child wholly dependent upon and living with the taxpayer if
such dependents are not more than twenty-one years of age, unmarried
and not gainfully employed or incapable of self-support because of
mental or physical defect. The additional exemption under this
subsection shall be allowed only if the person making the return is
either married or head of the family: Provided, however, That the total
number of dependents for which additional exemptions may be claimed
shall not exceed four dependents: Provided, further, That an additional
exemption of One thousand pesos shall be allowed for each child who
otherwise qualified as dependent prior to January 1, 1980."
Section 4. Section 23 is further amended by
inserting a new paragraph between paragraphs (d) and (e) to be known as
paragraph (e) and making the existing paragraph (e) as paragraph (f).
The new paragraph shall read as follows:cralaw:red
"Sec. 23. (e). Allowances for Adjustment. — Upon the
recommendation of the Minister of Finance, the President may, not often
than once every three years, adjust the personal and additional
exemptions taking into account, among others, the movements in consumer
price indices, levels of minimum wages, and bare subsistence levels."
Section 5. Paragraph (a) of Section 24 (b) (2) of
the National Internal Revenue Code, as amended by Presidential Decree
No. 1705 is hereby renumbered as paragraph (i) and paragraph (b) of the
same Sub-section is hereby renumbered as paragraph (ii) and amended to
read as follows:cralaw:red
"(ii) Tax on branch profits remittances. — Any profit
remitted abroad by a branch to its head office shall be subject to a
tax of fifteen per cent (15%) (except those registered with the Export
Processing Zone Authority): Provided, That any profit remitted by a
branch to its head office authorized to engage in petroleum operations
in the Philippines shall be subject to tax at seven and one-half per
cent (7.5%): And Provided, Further, That interests, dividends, rents,
royalties, including remunerations for technical services, salaries,
wages, premiums, annuities, emoluments or other fixed or determinable
annual, periodical or casual gains, profits, income, and capital gains
received by a foreign corporation during each taxable year from all
sources within the Philippines shall not be considered as branch
profits unless the same are effectively connected with the conduct of
its trade or business in the Philippines."
Section 6. Paragraph (e) of Section 24 of the
National Internal Revenue Code is hereby amended to read as follows:cralaw:red
"(e) Corporate Development Tax. — In addition to the
tax imposed in subsection (a) of this Section, an additional tax in an
amount equivalent to 10% of the same taxable net income shall be paid
by a domestic or a resident foreign corporation which qualifies as a
closely-held corporation as defined herein: The term "closely-held
corporation" means any corporation, (a) at least 50% in value of the
outstanding stock or (b) at least 50% of the total combined voting
power of all classes of stock entitled to vote, at any time during the
taxable year, is owned directly or indirectly by or for not more than
five persons, natural or juridical. For the purpose of determining
whether an individual indirectly owns shares of stock in a corporation,
the attribution rules prescribed by paragraphs (b) and (c) of Section
66 of this Code shall be applied.
The additional corporate income tax imposed in this Subsection shall be
collected and paid at the same time and in the same manner as the tax
imposed in subsection (a) of this Section.
"The foregoing provisions shall not apply to banks, non-bank financial
intermediaries or corporations organized primarily, and authorized by
the Central Bank of the Philippines to hold shares of stock of banks
unless — (A) More than twenty (20%) per cent of all classes of stock
entitled to vote of such corporation is held by (1) persons related to
each other within the third degree of consanguinity or affinity, or (2)
a corporation, the majority of the shares are owned by such related
persons or (3) two or more corporations the majority of the shares are
owned by the same person or so related persons."
Section 7. Section 24(f) of the same Code is hereby
amended to read as follows:cralaw:red
"(f) Tax on transactions by offshore banking units
and under the expanded foreign currency deposits system. —chanroblesvirtualawlibrary
"(1) Offshore Banking Units. — The provisions of any
law to the contrary notwithstanding, income derived by offshore banking
units authorized by the Central Bank of the Philippines from foreign
currency transactions with nonresidents, other offshore banking units,
local commercial banks, including branches of foreign banks that may be
authorized by the Central Bank 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 Minister of Finance, upon
recommendation of the Monetary Board, to be subject to the usual 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 Central Bank of
the Philippines to transact business with offshore banking units, shall
be subject only to a 10% final withholding tax."
"Any income of nonresidents from transactions with said offshore
banking units shall be exempt from income tax."
"(2) Expanded Foreign Currency Deposit System. —
Income derived by a depository bank under the expanded foreign currency
deposit system from foreign currency transaction with nonresidents,
offshore banking units in the Philippines, local commercial banks
including branches of foreign banks that may be authorized by the
Central Bank to transact business with foreign currency deposit system
units and other depository banks under the expanded foreign currency
deposit system shall be exempt from all taxes, except net income from
such transactions as may be specified by the Minister of Finance, upon
recommendation of the Monetary Board to be subject to the usual income
tax payable by banks: Provided, however, That interest income from
foreign currency loans granted by such depository banks under said
expanded system to residents (other than offshore banking units in the
Philippines or other depository banks under the expanded system) shall
be subject to a 10% final withholding tax." chanroblesvirtualawlibrary
"Any income of nonresidents from transactions with depository banks
under the expanded system shall be exempt from income tax."
Section 8. Subparagraphs (f) and (g) of Section
30(c) (1), of the National Internal Revenue Code which were added as
new subparagraphs thereto by Presidential Decree No. 1705 are hereby
designated as subparagraphs (F) and (G), respectively.
Section 9. Paragraph (k) of Section 30 of the
National Internal Revenue Code is hereby amended to read as follows:cralaw:red
"(k) Optional standard deduction. — In lieu of the
deductions allowed under this section, an individual other than a
nonresident alien, may elect a standard deduction in an amount not
exceeding 10% per centum of his gross income. 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 subsection. The Minister of Finance
shall prescribe the manner of the election. Such election when made in
the return shall be irrevocable for the taxable year for which the
return is made." chanroblesvirtualawlibrary
Section 10. A new paragraph is hereby added to
Section 30 of the National Internal Revenue Code to read as follows:cralaw:red
"Notwithstanding the provisions of the preceding paragraphs, the
Minister of Finance upon recommendation of the Commissioner, may for
tax audit purposes prescribe by regulations, limitations or ceilings
for any of the itemized deductions under this Section."
Section 11. Paragraph (b) of Section 35 of the
National Internal Revenue Code is hereby amended to read as follows:cralaw:red
"(b) In the case of property acquired on or after
March first, nineteen hundred and thirteen, the cost thereof if such
property was acquired by purchase or the fair market price or value as
of the date of the acquisition if the same was acquired by inheritance.
If the property was acquired by gift the basis shall be the same as it
would be in the hands of the donor, or the last preceding owner by whom
it was not acquired by gift, except that if such basis is greater than
the fair market value of the property at the time of the gift then for
the purpose of determining loss the basis shall be such fair market
value."
Section 12. Section 35(c) of the National Internal
Revenue Code as amended by Presidential Decree No. 1705 is hereby
amended to read as follows:cralaw:red
"(c) Exchange of property. —chanroblesvirtualawlibrary
"(1) General rule. — Except as herein provided, upon
the sale or exchange of property, the entire amount of the gain or
loss, as the case may be, shall be recognized.
"(2) Exception. — No gain or loss shall be recognized
if in pursuance of a plan of merger or consolidation (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 (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 of consolidation, or (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 another corporation, a party to the merger or
consolidation. No gain or loss shall also be recognized if property is
transferred to a corporation by a person in exchange for stock in such
a corporation of which as a result of such exchange said person, alone
or together with others, not exceeding four persons, gains control of
said corporation: Provided, That stocks issued for services shall not
be considered as issued in return for property. chanroblesvirtualawlibrary
"(3) Exchange not solely in kind. —chanroblesvirtualawlibrary
"(a) If, in connection with an exchange described in
the above exceptions, an individual, a shareholder, security holder or
corporation receives not only stock or securities permitted to be
received without recognition of gain or loss, but also money and/or
property, the gain, if any, but not the loss, shall be recognized but
in an amount not in excess of the sum of the money and the fair market
value of such other property received: Provided, That as to the
shareholder, if the money and or other property received has the effect
of a distribution of a taxable dividend, there shall be taxed as
dividend to the shareholder an amount of the gain recognized not in
excess of his proportionate share of the undistributed earnings and
profits of the corporation; the remainder, if any, of the gain
recognized shall be treated as a capital gain.
"(b) If, in connection with the exchange described in
the above exceptions, the transferor corporation received not only
stock permitted to be received without the recognition of gain or loss
but also money and/or other property, then (1) if the corporation
receiving such money and/or other property distributed it in pursuance
of the plan of merger or consolidation, no gain to the corporation
shall be recognized from the exchange, but (2) if the corporation
receiving such other property and/or money does not distribute it in
pursuance of the plan of merger or consolidation, the gain if any, but
not the loss to the corporation shall be recognized but in an amount
not in excess of the sum of such money and the fair market value of
such other property so received, which is not distributed.
"(4) Assumption of Liability. — (a) If the taxpayer,
in connection with the exchanges described in the foregoing exceptions,
receives stock or securities which would be permitted to be received
without the recognition of the gain if it were the sole consideration,
and as a part of the consideration, another party to the exchange
assumes a liability of the taxpayer, or acquires from the taxpayer
property subject to a liability, then such assumption or acquisition
shall not be treated as money and or other property, and shall not
prevent the exchange from being within the exceptions. chanroblesvirtualawlibrary
"(b) If the amount of the liabilities assumed, plus
the amount of the liabilities to which the property is subject, exceed
the total of the adjusted basis of the property transferred pursuant to
such exchange, then such excess shall be considered as a gain from the
sale or exchange of a capital asset or of property which is not a
capital asset, as the case may be.
"(5) Basis. — (a) The basis of the stock or
securities received by the transferor upon the exchange specified in
the above exception shall be the same as the basis of the property,
stock or securities exchanged, decreased by (1) the money received, and
(2) the fair market value of the other property received, and increased
by (a) the amount treated as dividend of the shareholder and (b) the
amount of any gain that was recognized on the exchange: Provided, That
the property received as "boot" shall have as basis its fair market
value: Provided, further, That if as part of the consideration to the
transferor, the transferee of property assumes a liability of the
transferor or acquires from the latter property subject to a liability,
such assumption or acquisition (in the amount of the liability) shall,
for purposes of this paragraph be treated as money received by the
transferor on the exchange: Provided, finally, That if the transferor
received several kinds of stock or securities, the Commissioner of
Internal Revenue is hereby authorized to allocate the basis among the
several classes of stocks or securities.
"(b) The basis of the property transferred in the
hands of the transferee shall be the same as it would be in the hands
of the transferor, increased by the amount of the gain recognized to
the transferor on the transfer.
"(6) Definitions. — (a) The term "securities" means
bonds and debentures but not "notes" of whatever class of duration.
"(b) The term "merger" or "consolidation", when used
in this section, shall be understood to mean: (1) the ordinary merger
or consolidation or (2) the acquisition by one corporation of all or
substantially all the properties of another corporation solely for
stock: Provided, That for a transaction to be regarded as a merger or
consolidation within the purview of this section, it must be undertaken
for a bona fide business purpose and not solely for the purpose of
escaping the burden of taxation: Provided, further, That in determining
whether a bona fide business purpose exists each and every step of the
transaction shall be considered and the whole transaction or series of
transactions shall be treated as a single unit: Provided finally, That
in determining whether the property transferred constitutes a
substantial portion of the property of the transferor, the term
"property" shall be taken to include the cash assets of the transferor.
"(c) The term "control" when used in this Section
shall mean ownership of stocks in a corporation possessing at least
fifty-one per cent of the total voting power of all classes of stocks
entitled to vote.
"(d) The Minister of Finance upon recommendation of
the Commissioner of Internal Revenue is hereby authorized to issue
rules and regulations for the purpose of determining the proper amount
of transferred assets which meet the standard of the phrase
"substantially all" and for the proper implementation of this section."
Section 13. Section 45(c) of the National Internal
Revenue Code as amended by Batas Pambansa Blg. 37 and Presidential
Decree No. 1705, is hereby further amended to read as follows:cralaw:red
"(c) When to file. — The return of:cralaw:red
"(1) Residents of the Philippines, whether citizens
or aliens, whose income had been derived solely from salaries, wages,
interests, dividends, allowances, commissions, bonuses, fees, pensions,
or any combination thereof shall be filed on or before the eighteenth
day of March of each year, covering income for the preceding
taxable year.
"(2) All other individuals not mentioned above,
including non-resident citizens shall be filed on or before the
fifteenth day of April of each year covering income of the preceding
taxable year.
"Individuals subject to the final schedular tax on net capital gains
from the sale or other disposition of real property under Section 34(h)
of this Code, shall file or cause to be filed a separate return
prescribed therefor by the Commissioner within thirty (30) days
following each sale or other disposition of capital assets."
Section 14. Paragraph (b) of Section 54 of the
National Internal Revenue Code as amended by Presidential Decree No.
1705 is hereby further amended to read as follows:cralaw:red
"(b) Penalties for failure to render returns; for
rendering false or fraudulent returns; and for non-payment of taxes
withheld. — The surcharges and the penalties imposed in Sections
Seventy-two and Seventy-three, respectively, of this Title shall apply
to failure to file returns, to filing false or fraudulent returns or
failure to pay the tax required under this Section.
In case the taxes deducted and withheld are not paid within the time
prescribed, there shall be added to the amount of the unpaid tax a
surcharge of twenty-five per centum plus interest at the rate of twenty
per centum per annum from the date the same became due until paid.
If the withholding agent is the government or any of its agencies
political subdivisions or instrumentalities, or a government-owned or
controlled corporation, the employee thereof responsible for the
withholding and remittance of the tax shall be personally liable for
the surcharge and interest imposed herein." chanroblesvirtualawlibrary
Section 15. Paragraph (b) of Section 72 of the
National Internal Revenue Code as amended by Batas Pambansa Blg. 37, is
hereby amended to read as follows:cralaw:red
"(b) In case the return is filed with a person other
than that mentioned in Sections 45 (b) and 87 (a) of this Code; and"
Section 16. Section 96 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 96. Surcharges for failure to render returns;
filing false or fraudulent returns; delinquency in payment of taxes;
and failure to deduct and withhold. —chanroblesvirtualawlibrary
"The surcharges and penalties prescribed in Sections 72 and 73 of this
Title in cases of failure to render returns and for filing false or
fraudulent returns shall apply to returns required under Sections 93
and 94.
"In case the taxes deducted and withheld by the employer are not paid
within the time prescribed, there shall be added a surcharge of
twenty-five per centum and interest at the rate of twenty per centum
per annum from the time the same became due until paid.
"If the employer, in violation of the provisions of Section 91 hereof
fails to deduct and withhold the tax required, he shall be liable to
pay a surcharge of twenty five per centum. However, if the failure is
due to willful neglect or with intent to defraud the government, a
surcharge of fifty per centum shall be imposed. Interest at the rate of
twenty per centum per annum shall likewise be imposed from the time the
tax is required to be withheld until the date of assessment.
"If the withholding agent is the government or any of its agencies,
political subdivisions, or instrumentalities, or is a government-owned
or controlled corporation, the employee or officer thereof responsible
for the withholding and/or remittance of the tax shall be personally
liable for the surcharge and interest imposed herein." chanroblesvirtualawlibrary
Section 17. Paragraph (a) of Section 97 of the
National Internal Revenue Code, is hereby amended to read as
follows: chanroblesvirtualawlibrary
"(a) Penalties for failure to file; for filing false
or fraudulent returns or statements; failure to deduct and withhold;
and failure to remit. — Any person who fails to file a return or
statement as required in this Chapter, or who renders a false or
fraudulent return, or who fails to deduct and withhold or fails to
remit to the Commissioner of Internal Revenue the amount withheld by
such agent, shall upon conviction, for each act or omission, be fined
not less than One thousand pesos nor more than Two thousand pesos and
imprisoned for not more than One year." chanroblesvirtualawlibrary
Section 18. Paragraphs (b) and (d) of Section 105 of
the National Internal Revenue Code as amended by Presidential Decree
No. 1705, are hereby further amended to read as follows:cralaw:red
"(b) Time for filing. — For the purpose of
determining the estate tax provided for in Section 99 of this Code, the
estate tax return required under the preceding subsection (a) shall be
filed within nine months after the decedent's death; but if judicial
testamentary or intestate proceedings shall be instituted for the
settlement of the decedent's estate prior to the expiration of said
period, the return shall be filed within twenty-one months after the
decedent's death.
"A certified copy of the schedule of partition and the order of the
court approving the same shall be furnished the Commissioner of
Internal Revenue by the Clerk of Court within thirty days after the
promulgation of such order.
"(d) Place of filing. — Except in cases where the
Commissioner of Internal Revenue permits, the return required under
subsection (a) shall be filed with the Revenue District Officer,
Collection Agent or duly authorized treasurer of the city or
municipality in which the decedent was domiciled at the time of his
death or if there be no legal residence in the Philippines, then with
the Office of the Commissioner of Internal Revenue."
Section 19. Paragraph (a) of Section 107 of the
National Internal Revenue Code is hereby amended to read as
follows: chanroblesvirtualawlibrary
"(a) Time of payment. — The estate tax imposed by
Section 99 shall be paid at the time the return is filed by the
executor, administrator or the heirs."
Section 20. Section 111 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 111. Interest on extended payment. —chanroblesvirtualawlibrary
"(a) Tax shown on the return. — If the time for
payment of the estate tax or any part thereof is extended as provided
in subsection (b) of Section 107, there shall be collected, as part of
such amount, interest thereon at the rate of twenty per centum per
annum from the day following the due date of the tax to the expiration
of the period of the extension.
"(b) Deficiency. — In case an extension for the
payment of a deficiency is granted for the payment there shall be
collected, as a part of the tax, interest on the part of the
deficiency, the time for the payment of which is so extended, at the
rate of twenty per centum per annum for the period of the extension."
Section 21. Section 112 of the National Internal
Revenue Code is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 112. Interest on deficiency. — Interest upon
the amount determined as a deficiency, assessed at the same time as the
deficiency, shall be paid upon notice and demand from the Commissioner
of Internal Revenue, and shall be collected as a part of the tax, at
the rate of twenty per centum per annum, from the due date of the tax
to the date the deficiency is assessed: Provided, That the maximum
amount that may be collected as interest on deficiency shall in no case
exceed the amount corresponding to a period of three years, the present
provisions regarding prescription to the contrary notwithstanding."
Section 22. Paragraphs (a) and (b) of Section 113 of
the National Internal Revenue Code and paragraph (c) of the same
section amended by Presidential Decree No. 1705 are hereby further
amended to read as follows:cralaw:red
"Sec. 113. Additions to the tax in case of
nonpayment. —chanroblesvirtualawlibrary
"(a) Tax shown on the return. —chanroblesvirtualawlibrary
"(1) Payment not extended. — Where the amount of the
tax imposed by this Chapter, or any part of such amount is not paid on
the due date of the tax, there shall be collected as part of the tax,
interest upon such unpaid amount at the rate of twenty per centum per
annum, from the due date until it is paid: Provided, That the maximum
amount that may be collected as interest on delinquency shall in no
case exceed the amount corresponding to a period of three years, the
present provisions regarding prescription to the contrary
notwithstanding.
"(2) Payment extended. — Where an extension of time
for payment of the amount of the tax has been granted, and the amount,
the time for the payment of which has been extended, and the interest
thereon determined under subsection (a) of Section 111 is not paid in
full prior to the expiration of the period of the extension, interest
at the rate of twenty per centum per annum, shall be collected on such
unpaid amount from the date the same was originally due until it is
paid.
"(b) Deficiency. —chanroblesvirtualawlibrary
"(1) Payment not extended. — Where a deficiency, or
any interest assessed in connection therewith under Section 112, or any
addition to the taxes provided for in Section 114 is not paid in full
within thirty days from the date of the notice and demand from the
Commissioner, there shall be collected as part of the tax, interest
upon the unpaid amount at the rate of twenty per centum per annum from
the date of such notice and demand until it is paid: Provided, That the
maximum amount that may be collected as interest on deficiency shall in
no case exceed the amount corresponding to a period of three years, the
present provisions regarding prescription to the contrary
notwithstanding.
"(2) Payment extended. — If the part of the
deficiency the time for payment of which is extended is not paid in
accordance with the terms of the extension, there shall be collected,
as part of the tax, interest on such unpaid amount at the rate of
twenty per centum per annum from the date the same was originally due
until it is paid.
"(c) Surcharge. — If any amount of tax shown on the
return is not paid in full on or before the date prescribed for its
payment under paragraph (a) of this section, or any amount of
deficiency, or any interest assessed in connection therewith is not
paid in full within the period prescribed in the assessment notice and
demand required under paragraph (b) of this section, there shall be
collected in addition to the interest prescribed herein and in Sections
111 and 112 as part of the tax surcharge of ten per centum of the
unpaid amount."
Section 23. Section 121 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 121. Rates of tax payable by donor. —chanroblesvirtualawlibrary
"(a) In general. — The tax for each calendar year
shall be computed on the basis of the total net gifts made during the
calendar year, in accordance with the following schedule:cralaw:red
If the net gift is The tax shall be
Over But not Over
Exempt Plus of Excess Over
P1,000 P1,000
1.5% P1,000
50,000
50,000 735 2.5%
50,000
75,000
75,000 1,360 3%
75,000
100,000 100,000
2,110 6% 100,000
150,000 150,000
5,110 9% 150,000
200,000 200,000
9,610 12% 200,000
300,000 300,000
21,610 15% 300,000
400,000 400,000
36,610 18% 400,000
500,000 500,000
54,610 21% 500,000
625,000 625,000
80,860 24% 625,000
750,000 750,000
110,860 28% 750,000
875,000 875,000
145,860 32% 875,000
1,000,000 1,000,000
185,860 36% 1,000,000
2,000,000 2,000,000
545,860 38% 2,000,000
3,000,000 3,000,000
925,860 40% 3,000,000
"(b) Tax Payable by Donor if Donee is a Stranger. —
When the donee or beneficiary is a stranger, the tax payable by the
donor shall be either the amount computed in accordance with the
preceding paragraph (a) or twenty per cent (20%) of the net gifts,
whichever is higher. For the purpose of this tax, a stranger is a
person who is not a: chanroblesvirtualawlibrary
"(ii) Brother, sister (whether by whole or half
blood), spouse, ancestor, and lineal descendant, or
"(iii) A relative by consanguinity in the collateral
line within the fourth degree of relationship."
Section 24. Section 122 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 122. Transfer for less than adequate and full
consideration. — Where property is transferred for less than an
adequate and full consideration in money or money's worth, then the
amount by which the fair market value of the property exceeded the
value of the consideration shall, for the purpose of the tax imposed by
this Chapter, be deemed a gift, and shall be included in computing the
amount of gifts made during the calendar year."
Section 25. Section 126 (a) of the National Internal
Revenue Code is hereby amended to read as follows: chanroblesvirtualawlibrary
"(a) Time and place of payment of tax. — The donor's
tax imposed by Section 121 shall be paid at the time the return is
filed. The tax shall be paid by the donor to the Revenue District
Officer, Collection Agent or duly authorized treasurer of the city or
municipality of which the donor was domiciled at the time of the
transfer or if there is no legal residence in the Philippines, with the
Office of the Commissioner of Internal Revenue." chanroblesvirtualawlibrary
Section 26. Section 128 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 128. Interest on extended payments.
"(a) Tax shown on the return. — If the time for the
payment of the amount determined as the tax by the donor is extended
under the authority of subsection (b) of Section 126 there shall be
collected, as a part of such amount, interest thereon at the rate of
twenty per centum per annum from the date when such payment should have
been made if no extension had been granted until the expiration of the
period of the extension.
"(b) Deficiency. — In case an extension for the
payment of a deficiency is granted, there shall be collected, as a part
of the tax, interest on the part of the deficiency the time for payment
of which is so extended at the rate of twenty per centum per annum, for
the period of the extension.
Section 27. Section 129 of the National Internal
Revenue Code is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 129. Interest on deficiency. — Interest upon
the amount determined as deficiency, shall be paid upon notice and
demand from the Commissioner, and shall be collected as a part of the
tax, at the rate of twenty per centum per annum, from the due date of
the tax to the date the deficiency is assessed. Provided, That the
maximum amount that may be collected as interest on deficiency shall in
no case exceed the amount corresponding to a period of three years, the
present provisions regarding prescription to the contrary
notwithstanding."
Section 28. Section 130 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 130. Additions to the tax in case of
nonpayment. —chanroblesvirtualawlibrary
"(a) Tax shown on the return. —chanroblesvirtualawlibrary
"(1) Payment not extended. — Where the amount of the
tax determined by the donor as the tax or any part of such amount is
not paid on the due date of the tax, there shall be collected as part
of the tax, interest upon such unpaid amount at the rate of twenty per
centum per annum, from the due date until it is paid: Provided, That
the maximum amount that may be collected as interest on delinquency
shall in no case exceed the amount corresponding to a period of three
years, the present provisions regarding prescription to the contrary
notwithstanding."
"(2) Payment extended. — Where an extension of the
time for payment of the amount so determined as the tax by the donor
has been granted, and the amount, the time for the payment of which has
been extended and the interest thereon determined under subsection (a)
of this Section 128 is not paid in full prior to the expiration of the
period of the extension, interest at the rate of twenty per centum per
annum, shall be collected on such unpaid amount from the date the same
was originally due until it is paid. chanroblesvirtualawlibrary
"(b) Deficiency. —chanroblesvirtualawlibrary
"(1) Payment not extended. — Where a deficiency, or
any interest assessed in connection therewith, or any addition to the
tax provided for in Section 131 is not paid in full within thirty days
from the date of the notice and demand from the Commissioner, there
shall be collected as part of the tax, interest upon the unpaid amount
at the rate of twenty per centum per annum, from the date of such
notice and demand until it is paid: Provided, That the maximum amount
that may be collected as interest on delinquency shall in no case
exceed the amount corresponding to a period of three years, the present
provisions regarding prescription to the contrary notwithstanding.
"(2) Payment extended. — If any part of the
deficiency the time for payment of which is extended is not paid in
accordance with the terms of the extension, there shall be collected,
as a part of the tax, interest on such unpaid amount at the rate of
twenty per centum per annum, from the date the same was originally due
until it is paid.
"(c) Surcharge. — If any amount of tax shown on the
return by the donor is not paid in full on or before the date
prescribed for its payment under paragraph (a) of this section, or any
amount of deficiency, or any interest assessed in connection therewith
is not paid in full within the period prescribed in the assessment
notice and demand required under paragraph (b) of this section, there
shall be collected in addition to the interest prescribed herein and in
Sections 128 and 129 and as part of the tax a surcharge of ten per
centum of the unpaid amount."
Section 29. Section 191 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 191. Interest on delinquency. — Where the
amount of the tax imposed under Section One hundred ninety-two, or any
part of such amount, is not paid on the due date of the tax, there
shall be collected, as part of the tax, interest upon such unpaid
amount at the rate of twenty per centum per annum from the due date
until it is paid." chanroblesvirtualawlibrary
Section 30. Section 193 of the National Internal
Revenue Code as amended by Presidential Decree No. 1705 is hereby
further amended to read as follows:cralaw:red
"Sec. 193. Payment of percentage taxes. —chanroblesvirtualawlibrary
"(a) In general. — (1) Declaration and payment of
quarterly gross sales, receipts, etc. — Unless otherwise specifically
provided it shall be the duty of every person conducting a business on
which a percentage tax is imposed under this Title, to render a
quarterly declaration on a cumulative basis of the amount of his, her
or its gross sales, receipts or earnings or gross value of output
actually removed from the factory or mill warehouse and to compute the
tax due thereon. chanroblesvirtualawlibrary
"(i) For each of the first three quarters of the
taxable year, the tax so computed shall be decreased by the amount of
tax previously paid and by the sum of the tax credits allowed under
this Title for the preceding and current quarters. The tax due shall be
paid not later than twenty days following the close of each of the
first three quarters of the taxable year: Provided, That any person
retiring from a business subject to the percentage tax shall notify the
nearest Internal Revenue Officer, file his return or declaration and
pay the tax due thereon within twenty days after closing his business.
"(ii) Final Annual Percentage Tax Return. —chanroblesvirtualawlibrary
On or before the twentieth day of the second month following the close
of the taxable year, every person liable to tax under this Section
shall file a final percentage tax return covering the total gross
sales, receipts or earnings or gross value of output actually removed
from the factory or mill warehouse for the preceding calendar or fiscal
year. If the sum of the total quarterly percentage tax payments made
for the first three quarters and the total tax credit allowed under
this Title for the preceding taxable year are not equal to the total
tax due on the entire gross sales, receipts or earnings or gross value
of the output for that taxable year, the taxpayer shall either:cralaw:red
"(a) Pay the tax still due; or chanroblesvirtualawlibrary
"(b) Credit to the extent allowable under this Title,
the amount excess tax credits shown on the final adjustment return
against the quarterly percentage tax liabilities for the succeeding
taxable quarters. chanroblesvirtualawlibrary
"For purposes of this Section, sales on consignment shall be considered
actually sold on the day of sale or sixty days after the date
consigned, whichever is earlier.
"(2) Where to file. — Except in cases where the
Commissioner otherwise permits, the percentage tax returns required to
be filed in the preceding paragraph shall be filed with the Revenue
District Officer, Collection Agent, or duly authorized Treasurer of the
municipality in which such person has his legal residence or principal
place of business in the Philippines.
"(3) Ad valorem penalties. —chanroblesvirtualawlibrary
"(i) Failure to file and pay the tax. — If the
percentage tax return is filed with a person other than that mentioned
in the preceding subparagraph, or if the percentage tax on any business
is not paid within the time specified above, the amount of the tax
shall be increased by twenty-five per centum, the increment to be a
part of the tax and the entire unpaid amount shall be subject to
interest at the rate of twenty per centum per annum.
"(ii) Willful neglect to file, or filing false or
fraudulent return. — In case of willful neglect to file the return
within the period prescribed herein, or in case a false or fraudulent
return is willfully made, there shall be added to the tax or to the
deficiency tax in case any payment has been made on the basis of such
return before the discovery of the falsity or fraud, a surcharge of
fifty per centum of its amount and the entire unpaid amount shall be
subject to interest at the rate of twenty per centum per annum. The
amount so added to any tax shall be collected at the time and in the
same manner and as part of the tax unless the tax has been paid before
the discovery of the falsity or fraud, in which case, the amount so
added shall be collected in the same manner as the tax. chanroblesvirtualawlibrary
"(b) Sales tax on imported articles. — When the
articles are imported, the percentage taxes established in Sections
194, 195, 196, 197, 198, 199 and 201 of this Code shall be paid in
advance by the importer, in accordance with the regulations promulgated
by the Minister of Finance and prior to the release of such articles
from Bureau of Custom's custody, based on the home consumption value or
price (excluding internal excise taxes) thereof, plus ten (10%) per
cent of such home consumption value or price, including postage,
commission, customs' duty and all similar charges, except freight and
insurance, to be declared in an importer's return, plus One hundred per
centum of such total value in the case of articles enumerated in
Sections 194 and 195; fifty per centum in the case of articles under
Sections 196 and 197; and twenty-five per centum in the case of
articles under Sections 198, 199 and 201. The tax imposed in this
section shall not apply to articles to be used by the importer himself
in the manufacture or preparation of articles subject to specific tax:
Provided, however, That where the National Economic and Development
Authority certifies to the availability of local raw materials of
sufficient quantity, comparable quality and price to meet the needs of
manufacturers subject to specific tax the importation of such raw
materials shall be subject to the tax herein imposed.
"(c) Value-Added Tax. — The provisions of this Title
to the contrary notwithstanding, when public interest so requires, the
President upon recommendation of the Minister of Finance, may subject
to the second sale of any article taxable under this Title to a
value-added tax at rates not exceeding fifty per cent (50%) based on
the gross selling price or gross value of any of the article sold,
bartered, exchanged or transferred, less the cost of the article."
Section 31. There is hereby inserted between Title
VIII and Title IX of the National Internal Revenue Code a new Title to
be known as "Title VIII-A, and a new Section to be known as Section
290-B.
"Title VIII-A. — Flexibility Clause."
"Sec. 290-B. — Flexibility Clause.
"(1) In general. — In the interest of the national
economy and general welfare and subject to the limitations herein
prescribed, the President upon recommendation of the Minister of
Finance, is hereby empowered to make adjustments on all internal
revenue taxes where such adjustments refer to the following:cralaw:red
"(a) Revision of rates; chanroblesvirtualawlibrary
"(b) Change in the classification of articles; and
"(c) Revision of taxable base including modification
of the manner of computing the tax.
"The above authority may be exercised by the President if any of the
following conditions exists:cralaw:red
"(a) When there is a need to obviate unemployment and
economic and social dislocation;chanroblesvirtualawlibrary
"(b) Where, due to adverse economic conditions it
becomes imperative to revise tax rates and/or taxable bases;chanroblesvirtualawlibrary
"(c) Where, in the interest of economic development
it is necessary to redirect expenditure or consumption
patterns; chanroblesvirtualawlibrary
"(d) Where, in the light of technological and social
changes, it is necessary to change the classification of certain
articles on the basis of the changed concepts of essentiality or the
degree of manufacturing done;chanroblesvirtualawlibrary
"(e) Whenever by reason of fluctuation or currency
values and/or inflation or deflation, the existing taxable base and/or
price levels are no longer realistic or consistent with the current
price levels;chanroblesvirtualawlibrary
"(f) Where, it is necessary to counter adverse
economic action on the part of another country.
"(2) Specific limitations on the exercise of
authority to make adjustments in all internal revenue taxes;chanroblesvirtualawlibrary
"(a) The existing tax rates may be increased or
decreased by not more than 50%;chanroblesvirtualawlibrary
"(b) Before any recommendation is submitted to the
President by the Minister of Finance pursuant to the provisions of this
Section, a public hearing shall whenever practicable be held and
interested parties afforded a reasonable opportunity to be heard."
Section 32. Section 295 of the National Internal
Revenue Code is hereby amended to read as follows:cralaw:red
"Sec. 295. Authority of the Commissioner to
compromise, abate, and refund/credit taxes. — The Commissioner may —chanroblesvirtualawlibrary
"(1) Compromise the payment of any internal revenue
tax when —chanroblesvirtualawlibrary
"(a) A reasonable doubt as to the validity of the
claim against the taxpayer exists; or chanroblesvirtualawlibrary
"(b) The financial position of the taxpayer
demonstrates a clear inability to pay the assessed tax. chanroblesvirtualawlibrary
"(2) Abate or cancel a tax liability, when —chanroblesvirtualawlibrary
"(a) The tax or any portion thereof appears to be
unjustly or excessively assessed; or
"(b) The administration and collection costs involved
do not justify the collection of the amount due.
"All criminal violations may be compromised except: (a) those already
filed in court, and (b) those involving fraud.
"The Commissioner of Internal Revenue may delegate his power to
compromise internal revenue cases, to the Deputy Commissioners and the
Regional Directors, subject to such limitations and restrictions as may
be imposed under rules and regulations to be promulgated for the
purpose.
"(3) Credit or refund taxes erroneously or illegally
received, penalties imposed without authority, refund the value of
internal revenue stamps when they are returned in good condition by the
purchaser, and, in his discretion, redeem or change unused stamps that
have been rendered unfit for use and refund their value upon proof of
destruction. No credit or refund of taxes or penalties shall be allowed
unless the taxpayer files in writing with the Commissioner a claim for
credit or refund within two years after the payment of the tax or
penalty." chanroblesvirtualawlibrary
Section 33. A new section to be known as Section
319-A, is hereby inserted between Sections 319 and 320 of the National
Internal Revenue Code to read as follows:cralaw:red
"Sec. 319-A. Protesting of assessment. — When the
Commissioner of Internal Revenue or his duly authorized representative
finds that proper taxes should be assessed, he shall first notify the
taxpayer of his findings. Within a period to be prescribed by
implementing regulations, the taxpayer shall be required to respond to
said notice. If the taxpayer fails to respond, the Commissioner shall
issue an assessment based on his findings.
"Such assessment may be protested administratively by filing a request
for reconsideration or reinvestigation in such form and manner as may
be prescribed by implementing regulations within thirty (30) days from
receipt of the assessment; otherwise, the assessment shall become final
and unappealable. chanroblesvirtualawlibrary
"If the protest is denied in whole or in part, the individual,
association or corporation adversely affected by the decision on the
protest may appeal to the Court of Tax Appeals within thirty (30) days
from receipt of the said decision; otherwise, the decision shall become
final, executory and demandable."
Section 34. Section 324 of the National Internal
Revenue Code as amended by Presidential Decree No. 1705 is hereby
amended to read as follows:cralaw:red
"Sec. 324. Preservation of books of accounts, and
other accounting records. — All the books of accounts including the
subsidiary books, and other accounting records, of corporations,
partnerships, or persons shall be preserved by them for a period
beginning from the last entry in each books until the last day
prescribed by Section 318 within which the Commissioner is authorized
to make an assessment. The said books and records shall be subject to
examination and inspection once only in a taxable year by internal
revenue officers, except in the following cases:cralaw:red
"(a) Fraud, irregularity or mistakes as determined by
the Commissioner;chanroblesvirtualawlibrary
"(b) The taxpayer requests reinvestigation;chanroblesvirtualawlibrary
"(c) Verification of compliance with withholding tax
laws and regulations;chanroblesvirtualawlibrary
"(d) Verification of capital gains tax liabilities;
and
"(e) In the exercise of the Commissioner's power
under Section 7(b) to obtain information from other persons chanroblesvirtualawlibrary
in which case, another or separate examination and inspection may be
made. Examination and inspection of books of accounts and other
accounting records shall be done in the taxpayer's office or place of
business or in the office of the Bureau of Internal Revenue. All
corporations, partnerships or persons that retire from business shall,
within ten days from the date of retirement or within such period of
time as may be allowed by the Commissioner in special cases, submit
their books of accounts, including the subsidiary books and other
accounting records to the Commissioner or any of his deputies for
examination, after which they shall be returned. Corporations and
partnerships contemplating dissolution must notify the Commissioner and
shall not be dissolved until cleared of any tax liability.
"Any provision of existing general or special law to the contrary
notwithstanding, the books of accounts and other pertinent records of
tax-exempt organizations or entities shall be subject to examination by
the Bureau of Internal Revenue for the purpose of ascertaining whether
such organizations or entities are complying with the conditions under
which they have been granted tax exemptions and their tax liability, if
any."
Section 35. Section 331 of the National Internal
Revenue Code is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 331. Informer's reward to persons instrumental
in the discovery of violations of the National Internal Revenue Code
and in the discovery and seizure of smuggled goods. —chanroblesvirtualawlibrary
"(1) For violations of the National Internal Revenue
Code. — Any person, except an internal revenue official or employee, or
other public official, or his relative within the sixth degree of
consanguinity, who voluntarily gives definite and sworn information,
not yet in the possession of the Bureau of Internal Revenue, leading to
the discovery of frauds upon the internal revenue laws or violations of
any of the provisions thereof, thereby resulting in the recovery of
revenues, surcharges and fees and/or the conviction of the guilty party
and/or the imposition of any fine or penalty, shall be rewarded in a
sum equivalent to fifteen per centum of the revenues, surcharges or
fees recovered and/or fine or penalty imposed and collected. The same
amount of reward shall also be given to an informer where the offender
has offered to compromise the violation of law committed by him and his
offer has been accepted by the Commissioner and in such a case, the
fifteen per centum reward fixed herein shall be based on the amount
agreed upon in the compromise and collected from the offender:
Provided, That should no revenue, surcharges or fees be actually
recovered or collected, such person shall not be entitled to a reward:
Provided, further, That the information mentioned herein shall not
refer to a case already pending or previously investigated or examined
by the Commissioner or any of his deputies, agents or examiners, or the
Minister of Finance or any of his deputies or agents; Provided,
finally, That the reward provided herein shall be paid under
regulations issued by the Commissioner of Internal Revenue with the
approval of the Minister of Finance.
"(2) For discovery and seizure of smuggled goods. —
To encourage the public and law-enforcement personnel to extend full
cooperation in eradicating smuggling, a cash reward equivalent to
fifteen per centum of the fair market value of the smuggled and
confiscated goods shall be given to persons instrumental in the
discovery and seizure of such smuggled goods."
Section 36. Transitional Provisions. — (1) In
implementing the provisions of Section 27 of Presidential Decree No.
1705, a corporation using the fiscal year as its accounting period
shall pay the fixed tax beginning 1981 in accordance with the following
transition rules:cralaw:red
(a) On or before January 31, 1981, the proportion of
the fixed tax prescribed in Section 192 of the National Internal
Revenue Code which the number of months beginning January 1, 1981 and
ending at the close of the taxpayer's fiscal year during 1981 bears to
twelve months; and,
(b) On or before last day of the first month of the
fiscal year which will begin in 1981, the full amount of fixed tax
prescribed under the Tax Code.
(2) In implementing Section 46 (b) of the National
Internal Revenue Code, as amended by Presidential Decree No. 1705, a
partnership which has been filing its income tax return on the basis of
the fiscal year shall file a fractional return for less than twelve
months ending December 31, 1980 in order to effect the change from
fiscal year to the calendar year basis beginning 1981. A separate
income tax return shall likewise be filed by an individual partner
covering distributive share in the net profit of the partnership as
declared in its fractional return. The said individual partners
separate return shall be filed on or before April 15, 1981 and the tax
due thereon, if any, shall be paid on the same date: Provided, further,
That if the total amount of income tax payable by the individual
partner exceeds P10,000.00, the Minister of Finance may allow payment
of the tax in installment with a period not to extend beyond November
30, 1981.
Section 37. Repealing Clause. — The provisions of
Republic Act Nos. 2338 and 4713, Presidential Decree Nos. 707 and 708,
Sections 158-A, 193(c), 259-A and 281-A of the National Internal
Revenue Code and all laws, rules and regulations or parts thereof
inconsistent with the provisions of this Decree are hereby repealed or
amended accordingly.
Section 38. Effectivity. — This Decree shall take
effect upon approval except Sections 3 and 9 hereof relating to the
amendments of Sections 23 and 30 (K) of the National Internal Revenue
Code, respectively, which shall take effect for the taxable year
1980. chanroblesvirtualawlibrary
Done in the City of Manila,
this 16th day of January, in the year of Our Lord, nineteen hundred and
eighty-one.
|