(REPEALED
BY PRESIDENTIAL DECREE NO. 908)
WHEREAS, the local textile industry has been experiencing lately a
depressed market brought about by global inflation and rising
production costs;chanroblesvirtualawlibrary
WHEREAS, the local textile industry may experience further drops in its
export sales which may be brought about by competition from other
countries which have rationalized their textile industries to attain
economies;chanroblesvirtualawlibrary
WHEREAS, in order to help and promote the local textile industry, bail
them out of distressed conditions and meet foreign competition, certain
tariff incentives must be provided to reduce its production cost;chanroblesvirtualawlibrary
WHEREAS, for health reasons, there has been a growing preference for
filter-tipped cigarettes here and abroad as may be readily noted in the
very significant trend toward the production of said type of cigarettes
even in the local cigarette industry;chanroblesvirtualawlibrary
WHEREAS, the increasing demand for cigarette filter rods by the local
cigarette industry has encouraged local entrepreneurs to engage in the
local manufacture of said filter rods, thereby contributing to the
dollar conservation program of the government even in a modest degree;chanroblesvirtualawlibrary
WHEREAS, the development and growth of the local cigarette filter rod
industry, whose major raw material, acetate tow, is derived from wood
pulp, will be in line with the government's objective to accelerate the
economic development of the country utilizing local indigenous
materials in the manufacture of industrial products with the use of
Filipino skill and labor;chanroblesvirtualawlibrary
WHEREAS, under the prevailing system of taxation, local cigarette
manufacturers producing filter rods for their own use in the production
of their brands of cigarettes enjoy an undue advantage over other
cigarette manufacturers who patronize locally-made filter rods as the
former are exempt from the payment of advance sales tax on their
importation of acetate tow and other raw materials and are further
saved from additional costs of packing, delivery and the like
incidental expenses, which situation results not only in unfair
competition in the procurement of raw materials vital to the local
cigarette industry but also serves as a disincentive for the local
producers of filter rods to produce more to meet local demands as well
as a barrier to a possible participation in the world market for filter
rods as a means of bolstering our foreign exchange revenues; chanroblesvirtualawlibrary
WHEREAS, the exemption from advanced sales tax of imported materials to
be used by the importer himself in the manufacture of articles subject
to the specific tax provided in Section 183(B) of the Tax Code was
granted starting only in 1951 by Republic Act No. 594 when there were
still no local manufacturers of said imported materials. Considering
that there are now several manufacturers of the imported materials
covered by the exemption, the continued grant thereof prejudices local
manufacturers, hence, the need for the removal of such exemption in
order to place, taxwise, local manufacturers on equal footing with
manufacturers of articles subject to specific tax, and at the same time
encourage and promote local manufacturer of said articles;chanroblesvirtualawlibrary
WHEREAS, the specific tax on cigarettes is now based on selling price
and no longer on the kind of tobacco fillers and length, thus rendering
inapplicable to cigarettes the philosophy of the exemption from the
sales tax of articles used in the manufacture of articles subject to
specific tax;chanroblesvirtualawlibrary
WHEREAS, in line with the goals and objectives of the New Society, it
has now become imperative for the government to take a hand in
stabilizing the situation to insure fair competition in the local
cigarette industry as well as stimulate the development and growth of
the local manufacturers of cigarette filter rods and ultimately
encourage the exportation of locally produced filter rods. chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers in me vested by the Constitution do hereby
decree and order as part of the law of the land:cralaw:red
Section 1. Subsection (b) of Section 183 of the
National Internal Revenue Code, as amended, is hereby further amended
to read as follows:cralaw:red
(b) Sales tax on imported articles. — When the
articles are imported, the percentage taxes established in sections one
hundred eighty-four, one hundred eighty-four-A, one hundred
eighty-five, one hundred eighty-five-A, one hundred eighty-five-B, one
hundred eighty-six and one hundred eighty-six-B of this code shall be
paid in advance by the importer, in accordance with the regulations
promulgated by the Secretary of Finance and prior to the release of
such articles from customs' custody, based on the import invoice value
thereof, certified to as correct under penalties of perjury by the
Philippine Consul at the port of origin if there is any, including
freight, postage, insurance, commission, customs duty and all similar
charges plus one hundred per centum of such total value in the case of
articles enumerated in Section one hundred eighty four; one hundred
eighty-four-A; fifty per centum of such total value in the case of
articles enumerated in sections one hundred eighty-five, one hundred
eighty-five-A and one hundred eighty-five-B; and twenty-five per centum
in the case of articles enumerated in section one hundred eighty-six
and one hundred eighty-six-B. The tax imposed in this section shall not
apply to articles to be used by the importer himself in the manufacture
of motor fuel oils and other fuels. chanroblesvirtualawlibrary
The provisions of this Act shall not be construed as nullifying
whatever interpretation the government has given to the word "importer"
heretofore.
In the case of tax-free articles brought or imported to the Philippines
by persons, entities or agencies exempt from the tax which are
subsequently sold, transferred, or exchanged in the Philippines to
non-exempt private persons or entities, the purchasers shall be
considered the importers thereof. The tax due on such articles shall
constitute a lien on the articles itself superior to all other charges
or liens, irrespective of the possessor thereof.
Any percentage tax paid under Section 184, 184-A, 185, 185-A, 185-B
186, 186-B on domestically manufactured or on imported raw materials
used in the manufacture of finished products exported shall be allowed
to be credited against other tax liabilities of the
manufacturer-exporter; Provided, however, that said percentage taxes
paid are indicated as a separate item in the invoices. chanroblesvirtualawlibrary
Section 2. Heading Nos. 32.05, 32.06 and 32.07,
Chapter 32 of the Revised Tariff and Customs Code of the Philippines,
as amended, are hereby further amended to read as follows:cralaw:red
"32.05 Synthetic organic dyestuffs
including pigment
(dyestuffs); synthetic organic
products of a kind used as
luminophores; products of
the kind known as optical
bleaching agents,
substantive to the fibre;
natural indigo: chanroblesvirtualawlibrary
A. When directly
imported by textile
mills under prior joint
authorization of the
Tariff Commission and
Board of Investments ad val. 10%
B. Others ad val.
30%
"32.06 Colour lakes:cralaw:red
A. When imported
directly by textile mills
under prior joint
authorization of the
Tariff Commission and
Board of Investments ad val. 10%
B. Others ad val. 30%
"32.07 Other colouring matter,
inorganic products of a kind
used as luminophores:cralaw:red
A. When imported
directly by textile mills
under prior
authorization of the
Tariff Commission and
Board of Investments ad val. 10%
B. Others ad val. 30%
Section 3. Heading No. 51.01, Chapter 51 of the
Revised Tariff and Customs Code of the Philippines, as amended, is
hereby further amended to read as follows: chanroblesvirtualawlibrary
"51.01 Yarn of man-made fibres
(continuous), not put up for
retail sale:cralaw:red
A. Articles not included in
subheadings B and C
hereof ad val. 30%
B. Polyester yarn ad val.
50% chanroblesvirtualawlibrary
C. Polyester yarn and
polyfil, when imported
directly by textile mills
under prior joint
authorization of the
Tariff Commission and
Board of Investments ad val. 10%
Section 4. Heading No. 55.01, Chapter 55 of the
Revised Tariff and Customs Code of the Philippines, as amended, is
hereby further amended to read as follows:cralaw:red
"55.01 Cotton, not carded or combed. ad val.
Free"
Section 5. Heading No. 56.02, Chapter 56 of the
Revised Tariff and Customs Code of the Philippines, as amended by
Presidential Decree No. 34, is hereby further amended to read as
follows: chanroblesvirtualawlibrary
56.02 Continuous filament tow for
the manufacture of man-
made fibres (discontinuous):cralaw:red
A. Articles not included in
subheading B hereof ad val. 10%
Not included in
subheading A above
are acetate tow and
such similar
continuous filament
tow, used a major raw
material in the
manufacture of
cigarette filter rods,
imported by local
producers thereof with
a total volume of sales
of less than 3 billion
filter rods for the
calendar year 1973 or
less than 250 million
filter rods monthly
sales average during
the same period subject
to ad val. 100%
B. Polyester filament tow,
except when imported
directly by textile
spinning mills under
prior joint
authorization of the
Tariff Commission and
the Board of
Investments ad val. 30% chanroblesvirtualawlibrary
Section 6. Heading No. 59.01, Chapter 59 of the
Tariff and Customs Code of the Philippines, as amended by Presidential
Decree No. 34, is hereby further amended to read as follows:cralaw:red
59.01 Wadding and articles
of wadding; textile
flock and dust and mill
neps ad val. 100%
Section 7. In accordance with the provisions of
Section 160 of the National Internal Revenue Code, as amended,
governing the operations and business transactions of persons or firms,
engaged in the manufacture, importation, or sale of, among others,
cigarette filter tips or filter rods, the Commissioner of Internal
Revenue shall, upon due verification of an application in writing,
issue the necessary certification to the local producer of cigarette
filter rods concerned attesting to the applicant's volume of sale of
filter rods for the calendar year 1973 or his average monthly sales
thereof during the same period for the purpose of determining the
taxability or non-taxability of the acetate tow or such other similar
raw materials imported by him for the local manufacture of cigarette
filter rods. No importation of said acetate tow or such other similar
raw materials shall be released from Customs custody without the
written authority to release the same to be issued by the Commissioner
of Internal Revenue upon written application therefor filed by the
local producer-importer concerned and after a final tax determination
shall have been made by the Bureau of Customs and the Customs duties,
fees and internal revenue taxes, if any, due thereon have been paid.
Section 8. All laws, order and decrees as well as
rules and regulations inconsistent herewith are hereby repealed and/or
modified accordingly.
Section 9. This Decree shall take effect immediately.
Done in the City of Manila,
this 21st day of July, in the year of Our Lord, nineteen hundred and
seventy-five.
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