REPUBLIC ACT NO. 4095 - AN ACT TO
AMEND CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED THIRTY-ONE HUNDRED
TWENTY-SEVEN, AUTHORIZING THE EXEMPTION OF BASIC INDUSTRIES FROM THE
PAYMENT OF CERTAIN TAXES
Section 1. Section two of Republic Act Numbered Thirty-one
hundred twenty-seven is amended to read as follows:
Sec. 2. Basic Industries. — For purposes of this
Act, the following are basic industries:
"(a) Basic iron and steel, nickel, and aluminum
industries;
"(b) Basic chemical industries, anti-biotics and
fungicides, including cement manufacture and fertilizers;
"(c) Copper and alumina smelting and refining;
"(d) Pulping;
"(e) Deep-sea fishing and the canning of sea foods
and manufacture of fish meals; the manufacture of nets and other
fishing gear;
"(f) Refining of gold;
"(g) Mining and exploration of base metals, nuclear
materials and crude oil or petroleum;
"(h) Shipbuilding and dry-docking;
"(i) Coal;
"(j) Cattle and dairy industry;
"(k) Manufacture of veneer and plywood;
"(l) Manufacture of irrigation and waterworks
equipment, mining equipment, farm machineries, railroad rolling stocks,
gasoline and diesel engines; manufacture of firearms, manufacture of
spare parts and tools exclusively for irrigation and waterworks
equipment, mining equipment, farm machineries, railroad rolling stocks,
gasoline and diesel engines;
"(m) Processing of ramie and coconut coir and the
manufacture of synthetic fibers;
"(n) Manufacture of cigars, chewing tobacco, and pipe
tobacco;
"(o) Manufacture of clay-silica refractories;
"(p) Canning of food products out of local raw
materials; manufacture of cassava flour; and manufacture and/or
processing of cereals.
"The tax exemption privileges granted herein shall be forfeited by any
of the above-enumerated industries whose end-of-the-year profit shall
be in excess of thirty per cent (30%) of the cost of production in so
far as domestic sales are concerned."
Sec. 2. Section three of the same Act is amended
to read as follows:
"Sec. 3. Definition of terms. — The term "basic iron
and steel, nickel, and aluminum industries' shall refer to the
manufacture of iron and steel, nickel, and aluminum from ore materials,
including all processes from smelting in blast furnaces to the
semi-finished stage, namely; the production of pig ingots, pellets,
billets, blooms, slabs or bars and rolling and/or processing, including
automatic welding, into basic forms either separately or part of the
integrated processes in the industry, such as sheets, plates, strips,
tubes, tubings, conduits, pipes, rails, rods, tin-plates and the like,
and rough castings and forgings and other extrusions including tools,
dies and moulds.
The term 'basic chemical' industries, including fertilizers' shall
refer to the manufacture of basic industrial chemicals, such as acids,
alkalis, salts, except sodium chloride and calcium hydroxide,
intermediates, dyes colour lakes and toners; explosive; ammunition;
synthetic resins; synthetic rubber; fertilizers; all chemicals for the
production of medicants and insecticides; petro-chemical; bitumen;
sucro-chemical; and coke and coal chemicals.
"The term 'copper smelting and refining' shall refer to the manufacture
of copper into basic forms, such as ingots, bars, billets, sheets,
strips, circles, sections, rods castings and extrusion.
"The term 'pulping' shall refer to the manufacture of pulp from woods,
rags, rice straw, bagasse, abaca waste and bamboo.
"The term 'deep-sea fishing' shall refer to commercial fishing in sea
and inland waters using any tonnage of fishing vessels of our three
tones gross capacity, licensed by the Bureau of Fisheries.
"The term 'gold refining' shall refer to the smelting bars, bullion and
treatment of chemical reagents, electro refining, to remove other metal
contents leaving gold alone.
"'Mining' shall mean the exploration for and extraction of minerals
which occur in nature as either solids, liquids or gases.
"'Base metals' shall mean all metallic minerals except noble metals.
"'Nuclear materials' shall refer to uranium, plutonium, curium and
other fissionable materials.
"Processing of ramie shall mean degumming decorticating, and spinning
into ramie yarn.
"The term 'shipbuilding and dry-docking' shall refer to the
construction of vessels, tugboats, barges, tankers, and all component
parts related to the industry, including dredging and dry-docking
equipment.
"The term 'cattle and dairy industry' shall refer to the raising of
cattle and the acquisition of breeding and dairy animals, equipment,
materials and machineries directly connected with the industry,
including the manufacture and processing of meat and dairy products.
"The term 'cement manufacturing' shall refer to the manufacture of
cement obtained by firing limestone naturally containing, or mixed
artificially with, a suitable proportion of clay, and by subsequent
crushing of the clinker so obtained (Portland Cement); including cement
fondu (aluminous cement), slag cement, super-sulphate cement (ground
blast furnance slag mixed with an accelerator and calcined gypsum),
pozzolana cement, fibro and roman cement, and mixtures thereof.
"The term 'spare parts' shall include only metallic parts exclusively
for railroad rolling stocks, irrigation and waterworks equipment,
mining equipment, farm machineries, gasoline and diesel engines.
"The term 'alumina smelting and refining' refers to the production and
manufacture of aluminum from ore or alumina into one or more basic
forms such as ingots, billets, bars, sheets, strips, circles, tubes,
rods, and castings, pipes, section and extrusions."
Sec. 3. The first, third, and fourth paragraphs of
Section four of the same Act are amended to read as follows:
"Sec. 4. Creation and composition of Board of
Industries. — For the purpose of carrying out the objectives of this
Act, there is hereby created a Board of Industries, hereinafter
referred to as the `Board', to be composed of seven members, namely.
the Chairman of the National Economic Council, the Secretary of
Commerce and Industry, the Secretary of Agriculture and Natural
Resources, the Secretary of Finance, the Chairman of the
Joint-Legislative-Executive Tax Commission and two members from the
private sector who shall be citizens of the Philippines, of good moral
character and of recognized competence in the economics of finance,
commerce and industry to be appointed by the President of the
Philippines with the consent of the Commission of Appointments.
"Four members of the Board shall constitute a quorum.
"Members of the Board who are government officials shall serve without
additional compensation. Private citizens who are appointed to sit in
the Board shall receive a per diem of fifty pesos for each day of
session of the Board actually attended by them. The Chairman,
Vice-Chairman, Secretary and members of the Board shall, however, be
allowed commutable traveling, representation and other necessary
expenses."
Sec. 4. Sub-sections (a) and (d) of Section five
of the same Act are amended to read as follows:
"Sec. 5. Powers and duties of the Board. — The Board
shall have the following powers and duties:
"(a) To process and approve all applications filed
with it for exemptions provided for in Section six of this Act of firms
duly qualified under this Act to engage in basic industries and issue
the necessary certificates of tax exemption therefor, subject to the
requirements prescribed by section eight and the limitations imposed in
Section nine of this Act and to follow up the activities of the
applicant for the purpose of determining compliance therewith.
"(d) To appoint a Technical Staff and other personnel
as it deems advisable in accordance with provisions of the Civil
Service Law; and to adopt a salary schedule for the executive and
technical personnel, any provisions of law to the contrary
notwithstanding."
Sec. 5. Section six of the same Act is amended to
read as follows:
"Sec. 6. Exemption from taxes and period of exemption
of basic industries. — Any person, partnership, company or corporation
who or which is now engaged or shall engage in a basic industry shall
be exempted from payment of the special import tax, the compensating
tax, and the tariff duties in respect of the importation of machinery,
spare parts and equipment as follows:
"(a) One hundred per centum of the taxes due during
the period from the date of approval of this Act to December
thirty-one, nineteen hundred sixty-five;
"(b) Seventy-five per centum of the taxes due during
the period from January first, nineteen hundred sixty-six to December
thirty-first, nineteen hundred sixty-eight;
"(c) Fifty per centum of the taxes due during the
period from January first, nineteen hundred sixty-nine to December
thirty-first, nineteen hundred and seventy, after which such person,
partnership, company or corporation shall be liable in full to all
taxes: provided, that packaging and assembly plants shall not be
entitled to the benefits granted in this Act: provided, further, that
exemption from taxes for spare parts as mentioned in this section shall
only apply to spare parts imported at the time of the original
importation of the machinery and equipment: provided, finally, that in
the case of shipbuilding and dry-docking, the steel plates necessary
for the construction of ships shall also be exempt from the payment of
the above-mentioned taxes until such time as there shall have been
established in the Philippines as integrated steel industry capable of
supplying the required steel plates for the shipbuilding and
dry-docking industry, in which case the tax exemption for such steel
plates shall automatically be withdrawn."
Sec. 6. Section eight of the same Act is amended
to read as follows:
"Sec. 8. Requirement prior to approval of exemption.
— The exemption from special import tax, compensating tax, and tariff
duties on machinery, spare parts and equipment granted to basic
industries shall be made only when the Board, after investigation, find
that (a) no machinery, spare parts and equipment of domestic
manufacture are available in reasonable quantity and quality at
reasonable prices; (b) the same machinery and equipment are directly
and actually needed and will be used exclusively in the manufacture of
articles by the grantee of exemption under this Act; and (c) the
shipping documents covering the importation are in the name of the
applicant firm to whom the goods shall be delivered directly by the
customs authorities."
Sec. 7. Section nine of the same Act is amended to
read as follows:
"Sec. 9. Limitation in the grant of exemption. —
Where several applications for exemption are filed in connection with
the same industry, the Board shall approve them in the order in which
they have been filed and for this purpose the date appearing on the
registry book of the Board and stamped on the application shall be
considered the date of filing: provided, that where two or more
applications are pending at the time and not all the applications
should be approved as they are in excess of the demands of the market,
the applicant which has the greater Filipino participation and/or
control shall be given preference.
Sec. 8. A new section is inserted between Section s
nine and ten of the same Act, to read as follows:
"Sec. 9-A. Withdrawal of imported machineries, spare
parts and equipment pending approval of exemption. — Persons or firms
who or which have pending applications for tax exemption privileges
under this Act and whose imported machinery, spare parts and equipment
are already within the Bureau of Customs jurisdiction, may withdraw
such machinery, spare parts and equipment from the customs house upon
the posting of a bond equivalent to the duties, taxes and other charges
due thereon, in accordance with the rules and regulations of the
Department of Finance and the Bureau of Customs.”
Sec. 9. The first paragraph of Section ten of the
same Act is amended to read as follows:
"Sec. 10. Penal Provisions. — Any grantee under this
Act who shall make use of that privileges granted hereunder for
purposes other than those for which such privileges were granted or who
shall in any other manner violate the provisions of this Act or any
rules or regulations promulgated by the Board in accordance therewith
shall be penalized with imprisonment of not less than five years but
not exceeding ten years and fine of not less than eight thousand pesos
but not exceeding two hundred thousand pesos and, in addition, such
violation shall ipso facto cause forfeiture of the exemption so
granted, and taxes and duties not paid by virtue of the grant of
exemption shall be paid to the Government with surcharge equivalent to
fifty per centum of the amount due and payable."
SECTION 10. Section eleven of the same Act is hereby
amended to read as follows:
"Sec. 11. Submission of report. — The Board shall
submit its annual report to the President of the Philippines and to
both presiding officers of Congress not later than June thirty of each
year."
SECTION 11. A new section is inserted between
Section s eleven and twelve of the same Act, to read as follows:
Sec. 11-A. Fixed fees. — For acts done, services
rendered, and documents issued by the Board of Industries, the
following fees shall be charged and collected, the same to accrue to
the general fund of the National Government:
"(a) Filing fee P20.00
"(b) Registration fee P100.00
to be collected upon filing of the application form and the issuance of
the certificate of exemption, respectively."
SECTION 12. Section twelve of the same Act is amended
to read as follows:
"Sec. 12. Funds. — To carry out the provisions of
this Act, the sum of five hundred thousand pesos is hereby appropriated
out of any funds in the National Treasury not otherwise appropriated.
Thereafter, the amount necessary for the operation of the Board shall
be included in the annual General Appropriations Act."
SECTION 13. Section s fourteen of the same Act is
amended to read as follows:
"Sec. 14. Special provisions. — Any person,
partnership, company or corporation who or which may qualify under
existing general laws and is qualified under this Act may choose
between this Act and all other Acts, but in no case shall such grantee
be entitled to both simultaneously.
"For this purpose, within fifteen (15) days from date of receipt of
advice of the approval of his or its application filed under this Act,
the grantee may make a choice as to which Act or Acts granting tax
exemption privileges he or it prefers to enjoy. Failure to inform the
Board in writing of his or its choice within the aforestated period of
fifteen (15) days shall be construed as abandonment of the tax
exemption privileges under this Act."
SECTION 14. A new section is inserted between
sections fourteen and fifteen of the same Act, to be known as section
fourteen-A, to read as follows:
"Sec. 14-A. Transitory provisions. — All formal
applications filed with the Board of Industries on forms duly
prescribed by aid board shall be processed and evaluated by the
technical staff in accordance with the provisions of Republic Act
Numbered Three thousand one hundred twenty-seven: provided, that only
such applications as were received on or before the date this Act shall
have been passed by the both houses of Congress, shall be processed and
evaluated."
SECTION 15. Effectivity. — This Act shall take effect
upon approval and shall continue to be effective until December
thirty-first, nineteen hundred and seventy.
Approved: June 19, 1964
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