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ACT NO. 1045
ACT NO. 1045 - AN ACT FOR THE
PURPOSE OF PROVIDING REVENUE AND OF MAINTAINING THE PARITY OF THE
PHILIPPINE CURRENCY IN ACCORDANCE WITH THE PROVISIONS OF SECTIONS ONE
AND SIX OF THE ACT OF CONGRESS APPROVED MARCH SECOND, NINETEEN HUNDRED
AND THREE, BY PROVIDING FOR THE PURCHASE OF MEXICAN DOLLARS AS BULLION,
BY IMPOSING A TAX UPON WRITTEN CONTRACTS PAYABLE IN CERTAIN KINDS OF
CURRENCIES, AND BY REQUIRING THE PAYMENT OF A LICENSE TAX BY ALL
PERSONS, FIRMS, OR CORPORATIONS CONDUCTING THEIR CURRENT BUSINESS,
EITHER WHOLLY OR IN PART, IN SAID CURRENCIES, AND FOR OTHER PURPOSES
Section 1. For the
purpose of this Act the expression "local currency" shall signify
Mexican coins, Spanish and Spanish-Filipino coins and all other
metallic moneys not upon a gold basis, in circulation in the Philippine
Islands, and bank notes payable in said moneys.
Sec. 2. The Secretary of Finance and Justice is
hereby authorized whenever in his judgment the public interest may
require, to direct the Insular Treasurer and all provincial and
municipal treasurers to purchase Mexican dollars as bullion at their
bullion value, said value to be determined from time to time by the
Insular Treasurer, with the approval of the Secretary of Finance and
Justice. The cost of the bullion so purchased shall be a proper charge
against the gold-standard fund, and the money coined therefrom shall
accrue to that fund.
Sec. 3. Whenever any contract, debt, or obligation
payable by the terms thereof in local currency, is sought to be
enforced in any court and the right of the plaintiff is established, it
shall be the duty of the court to render judgment for the plaintiff to
recover as damages the lawful sum due to him, in Philippine pesos,
instead of in the currency mentioned in the contract, debt, or
obligation. For the purpose of determining the amount of such judgment,
the court shall receive evidence as to the real and just value in
Philippine currency of the currency named in the contract, debt, or
obligation, including evidence of the local market value of such
currency, its value in neighboring countries as currency, its value in
the great markets of the world, its bullion value, and any other facts
necessary to determine its true value. The local market value, whether
affected by the prohibition of the importation of such currency or by
other causes, shall not be conclusive evidence of the amount of the
judgment to be rendered in such cases. Payment of a judgment thus
rendered shall extinguish all liability on the contract, debt, or
obligation.
Sec. 4. Whenever any contract, debt, or obligation
is made payable in local currency, the debtor or person under
obligation to make payment may tender to the creditor in lieu of such
currency the just amount due thereon in Philippine pesos, computed in
the manner stated in the preceding section, and the effect of such
tender shall be the same as though the tender had been made in the kind
of currency named in such contract, debt, or obligation.
Sec. 5. The last two preceding sections shall
apply to all contracts, debts, or obligations made before the passage
of this Act, as well as to those made subsequent thereto.
Sec. 6. Every check, note, draft, bond, bill of
exchange, and every contract whatsoever, payable wholly or in part in
local currency and drawn or made upon, or subsequent to, October first,
nineteen hundred and four, shall bear upon its face an internal-revenue
stamp or stamps of a face value in Philippine currency to the amounts
hereinafter provided, said stamp or stamps to be properly cancelled at
the signing of said check, note, draft, bond, bill of exchange, or
contract with the initials of one of the parties thereto and the date
of the transaction. The rates of the stamp tax required upon every
check, note, draft, bond, bill of exchange, and upon every written
contract whatsoever, payable wholly or in part in local currency,
except as otherwise provided in this Act, shall be as follows:
(1) An ad valorem rate of one per centum levied in
Philippine currency upon the face value in local currency of each
aforementioned instrument drawn or made during the month of October,
nineteen hundred and four.
(2) An ad valorem rate of two per centum levied in
Philippine currency upon the face value in local currency of each
aforementioned instrument drawn or made during the month of November,
nineteen hundred and four.
(3) An ad valorem of three per centum levied in
Philippine currency upon the face value in local currency of each
aforementioned instrument drawn or made during the month of December,
nineteen hundred and four.
(4) An ad valorem rate of five per centum levied in
Philippine currency upon the face value in local currency of each
aforementioned instrument drawn or made subsequent to December
thirty-first, nineteen hundred and four.
Provided, That the aforementioned tax shall not be collected upon the
following:
(a) Checks, drafts, or bills of exchange drawn
against a deposit of local currency and made payable to a person, firm,
or corporation, or made payable to a bank and used in the purchase of a
draft or bill of exchange payable to a person, firm, or corporation, in
settlement either wholly or in part of a bona fide specific debt
payable in local currency by the depositor and contracted in writing or
reduced to writing prior to the first day of October, nineteen hundred
and four.
(b) Checks, drafts, or bills of exchange payable in
local currency and presented to a bank for deposit, payment, or sale by
a creditor who has received the same in payment of a bona fide specific
debt payable in local currency, contracted in writing or reduced to
writing prior to the first day of October, nineteen hundred and four.
(c) Deposit receipts, or other evidences of deposits
of local currency, given by a bank or other corporation or person to
any person, firm, or corporation making a deposit of local currency, in
accordance with the provisions of this Act, and for the purpose of
providing funds for the payment of bona fide specific obligations
payable in local currency and contracted in writing or reduced to
writing prior to the first day of October, nineteen hundred and four.
(d) Checks, drafts, notes, bills of exchange, and
contracts of any kind, the purpose and effect of which is the prompt
shipment out of the Philippine Islands of the amount of Mexican
currency the payment of which is called for in said check, draft, note,
bill of exchange, or contract of any kind.
(e) Checks, drafts, notes, bills of exchange, and
contracts of any kind, the purpose and effect of which is the prompt
transfer of local currency to the Government of the Philippine Islands
in accordance with the provisions of law.
(f) Contracts of any character whatsoever whose sole
purpose and effect is the transference of a local-currency account to a
Philippine-currency basis.
(g) Checks, drafts or bills of exchange payable in a
foreign country.
Sec. 7. Every transfer of ownership by indorsement
or otherwise after September thirtieth, nineteen hundred and four, of a
check, draft, note, bond, bill of exchange, or any contract whatsoever,
payable wholly or in part in local currency in the Philippine Islands
after September thirtieth, nineteen hundred and four, except such
instrument as are specified in subsections (a), (b), (c), (d), (e),
(f), and (g) of section six, shall be considered a separate and
distinct contract, and as such shall require a stamp or stamps.
Sec. 8. A tax of one per centum per month, payable
quarterly, in Philippine currency, shall be levied upon the average
daily balance of each deposit of local currency held after December
thirty-first, nineteen hundred and four, by any bank, corporation, or
individual receiving deposits in the Philippine Islands, and it shall
be the duty of every bank, corporation, or individual receiving
deposits in the Philippine Islands, which shall receive or continue
local-currency deposits after December thirty-first, nineteen hundred
and four, to furnish the Collector of Internal Revenue, within ten days
after the beginning of each quarter of the calendar year, a statement
of the names and addresses of holders of local-currency deposits held
by them during the preceding quarter, together with the average daily
balance of each deposit respectively as the Collector of Internal
Revenue shall require for the proper administration of this Act; and it
shall be the further duty of such banks, corporations, or individuals
to pay said tax to the Collector of Internal Revenue within thirty days
after the beginning of each quarter of the calendar year, deducting the
amount of the tax from the depositor's account. The tax receipt of the
Collector of Internal Revenue shall be a sufficient voucher for the
bank, corporation, or individual as to the proper use of the money and
shall be accepted by the depositor as money paid. Such average daily
balance shall be calculated by adding together the sums of deposit to
the credit of the depositor at the close of each business day in said
month and dividing the sum so obtained by the number of days upon which
said deposit was held: Provided, That any person wishing to maintain a
local-currency deposit after December thirty-first, nineteen hundred
and four, for the purpose of keeping funds for the payment at a future
date of a bona fide specific local-currency obligation contracted in
writing or reduced to writing prior to October first, nineteen hundred
and four, may, by obtaining in advance the express permission in
writing of the Secretary of Finance and Justice, and having the same
registered with the Collector of Internal Revenue or his deputy,
maintain such a deposit up to the time of the maturity of said
local-currency obligation without paying the aforementioned tax.
Sec. 9. Every check, draft, note, bond, bill of
exchange, and every contract whatsoever payable in local currency, and
every deposit so payable shall be presumably subject to the taxes
levied in accordance with the provisions of this Act; and the
obligation shall rest upon the drawer or maker, holder or beneficiary,
and, in case of transfer by indorsement, upon each indorser, indorsee,
or holder of said check, draft, note, bond, bill of exchange, or bank
deposit, who claims exemption, to prove that he is entitled to any of
the exemptions provided in this Act. No check, draft, note, bond, bill
of exchange, or any contract whatsoever, payable in local currency,
shall be exempted from the payment of the stamp tax provided for in
sections six and seven of this Act, unless the contract for which
exemption is claimed shall be registered with the Collector of Internal
Revenue or his deputy before October first, nineteen hundred and four,
and a certificate be attached thereto by the Collector of Internal
Revenue or his deputy certifying the exemption; and no deposit of local
currency shall be exempted from the payment of the tax on bank deposits
as provided in sections eight and nine of this Act unless the exemption
is obtained as herein provided, together with a certificate certifying
the same, prior to January first, nineteen hundred and five.
Sec. 10. Every check, draft, note, bond, bill of
exchange, and every contract whatsoever which is not properly stamped
in accordance with the provisions of this Act shall be void, and every
person, firm bank, or corporation who gives or receives such check,
draft, note, bond, bill of exchange, or contract which is subject to
the stamp tax under this Act without its being properly stamped, or who
shall receive or keep a deposit of local currency or make such a
deposit without observing the provisions of this Act, shall be guilty
of a criminal offense, and shall be liable to a fine not exceeding the
face value in Philippine currency of fifty per centum of the number of
pesos of local currency called for in check, draft, note, bond, bill of
exchange, or contract, or of the deposit so kept.
Sec. 11. (a) All persons, firms, or corporations
who engage in any business whatsoever in the Philippine Islands, after
December thirty-first, nineteen hundred and four, and make use of local
currency to any extent whatever in either buying, selling, or renting
goods, property, or services must, previously to engaging in such
business and annually thereafter, in addition to the other licenses now
required by law, obtain a license from the Collector of Internal
Revenue in the manner prescribed in the provisions of the Industrial
Tax Law for the issuance of industrial licenses: Provided, That
persons, firms, banks, or other corporations may deal in the checks,
drafts, notes, bonds, bills of exchange, and contracts which are
mentioned in paragraphs (a), (b), (c), (d), (e), (f) and (g) of section
six as not subject to a stamp tax, or may make such local-currency
deposits as are exempted from taxation by sections eight and nine
without securing such a license: And provided further, That a bank,
corporation, or individual may purchase local currency with the purpose
and effect of promptly shipping said currency out of the country,
without securing such a license: and provided further, That the
collection of accounts, debts, or other obligations made or incurred
prior to January first, nineteen hundred and five, shall not be
considered current business subject to the provisions of this section.
(b) The licenses shall be classified in accordance
with the classification of rates of the industrial taxes, and the
amount payable for a license of the first class shall be ten thousand
pesos, Philippine currency; for a license of the second class, five
thousand pesos, Philippine currency; for a license of the third class,
one thousand pesos, Philippine currency; and for a license of the
fourth class, five hundred pesos, Philippine currency.
(c) Each separate factory, shop, store, or other
business establishment, and each separate trade or business whether
owned, managed, or carried on by the same or different persons, firms,
or corporations, shall be considered for the purpose of this Act a
separate industry, and shall require for its legal conduct or
management a separate license of the class provided for in this Act.
This section of this Act shall be administered in accordance with the
provisions of the Industrial Tax Law so far as those provisions are not
contrary to the provisions of this Act.
(d) Any person, firm, or corporation who shall use
local currency in the conduct of his business without a license and
contrary to the provisions of this Act shall be guilty of a criminal
offense, and shall be subject to a fine of not exceeding ten per centum
of the license fee required for his business, in addition to the
payment of the license fee. Each separate transaction in local currency
contrary to law shall constitute a separate offense and shall subject
the offender to a separate fine of not exceeding ten per centum of the
license fee.
Sec. 12. Immediately upon the passage of this Act
it shall be the duty of the Chief of the Division of the Currency to
prepare, and have published in the principal languages and dialects of
the Philippine Islands, an announcement explaining the new Philippine
currency and the more important laws and official regulations
pertaining to the use of that currency, and the methods provided for
the withdrawal of local currency from circulation. Copies of this
announcement shall be sent to all the provincial governors, provincial
and municipal treasurers, presidents and municipal councilors of the
Philippine Islands, and shall be posted and advertised as widely as
possible throughout the Philippine Islands.
Sec. 13. This Act shall be administered by the
Collector of Internal Revenue for the Philippine Islands.
Sec. 14. This Act shall take effect on its
passage.
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