WHEREAS,
there is an imperative need to simplify the system of taxation and make
more efficient the collection of internal revenue taxes;chanroblesvirtualawlibrary
WHEREAS, there is an urgent need for additional tax revenue in support
of our national economic recovery program;chanroblesvirtualawlibrary
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 order and decree: chanroblesvirtualawlibrary
Section 1. Section 126 of the National Internal
Revenue Code, as amended by Presidential Decree No. 1994, is hereby
further amended to read as follows:cralaw:red
"Sec. 126. Cigars and cigarettes. — There shall be
collected on cigars and cigarettes, the following taxes:cralaw:red
"(a) Cigars. —chanroblesvirtualawlibrary
"(1) When the manufacturer's or importer's wholesale
price, less the amount of the tax does not exceed thirty pesos per
thousand, on each thousand two pesos and thirty centavos;chanroblesvirtualawlibrary
"(2) When the manufacturer's or importer's wholesale
price, less the amount of the tax exceeds thirty pesos but does not
exceed sixty pesos per thousand, on each thousand, four pesos and sixty
centavos; and
"(3) When the manufacturer 's or importer's wholesale
price, less the amount of the tax, exceeds sixty pesos per thousand, on
each thousand, seven pesos.
"(b) Cigarettes packed in thirties. —chanroblesvirtualawlibrary
"(1) When the retail price per pack does not exceed
two pesos and forty centavos, on each thousand, five pesos;chanroblesvirtualawlibrary
"(2) When the retail price per pack exceeds two pesos
and forty centavos, but does not exceed two pesos and ninety centavos,
on each thousand, nine pesos;chanroblesvirtualawlibrary
"(3) When the retail price per pack exceeds two pesos
and ninety centavos, on each thousand, thirteen pesos and fifty
centavos.
"(c) Cigarettes packed in twenties. —chanroblesvirtualawlibrary
"(1) When the retail price per pack does not exceed
four pesos and fifty centavos, on each thousand, eighteen
pesos; chanroblesvirtualawlibrary
"(2) When the retail price per pack exceeds four
pesos and fifty centavos, but does not exceed six pesos, on each
thousand, thirty six pesos;chanroblesvirtualawlibrary
"(3) When the retail price per pack exceeds six
pesos, but does not exceed seven pesos and fifty centavos, on each
thousand, fifty pesos;chanroblesvirtualawlibrary
"(4) When the retail price per pack exceeds seven
pesos and fifty centavos, but does not exceed nine pesos, on each
thousand, sixty pesos;chanroblesvirtualawlibrary
"(5) When the retail price per pack exceeds nine
pesos, but does not exceed ten pesos, on each thousand, eighty six
pesos;chanroblesvirtualawlibrary
"(6) When the retail price per pack exceeds ten
pesos, but does not exceed eleven pesos, on each thousand, one hundred
twenty pesos; chanroblesvirtualawlibrary
"(7) When the retail price per pack exceeds eleven
pesos, but does not exceeds twelve pesos, on each thousand, one hundred
and seventy pesos; and
"(8) When the retail price per pack exceeds twelve
pesos, on each thousand, two hundred twenty six pesos;chanroblesvirtualawlibrary
"(d) Imported cigarettes. — If the cigarettes are of
foreign manufacture, regardless of the retail price or contents per
pack, on each thousand, two hundred twenty six pesos;chanroblesvirtualawlibrary
"(e) Ad Valorem Tax on Cigarettes. — In addition to
the specific tax imposed herein, there shall be levied, assessed and
collected a 2% (two percent) ad valorem tax on cigarettes based on the
gross selling price, net of specific tax.
"(f) Effect of exchange of rates or classification. —
Whenever there is a change of tax rates or classification of cigars and
cigarettes; no downward reclassification for tax purposes of any
existing brand shall be allowed, and cigars and cigarettes subject to
tax at a lower rate before such change shall automatically be subject
to the corresponding higher rate or classification.
"In case a manufacturer introduces a new category of cigarettes using a
foreign brand or trademark under a licensing agreement, for tax
purposes, the maximum retail price of such cigarettes shall in no case
be lower than the prevailing maximum retail price of an existing
category of cigarettes using a foreign brand or trademark of complete
quality, blend, cost of production and other relevant factors. chanroblesvirtualawlibrary
"Duly registered and/or existing brands of cigarettes pack in twenties
shall not be allowed to be packed in thirties.
"(g) Determination of rates applicable to cigars. —
The price at which the various classes of cigars are sold at wholesale
in the factory or in the establishment of the importer to the public
shall determine the rate of the tax applicable to such cigars. If the
manufacturer or importer also sells, or allows to be sold, his cigars
at wholesale in another establishment of which he is the owner or in
the profits of which he has an interest, the wholesale price in such
establishment shall determine the rate of the tax applicable to the
cigars therein sold. Should such price be less than the costs of
manufacture or importation, such cost and expenses incurred until the
cigars are finally sold, plus 10% thereof shall constitute the
wholesale price.
"(h) Printing of rates of tax. — All packs of locally
manufactured cigarettes shall bear thereon, in print, the amount of
specific tax per pack except those used as samples. No cigarettes shall
be allowed to be removed from any factory unless this requirement has
been complied with.
"(i) As a necessary and urgent measure to conserve
foreign exchange to prevent possible revenue loss, henceforth the
Bureau of Internal Revenue shall not authorize the local manufacture of
non-essential commodities as cigarettes, fermented liquor and wine
using brand names of foreign products under licensing arrangements
other than the many existing brand names now authorized.
Section 2. All Laws, Decrees, Executive Orders and
Regulations, and other issuances or parts thereof which are
inconsistent with this Decree are hereby repealed, amended or modified
accordingly.
Section 3. Effectivity, This decree shall take
effect immediately. chanroblesvirtualawlibrary
Done in the City of Manila, on
this 3rd day of January, in the year of Our Lord, nineteen hundred and
eighty-six.
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