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collection of Philippine laws, statutes and codes
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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 426
PRESIDENTIAL DECREE NO. 426 -
AMENDING CERTAIN PROVISIONS OF THE LOCAL TAX CODE ENACTED UNDER
PRESIDENTIAL DECREE NO. 231, DATED JUNE 28, 1973
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chanroblesvirtualawlibrary
WHEREAS,
the Local Tax Code enacted under Presidential Decree No. 231 took
effect on July 1, 1973;chanroblesvirtualawlibrary
WHEREAS, there is an imperative necessity to enact amendatory measures
to make the Local Tax Code more responsive and attuned to the changing
patterns of business and economic trends and thereby transform it into
a more effective instrument by which local governments may generate
urgently-needed revenues without unduly disturbing price levels in the
domestic market;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
decree, order, and make as part of the law of the land the following
amendments to the Local Tax Code:cralaw:red
Section 1. (a) Paragraphs (a), (p), (r), (f-1),
(k-1), and (p-1) of Section 3 of the Local Tax Code shall read as
follows:cralaw:red
"Sec. 3. Definitions. — When used in this Code —chanroblesvirtualawlibrary
"(a) Agricultural product includes the yield of the
soil such as corn, rice, wheat, rye, hay, coconuts, sugar cane,
tobacco, root crops, vegetables, fruits, flowers, etc. and their
by-products; ordinary salt; all kinds of fish; poultry; and livestock
and animal products, whether in their original form or when preserved
in a more convenient and marketable form through the simple processes
of freezing, drying, salting, smoking and stripping.
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"(p) Hotel includes any house or building or portion
thereof in which any person or persons may be regularly harbored or
received as transient or guests. A hotel shall be considered as living
quarters and shall have the privilege to accept any number of guests
and to serve food to the guests therein.
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"(r) License or Permit is a right or permission
granted in accordance with law by a competent authority to engage in
some business or occupation or to engage in some transaction.
"(f-1) Public market refers to any place, building or
structure of any kind designated as such by the local board or council,
except public streets, plazas, parks, and the like.
"(k-1) Services means the duties, work or functions
performed or discharged by a government officer, or by a private person
contracted by the government, as the case may be.
"(p-1) Wharfage means a fee assessed against the
cargo of a vessel engaged in foreign or domestic trade based on the
quantity, weight or measure received and/or discharged by such vessel."
(b) The following definitions of terms are hereby
adopted for inclusion in section 3 of the Local Tax Code:cralaw:red
(r-1) Boarding house includes any house where
boarders are accepted for compensation by the week or by the month, and
where meals are served to boarders only.
(s-1) Business agent (Agente de negocios) includes
all persons who act as agent of others in the transaction of business
with any public officer, as well as those who conduct collecting,
advertising, employment, or private detective agencies.
(t-1) Cabaret/Dance hall includes any place or
establishment where dance is permitted to the public in consideration
of any admission, entrance, or any other fee paid on, before or after
the dancing, and where professional hostesses or dancers are employed.
(u-1) Carinderia refers to any public eating place
where foods already cooked are served at a price.
(v-1) Collecting agency includes any person other
than a practicing Attorney-at-Law engaged in the business of collecting
or suing debts or liabilities placed in his hands, for said collection
or suit, by subscribers or customers applying and paying therefor;
while a "Mercantile Agency" is any person engaged in the gathering
information as to the financial standing ability or credit of persons
engaged in business, and reporting the same to subscribers or to
customers applying and paying therefor.
(w-1) Compounder comprises every person who, without
rectifying, purifying or refining distilled spirits shall, by mixing
such spirits, wine, or other liquor with any materials except water,
manufacture any intoxicating beverage whatever.
(x-1) Contractor is deemed synonymous with the term
"Builder" and, hence, any person who undertakes or purports to have the
capacity to undertake or submits a bid to, or does himself or by or
through others, construct, alter, repair, add to, subtract from,
improve, move, wreck or demolish by building, highway, road, railroad,
excavation or other structure, project, development or improvement, or
to do any part thereof, including the erection of scaffolding or other
structures or works in connection therewith. The term contractor
includes subcontractor and specialty contractor.
A "General Engineering Contractor" is a person whose principal
contracting business is in connection with fixed works requiring
specialized engineering knowledge and skill, including the following
divisions or subject: irrigation, drainage, water power, water supply,
flood control, inland waterways, harbors, docks and wharves, shipyards
and ports, dams, hydroelectric projects, levees, river control and
reclamation works, railroads, highways, streets and roads,
tunnels,rports andrways, waste reduction plants, bridges, overpasses,
underpasses and other similar works, pipelines and other system for the
transmission of petroleum and other liquid or gaseous substances, land
leveling and earth moving projects, excavating, grading, trenching,
paving and surfacing work.
A "General Building Contractor" is a person whose principal contracting
business is in connection with any structure, built, being built, or to
be built, for the support, shelter and enclosure of persons, animals,
chattels or movable property of any kind, requiring in its construction
the use of more than two unrelated building trades or crafts, or to do
or superintend the whole or any part thereof. Such structure includes
sewers and sewerage disposal plants and systems, parks, playgrounds and
other recreational works, refineries, chemical plants, and similar
industrial plants requiring specialized engineering knowledge and
skill, powerhouses, power plants and other utility plants and
installations, mines and metallurgical plants, cement and concrete
works in connection with the above-mentioned fixed works.
A person who merely furnishes materials or supplies without fabricating
them into, or consuming them in the performance of the work of the
general building contractor does not necessarily fall within this
definition.
A "Specialty Contractor" is a person whose operations pertain to the
performance of construction work requiring special skill and whose
principal contracting business involves the use of specialized building
trades or crafts.
(y-1) Dancing School includes any establishment where
ballroom dancing is taught and permitted to the public in consideration
of an enrollment, admission, membership, or any other fees.
(z-1) Distillers of spirits comprises all who distill
spirituous liquors by original and continuous distillation from mash,
wort, wash, sap, or syrup through continuous closed vessels and pipes
until the manufacture thereof is complete.
(a-2) Lending investor includes all persons who make
a practice of lending money for themselves or others at interest.
(b-2) Manufacturers of cigars or cigarettes includes
those whose business it is to make or manufacture cigars or cigarettes
or both for sale or who employ others to make or manufacture cigars or
cigarettes for sale; but the term does not include artisans or
apprentices employed to make cigars or cigarettes from material
supplied by the employer, the latter being lawfully engaged in the
manufacture of cigars or cigarettes.
(c-2) Manufacturer of tobacco includes every person
whose business it is to manufacture tobacco or snuff, or who employs
others to manufacture tobacco or snuff, whether such manufacture be by
cutting, pressing, grinding, or rubbing any raw or leaf tobacco, or
manufactured or partially manufactured tobacco and snuff, or putting up
for consumption scraps, refuse, or stems of tobacco resulting from any
waste by sifting, twisting, screening, or by any other process.
(d-2) Money shop is an extension service unit of a
banking institution usually operating in public markets with authority
to accept money for deposit and extend short-term loans for specific
purposes.
(e-2) Real Estate broker includes any person, other
than a real estate salesman as hereinafter defined, who for another,
and for a compensation or in the expectation or promise of receiving
compensation, (1) sells or offers for sale, buys or offers to buy,
lists, or solicits for prospective purchasers or negotiates the
purchase, sale or exchange of real estate or interests therein; (2) or
negotiates loans or real estate; (3) or leases or offers to lease or
negotiates the sale, purchase or exchange of a lease, or rents or
places for rent or collects rent from real estate or improvements
thereon; (4) or shall be employed by or on behalf of the owner or
owners of lots or other parcels of real estate at a stated salary, on
commission, or otherwise, to sell such real estate or any parts thereof
in lots or parcels. "Real estate salesman" means any natural person
regularly employed by a real estate broker to perform in behalf of such
broker. One act of a character embraced within the above definition
shall constitute the person performing or attempting to perform the
same real estate broker. But the foregoing definitions do not include a
person who shall directly perform any of the acts aforesaid with
reference to his own property, where such acts are performed in the
regular course of or as an incident to the management of such property;
nor shall they apply to persons acting pursuant to a duly executed
power of attorney from the owner authorizing final consumption by
performance of a contract conveying real estate by sale, mortgage or
lease; nor shall they apply to any receiver, trustee or assignee in
bankruptcy or insolvency, or to any person acting in pursuant to the
order of any court; nor to a trustee selling under a deed of trust.
"Real estate dealer" includes any person engaged in the business of
buying, selling, exchanging, leasing, or renting property as principal
and holding himself out as a full or part-time dealer in real estate or
as an owner of rental property or properties rented or offered to rent
for an aggregate amount of one thousand pesos or more a year. Any
person shall be considered as engaged in business as real estate dealer
by the mere fact that he is the owner or sublessor of property rented
or offered to rent for an aggregate amount of one thousand pesos or
more a year: Provided, however, that an owner of sugar lands subject to
tax under Commonwealth Act Numbered Five Hundred and Sixty-Seven shall
not be considered as a real estate dealer under this definition.
(f-2) Rectifier comprises every person who rectifies,
purifies, or refines distilled spirits or wines by any process other
than by original and continuous distillation from mash, wort, wash,
sap, or syrup through continuous closed vessels and pipes until the
manufacture thereof is complete. Every wholesale or retail liquor
dealer who has in his possession any still or mash tub, or who keeps
any other apparatus for the purpose of distilling spirits, or in any
manner refining distilled spirits, shall also be regarded as a
rectifier and as being engaged in the business of rectifying.
(g-2) Repacker of wines or distilled spirits includes
all persons who remove wine or distilled spirits from the original
container for repacking and selling the same at wholesale.
(h-2) Restaurant refers to any place which provides
food to the public and accept orders from them at a price. This term
includes caterers.
(i-2) Retail dealer in fermented liquor includes
every person, except retail dealers in tuba, basi, and tapuy, who for
himself or on commission sells or offers for sale fermented liquors in
quantities of five liters or less at any one time and not for resale.
(j-2) Retail leaf tobacco dealer includes every
person who for himself or on commission sells leaf tobacco or offers
the same for sale to any person except a registered dealer in leaf
tobacco or a manufacturer of cigars, cigarettes, or manufactured
tobacco; but the term does not include a planter or producer so far as
concerns the sale of leaf tobacco of his own production.
(k-2) Retail liquor dealer includes every person,
except a retail vino dealer, who for himself or on commission sells or
offers for sale wine or distilled spirits (other than denatured
alcohol) in quantities of five liters or less at any one time and not
for resale.
(l-2) Retail vino dealer includes every person who
for himself or on commission sells or offers for sale only domestic
distilled spirits in quantities of five liters or less at any one time
and not for resale.
(m-2) Stockbroker includes all persons whose business
it is, for themselves as such brokers or for other brokers, to
negotiate purchases or sales of stock, bonds, exchange, bullion, coined
money; bank notes, promissory notes or other securities; but does not
include underwriters for one or more investment companies as defined in
the Investment Company Act; "Dealer in securities" include all persons
who for their own account are engaged in the sale of stock, bonds,
exchange, bullion, coined money, bank notes, promissory notes, or other
securities.
(n-2) Wholesale dealer in fermented liquor means any
one who for himself or on commission sells or offers for sale fermented
liquors in larger quantities than five liters at any one time, or who
sells or offers for sale such fermented liquors (excluding tuba, basi,
tapuy and similar domestic fermented liquors) for the purpose of
resale, regardless of quantity.
(o-2) Wholesale dealer of distilled spirits and wines
comprehends every person who for himself or on commission sells or
offers for sale wines or distilled spirits in larger quantities than
five liters at any one time, or who sells or offers the same for sale
for the purpose of resale irrespective of quantity.
(p-2) Wholesale tobacco dealer comprehends every
person who for himself or on commission sells or offers for sale
cigars, cigarettes or manufactured tobacco in larger quantities than
two hundred cigars, eight hundred cigarettes or five kilos of
manufactured tobacco at any one time, or who sells or offers the same
for the purpose of resale, regardless of quantity; retail tobacco
dealer comprehends every person who for himself or on commission sells
or offers for sale not more than two hundred cigars, not more than
eight hundred cigarettes, or not more than five kilos of manufactured
tobacco at any one time and not for resale.
Section 2. Section 5 of the Local Tax Code shall read
as follows:cralaw:red
"Sec. 5. Common limitations on the taxing powers of
local government. — The exercise of the taxing powers of provinces,
cities, municipalities and barrios shall not extend to the imposition
of the following:cralaw:red
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"(b) Taxes on forest concessions and forest products
when sold domestically by the concessionaire himself;chanroblesvirtualawlibrary
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"(e) Taxes on the business of transportation
contractors and persons engaged in the transportation of passengers or
freight by hire and common carries byr, land or water except as
otherwise provided in this Code, and taxes or fees for the registration
of motor vehicles and for the issuance of all kinds of licenses or
permits for the driving thereof;chanroblesvirtualawlibrary
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"(g) Taxes of any kind on banks and insurance
companies except as otherwise provided in this Code;chanroblesvirtualawlibrary
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"(k) Taxes or fees on agricultural products when sold
by the farmer, fisherman, poultry-or animal-raiser himself;chanroblesvirtualawlibrary
"(l) Percentage tax on sales";chanroblesvirtualawlibrary
(m) Taxes on mines; mining operations; and minerals,
mineral products, and their by-products when sold domestically by the
operator;chanroblesvirtualawlibrary
(n) Taxes on cooperatives duly organized and
registered with the proper government office; and
(o) Taxes of any kind on the national and local
governments.
Section 3. Section 7 of the Local Tax Code shall read
as follows:cralaw:red
"Sec. 7. Tax on transfer of real property, ownership.
— The province may impose a tax on the sale, donation, barter or any
other mode of transferring ownership or title, of real property at the
rate of not exceeding one-fourth of one per cent of the total
consideration involved in the acquisition of the property or of its
assessed value, whichever is higher, or in the absence of a specific
consideration, the assessed value of the property.
"The transfer of real property ownership pursuant to Republic Act No.
3844, as amended, shall be exempt from this tax.
"The Register of Deeds of the province concerned shall, before
registering any deed, require the presentation of the evidence of
payment of this tax. In appropriate cases, the Provincial Assessor
shall also make the same requirement before cancelling an old tax
declaration and issuing a new one in place thereof. Notaries public
shall furnish the Provincial Treasurer within thirty days from the date
of notarization before him of any deed transferring ownership or title
to any real property with a copy of such deed.
"Real property, for purposes of this Tax, refers only to lands,
buildings, and machineries intended by the owner of the land or
building for an industry or work which may be carried on in a building
or on a piece of land and which tend directly to meet the needs of the
said industry or works. Buildings refer to all kinds of structure more
or less permanently attached to a piece of land, excluding those which
are merely superimposed on the soil."
It shall be the duty of the buyer, donee, transferee or heir to pay the
tax herein imposed within one year from the date of the execution of
the deed as regards the sale, barter, donation or any other mode of
transferring ownership, or from the date of the decedent's death in the
case of transfer by succession.
Section 4. Section 10 of the Local Tax Code shall
read as follows:cralaw:red
"Sec. 10. Sand and gravel tax. — The province may
levy and collect a tax of not exceeding seventy-five centavos per cubic
meter of ordinary stones, sand, gravel, earth and other materials
extracted from public and private lands of the government or from the
beds of seas, lakes, rivers, streams, creeks and other public waters
within the jurisdiction of the province." The municipality where the
materials are extracted shall share in the proceeds of the tax herein
authorized at a rate of not less than thirty percent thereof as may be
determined by the Provincial Board.
The permit to extract the materials shall be issued by the Director of
Mines or his duly authorized representative and the extraction thereof
shall be governed by regulations issued by the Director of Mines."
Section 5. The last paragraph of Section 13 of the
Local Tax Code shall read as follows:cralaw:red
"Sec. 13. Amusement tax on admission. —..
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"The taxes hereinabove imposed shall be due and payable within the
first twenty days of the month next following that for which they are
due, by the proprietor, lessee, or operator concerned, and such taxes
to be the basis of a true and complete return of the amount of gross
receipts derived during the preceding month. If the tax is not paid
within the time fixed hereinabove, the taxpayer shall be subject to
such surcharges, interests and penalties prescribed by this Code. In
case of willful neglect to file the return and pay the tax within the
time required or in case fraudulent return is filed or a false return
is wilfully made, the taxpayer shall be subject to a surcharge of fifty
per cent of the correct amount of the tax due in addition to the
interest and penalties provided by this Code."
Section 6. There is hereby added to the last
paragraph of Section 14 of the Local Tax Code the following provisions:cralaw:red
"Sec. 14. Fees for sealing and licensing of weights
and measures. — The province shall levy fees for the sealing and
licensing of weights and measures in accordance with the following
schedule:cralaw:red
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"The provincial board shall prescribe the necessary regulations for the
use of such weights and measures." It shall also fix the penalties for
fraudulent practices and unlawful possession or use of instruments of
weights and measures, provided that the penalties thereon do not exceed
those prescribed in Chapter VI, Title VIII, of the National Internal
Revenue Code, as amended. The provincial board may, by ordinance,
authorize the provincial treasurer to settle an offense not involving
the commission of fraud before a case therefor is filed in court upon
payment of a compromise penalty of not less than two hundred pesos nor
more than five hundred pesos.
Section 7. A new Section to be known as Section 15-A
is hereby inserted after Section 15 of the Local Tax Code to read as
follows:cralaw:red
"Sec. 15-A. Annual fixed tax per delivery truck or
van of manufacturers or producers of, or dealers in, certain products.
— Manufacturers or producers of, or dealers in, distilled
spirits, fermented liquors, soft drinks, cigars, and cigarettes,
delivering or distributing their products to sales outlets, or selling
to consumers, whether directly or indirectly, within the province shall
be subject to an annual fixed tax of not exceeding seventy-five pesos
per delivery truck or van payable to the province.
Manufacturers or producers of, or dealers in, products other than
distilled spirits, fermented liquors, soft drinks, cigars, and
cigarettes, delivering or distributing their products to sales outlets,
or selling to consumers, whether directly or indirectly, within the
province shall be subject to an annual fixed tax of not exceeding fifty
pesos per delivery truck or van payable to the province.
The manufacturers, producers and dealers referred to in the foregoing
paragraphs shall be exempt from the tax on peddlers prescribed in
Section 15 of this Code and from any municipal permit fee or other
regulatory fees. The province, however, may still levy and collect from
said manufacturers, producers, and dealers a permit fee in accordance
with Section 36 of this Code, which in no case shall exceed twenty
pesos per annum regardless of the number of vehicles used by the
business within the province."
Section 8. Paragraph (e) of Section 17 of the Local
Tax Code is hereby amended to read as follows:cralaw:red
"Sec. 17. Specific limitations on power. — Except as
otherwise provided in this Code, the province shall not levy the
following:cralaw:red
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"(e) Municipal fees and charges under Section 20 of
this Code, except those enumerated under numbers 1, 2, 3, 4, 7 and 8 of
paragraph (g) thereof.
Section 9. Paragraphs (a), (b), (c), (d), (e), (g),
(h), (m), (n), (o), and (q) of Section 19 of the Code are hereby
modified to read as follows:cralaw:red
"Sec. 19. Tax on business. — The municipality may
impose taxes on businesses, except on those for which fixed taxes are
provided in this Code:cralaw:red
"(a) On manufacturers, importers, or producers of any
article of commerce of whatever kind or nature, including brewers,
distillers, rectifiers, repackers, and compounders of liquors,
distilled spirits and/or wines in accordance with the following
schedule:cralaw:red
With gross sales for the preceding Amount of Tax
calendar year in the amount of: per annum
Less than P10,000.00 P150.00
10,000.00 or more but less than
P15,000.00 200.00
15,000.00 or more but less than
20,000.00 275.00
20,000.00 or more but less than
30,000.00 400.00
30,000.00 or more but less than
40,000.00 600.00
40,000.00 or more but less than
50,000.00 750.00
50,000.00 or more but less than
75,000.00 1,200.00
75,000.00 or more but less than
100,000.00 1,500.00
100,000.00 or more but less than
150,000.00 2,000.00
150,000.00 or more but less than
200,000.00 2,500.00
200,000.00 or more but less than
P300,000.00 3,500.00
300,000.00 or more but less than
500,000.00 5,000.00
500,000.00 or more but less than
750,000.00 7,500.00
750,000.00 or more but less than
1,000,000.00 10,000.00
1,000,000.00 or more but less than
2,000,000.00 12,500.00
2,000,000.00 or more but less than
3,000,000.00 15,000.00
3,000,000.00 or more but less than
4,000,000.00 18,000.00
4,000,000.00 or more but less than
5,000,000.00 21,000.00
5,000,000.00 or more but less than
7,000,000.00 24,000.00
7,000,000.00 or more but less than
9,000,000.00 27,000.00
9,000,000.00 or more but less than
12,000,000.00 30,000.00
12,000,000.00 or more but less
than 15,000,000.00 33,000.00
15,000,000.00 or more but less
than 18,000,000.00 36,000.00
18,000,000.00 or more but less
than 20,000,000.00 40,000.00
For every P500,000.00 in excess of
P20,000,000.00 but not more than
P50,000,000.00 P500.00
For every P500,00.00 in excess of
P50,000,000.00 P250.00
(A-1) On Retailers, Independent Wholesalers and
Distributors in Accordance With The Following
Schedules:cralaw:red
With gross sales for the preceding Amount of tax
calendar year in the amount of: per annum
Less than P1,000.00 P15.00
P1,000.00 or more but less than
P2,000.00 30.00
2,000.00 or more but less than
3,000.00 45.00
3,000.00 or more but less than
4,000.00 65.00
4,000.00 or more but less than
5,000.00 90.00
5,000.00 or more but less than
6,000.00 110.00
6,000.00 or more but less than
7,000.00 130.00
7,000.00 or more but less than
8,000.00 150.00
8,000.00 or more but less than
10,000.00 170.00
10,000.00 or more but less than
15,000.00 200.00
15,000.00 or more but less than
20,000.00 250.00
20,000.00 or more but less than
30,000.00 300.00
30,000.00 or more but less than
40,000.00 400.00
40,000.00 or more but less than
50,000.00 600.00
50,000.00 or more but less than
75,000.00 900.00
75,000.00 or more but less than
100,000.00 1,200.00
100,000.00 or more but less than
150,000.00 1,700.00
150,000.00 or more but less than
200,000.00 2,200.00
200,000.00 or more but less than
300,000.00 3,000.00
300,000.00 or more but less than
500,000.00 3,000.00
500,000.00 or more but less than
750,000.00 4,000.00
750,000.00 or more but less than
1,000,000.00 6,000.00
For every excess P100,000.00 in excess of P1 million — 100.00
As used herein, the term Independent Wholesaler means a person, other
than a manufacturer, producer or importer, who buys commodities for
resale to persons other than the end-users regardless of the quantity
of the transaction.
(A-2) On All Exporters in Accordance with the
Following Schedule:cralaw:red
With gross sales for the preceding Amount of Tax
calendar year in the amount of: per annum
Below P1 million
P1 M or more but less than P5
M P1,000.00
P5 M or more but less than P10
M 2,000.00
P10 M or more but less than P20
M 3,000.00
P20 M or more but less than P30
M 5,000.00
P30 M or more but less than P50
M 7,000.00
P50 M or more but less than P75
M 10,000.00
P75 M or more but less than P100
M 15,000.00
20,000.00
For every P1M over P100 M P200.00
(A-3) Tax Ceilings. — The imposition of the graduated
fixed taxes prescribed in paragraphs A, A-1 and A-2 above shall not
exceed the ceilings prescribed hereunder:cralaw:red
Class of Municipalities
1st & 2nd 3rd &
4th 5th class &
class class below
Initial Years of
Implementation Up
To December 31, 1975, 70% of the
55% of the 40% of the
maximum maximum
maximum
Third and Fourth
Calendar Years 85% of the 70% of
the 55% of the
maximum maximum
maximum
Fifth Calendar Years
and Thereafter. 100% of the 85% of
the 70% of the
maximum maximum
maximum
(A-4) Essential commodities. — The tax on the
business of manufacturing, producing, importing, exporting,
wholesaling, or retailing of the essential commodities enumerated
hereunder shall be one-half of the rates that may be prescribed by the
local boards or councils under paragraphs A, A-1, and A-2 in relation
with paragraph A-3 above for other businesses:cralaw:red
(1) Wheat flour, meat, milk, dairy products,
locally-manufactured canned goods and other preserved foodstuffs,
sugar, salt and other agricultural, marine and fresh-water products;chanroblesvirtualawlibrary
(2) Cooking oil, cooking gas, and firewood;chanroblesvirtualawlibrary
(3) Laundry soap, medicine and household remedies;chanroblesvirtualawlibrary
(4) Locally-manufactured ordinary fabrics;chanroblesvirtualawlibrary
(5) Agricultural implements, fertilizers, and
insecticides;chanroblesvirtualawlibrary
(6) Poultry feeds and other animal feeds; and
(7) Other commodities covered by the Price Control
Law, provided, however, that should any commodity mentioned above be no
longer subject to price control the same shall be taxable at the price
control, the same shall be taxable at the rates prescribed in
paragraphs A, A-1 A-2 in relation with paragraph A-3 above.
(A-5) Rice and Corn. — The tax on the business of
importing, wholesaling, or retailing of, or dealing in, rice and corn,
including rice and corn millers also engaged in the wholesaling or
retailing of said cereals, shall be one-fourth of the maximum rates
prescribed under paragraph A-1 above and shall be uniform for all
classes of municipalities as an exception to paragraph A-3 above.
(A-6) Situs of the tax. — For purposes of collection
of this tax, manufacturers and producers maintaining or operating
branch or sales offices elsewhere shall record the tax thereon shall
accrue to the local government where there is no branch or sales office
is located. In cases where there is no such branch or sales office in
the locality where the sale is effected, the sale shall be duly
recorded in the principal office along with the sales made in said
principal office. Sixty per cent of all sales recorded in the principal
office shall be taxable by the local government where the principal
office is located, while remaining forty per cent shall be deemed as
sales made in the factory and shall be taxable by the local government
where the factory is located.
In case where a manufacturer or producer has two or more factories
situated in different localities, the forty per cent sales allocation
mentioned in the next preceding paragraph shall be pro-rated among the
localities where the factories are situated in proportion to their
respective volumes of production during the period for which the tax is
due.
The foregoing sales allocation shall be applied irrespective of whether
or not sales are made in the locality where the factory is situated.
"(b) On cafes, cafeterias, ice cream and other
refreshment parlors, restaurants, soda fountain bars, carinderias or
food caterers:cralaw:red
"With gross sales and/or receipts Amount of tax
for the preceding calendar year per annum
in the amount of :cralaw:red
"x x x"
"(c) On all business establishments principally
rendering or offering to render services,.;chanroblesvirtualawlibrary
Shops for planning or surfacing and recutting of lumber and sawmills
under contract to saw or cut logs belonging to others; dying
establishments; milliners and hatter; blacksmiths; slendering and body
building saloons; furniture repair shops; shoe repair shops; house
and/or sign painter;chanroblesvirtualawlibrary
Business agents and other independent contractors (judicial or natural)
not included among individuals subject to the occupation tax under
Section 12 of this Code, and whose activity consists essentially of the
sale of all kinds of services for a fee;chanroblesvirtualawlibrary
General engineering, general building, and specialty contractor,
filling, demolition and salvage work contractors and proprietors or
operators of bulldozers consideration; persons engaged in the
installation of water system, and gas or electric light heat or power;
proprietors or operators of smelting plants, engraving plants and
plating establishments;chanroblesvirtualawlibrary
Stevedoring; arrastre services;chanroblesvirtualawlibrary
Commercial and immigration brokers; and cinematographic film owners,
lessors or distributors;chanroblesvirtualawlibrary
"With gross receipts for the Amount of tax
preceding calendar year in per annum
the amount of:cralaw:red
"Less than P5,000.00 P25.00
P5,000.00 or more but less than
P10,000.00 56.00
10,000.00 or more but less than
15,000.00 95.00
15,000.00 or more but less than
20,000.00 150.00
20,000.00 or more but less than
30,000.00 250.00
30,000.00 or more but less than
40,000.00 350.00
40,000.00 or more but less than
50,000.00 500.00
50,000.00 or more but less than
75,000.00 800.00
75,000.00 or more but less than
100,000.00 1,200.00
100,000.00 or more but less than
150,000.00 1,800.00
150,000.00 or more but less than
200,000.00 2,400.00
200,000.00 or more but less than
250,000.00 3,300.00
250,000.00 or more but less than
300,000.00 4,200.00
300,000.00 or more but less than
400,000.00 5,600.00
400,000.00 or more but less than
500,000.00 7,500.00
For every P10,000.00 in excess of
P500,000.00 50.00
(C-1) Should a contractor undertake to furnish the
materials and labor in the construction work, the costs of such
materials and labor shall be deducted from his gross receipts for the
purpose of determining the tax due from him under paragraph (C) above.
General Provision. —
In the case of a newly started business falling under paragraphs A,
A-1, A-2, B or C provided hereinabove, the tax shall be fixed by the
quarter. The initial tax for the quarter in which the business starts
to operate shall not exceed one-fourth of one-tenth of one per cent of
the capital investment. However, in the succeeding quarter or quarters,
in case the business opens before the last quarter of the year, the tax
shall be based on the gross sales for the preceding quarter of
one-fourth of the rate fixed therefor by the pertinent schedule as may
be applied in relation with paragraphs A-3, A-4 and A-5 above. In the
succeeding calendar year, regardless of when the business started to
operate, the tax shall be based on the gross sales for the preceding
calendar year, or any fraction thereof, as provided by the same
schedule.
In cases where a person conducts or operates two or more of the related
businesses mentioned in any one of said paragraphs A, A-1, A-2, B or C,
which are subject to the same rate of imposition, the computation of
the tax shall be base on the combined total gross sales of the said two
or more related businesses.
In cases where a person operates any of the businesses mentioned in any
one of paragraphs A, A-1, A-2, B or C above together with any of the
businesses for which fixed taxes are provided in this code, the sales
or receipts of the latter shall not be included in the sales or
receipts of the former for the purpose of computing the taxes due under
said paragraphs.
A business subject to the graduated fixed tax base on gross sales
and/or receipts shall, upon termination thereof, submit a sworn
statement of its gross sales and/or receipts for the current year. If
the tax paid during the year be less than the tax due on said current
year gross sales and/or receipts, the difference shall be paid before
the business is considered officially retired.
Special Provisions
Tax Credit. — In case where the tax imposed on any business exceeded
70% of the maximum rate prescribed therefore under Section 19(A) as
originally provided in this Code, tax credit shall be granted to the
taxpayer who has paid at least the full amount of the first quarter
installment for the calendar year 1974. The tax credit herein granted
shall be applied to future business tax obligation of the same taxpayer
in not more than four equal quarterly installments as may be
judiciously determined by the Secretary of Finance who shall, for this
purpose, prepare and publish an appropriate schedule therefor upon
promulgation of this decree.
In no case, however, shall tax credit be given to a taxpayer if the
amount of the annual or quarterly tax paid by him during the first
quarter of calendar year 1974 is equal to, or less than, the annual tax
or the highest quarterly tax, as the case may be, paid by him for the
same business in calendar year 1973.
Any remaining portion of the tax credit herein granted shall be
forfeited in favor of the municipality in the event the business
terminates operation within the locality. As soon as the total amount
credited to the taxpayer pursuant hereto shall have been fully applied,
this provision shall no longer apply.
For purposes hereof, the taxpayer shall file with the local treasurer a
claim in writing duly supported by evidence of payment on or before
June 30, 1974, after which date no claim for tax credit shall be
entertained.
(d) On the business of dealers in fermented liquors,
distilled spirits and/or wines:cralaw:red
Amounts of tax
per annum
(1) Wholesale dealer in foreign
liquors P800.00
(2) Wholesale dealers in domestic
liquors 400.00
(3) Retail dealers in foreign
liquors 200.00
(4) Retail dealers in domestic
liquors 100.00
(5) Retail dealers in vino liquors
50.00
(6) Retail dealers in fermented
liquors 80.00
(7) Wholesale dealers in fermented
liquors 200.00
(8) Retail dealers in tuba, basi and/or
tapuy 50.00
(e) Tax on tobacco dealers:
(1) Retail leaf tobacco
dealer 50.00
(2) Wholesale leaf tobacco
dealers 200.00
(3) Retail tobacco
dealers 50.00
(4) Wholesale tobacco
dealers 200.00
xxx
xxx
xxx
"(f) ."
"(g) On the amusement places wherein the customers
thereof actively participate without making bets or wagers, including
but not limited to, the following:cralaw:red
xxx
xxx
xxx
"(12) Theaters and cinema houses:cralaw:red
xxx
xxx
xxx
With balcony and orchestra with seating
capacity of less than 500 persons
600.00
xxx
xxx
xxx
Plus: Amusement tax of P0.05 per
admission payable to the municipal
treasurer within twenty days next
following the month for which the
tax is due as regards operators with
fixed establishment and within ten
days next following business day
with respect to itinerant operators.
"(h) Tax on pawnshops, money shops, lending
investors, finance and investment companies, insurance companies, and
banks, any provision of special laws to the contrary notwithstanding,
except the Central Bank of the Philippines:cralaw:red
(1) Pawnshops Amount of tax
per annum
With capital of -
Less than P50,000.00 P1,000.00
P50,000.00 or more but less
than
P100,000.00 1,500.00
P100,000.00 or more but less
than
P200,000.00 2,000.00
P200,000.00 or more 4,000.00
(2) Money shops 200.00
(3) Lending Investors 300.00
(4) Finance and invest companies:
Principal office 2,000.00
For each branch, payable to the
municipality where the branch is
located 400.00
(5) Insurance companies:
Principal office 3,000.00
For each branch, payable to the
municipality where the branch is
located 600.00
(6) Commercial banks:
Principal office 5,000.00
For each branch, payable to the
municipality where the branch is
located 1,000.00
Savings Banks:
(7) Principal office 2,000.00
For each branch, payable to the
municipality where the branch is
located 400.00
(8) Rural Banks 600.00
"(i) .
"(j) .
"(k) .
"(l) .
"(m) On real estate dealers:cralaw:red
xxx
xxx
xxx
"(2) Lessors of real estate based
on gross receipts for the preceding
year, at rates not exceeding the
following:cralaw:red
Less than P1,000.00 PExempt
xxx
xxx
xxx
For every P1,000.00 in excess of
P50,000.00 for real property used
for purposes other than
residential 5.00
For every P5,000.00 in excess of
P50,000.00 for real property used
for residential purposes 5.00
"(n) On golf links P3,000.00 per annum
"(o) On fishponds, fishpens, or fish breeding
grounds, per hectare or fraction thereof, P10.00 per annum
"(p) .
"(q) Taxes on billboards, signboards and
advertisement:cralaw:red
xxx
xxx
xxx
In addition to the taxes provided above under items (1) to (5),
inclusive, for the use of electric or neon lights in billboards per
square meter or portion thereof — P10.00
xxx
xxx
xxx
Section 10. There are hereby inserted new paragraphs
after paragraph (q) of Section 19 of the Code to be known as paragraphs
(r) and (s) which shall read as follows:cralaw:red
(r) Tax on the business of operating privately-owned
public markets based on gross receipts for the preceding quarter at the
following rates:cralaw:red
Gross quarterly receipt Amount of Tax
per quarter
Less than P5,000.00 P125.00
P5,000.00 or more but less
than P10,000.00 250.00
10,000.00
" "
" "
" 20,000.00 500.00
20,000.00
" "
" "
" 30,000.00 750.00
30,000.00
" "
" "
" 40,000.00 1,000.00
40,000.00
" "
" "
" 50,000.00 1,250.00
50,000.00
" "
" "
" P60,000.00 1,500.00
60,000.00
" "
" "
" 70,000.00 1,750.00
70,000.00
" "
" "
" 80,000.00 2,000.00
80,000.00
" "
" "
" 90,000.00 2,250.00
90,000.00
" "
" "
" 100,000.00 2,500.00
For every P1,00.00 in excess of P100,000.00 20.00
In the case of newly-started privately-owned public market, the tax
shall not be less than the minimum of P125.00 prescribed above for the
initial quarter of operations.
(s) Operators or owners of rice or corn mills engaged
mainly in the milling of rice and corn belonging to other persons shall
be subject to annual graduated fixed tax based upon total capacity per
machine in accordance with the following schedule:cralaw:red
Corn mill, not exceeding one
hundred cavans per twelve hour
capacity P15.00
Corn mill, exceeding one
hundred cavans per twelve hour
capacity 22.50
"Kiskisan" type, not exceeding one
hundred cavans of palay per twelve
hour capacity 25.00
"Kiskisan" type, exceeding one
hundred cavans of palay per
twelve hour capacity 37.50
"Cono" of not exceeding one
hundred cavans of palay per
twelve hour capacity 100.00
"Cono" of not exceeding two
hundred cavans of palay per
twelve hour capacity 200.00
"Cono" of not exceeding three
hundred cavans of palay per
twelve hour capacity 300.00
"Cono" of not exceeding four
hundred cavans of palay per
twelve hour capacity 450.00
"Cono" of not exceeding five
hundred cavans of palay per
twelve hour capacity 650.00
"Cono" of not exceeding six
hundred cavans of palay per
twelve hour capacity 900.00
"Cono" of not exceeding seven
hundred cavans of palay per
twelve hour capacity 1,250.00
"Cono" of not exceeding eight
hundred cavans of palay per
twelve hour capacity 1,600.00
"Cono" of not exceeding nine
hundred cavans of palay per
twelve hour capacity 2,000.00
"Cono" of not exceeding one
thousand cavans of palay per
twelve hour capacity 2,400.00
"Cono" of over one thousand
cavans of palay per twelve
hour capacity 2,800.00
Section 11. Paragraph (c) of Section 21 of the Code
shall read as follows:cralaw:red
"Sec. 21. Fishery rentals or fees. —..
xxx
xxx
xxx
"(c) Issuance of individual licenses in case no
bidders opt to lease fishing zones. —.
"(1) Fish corrals erected in the sea:cralaw:red
Annual Fee
Less than 3 meters deep P30.00
3 meters deep or more but less
than 5 meters deep 60.00
5 meters deep or more but less
than 8 meters deep 200.00
8 meters deep or more but less
than 10 meters deep 360.00
10 meters deep or more but less
than 15 meters deep 500.00
15 meters deep or more 800.00
xxx
xxx
xxx
(4) Fish corrals or fishpens in inland fresh waters:cralaw:red
With an area of less than 500
square meters P100.00
With an area of 500 square meters
or more but less than
1,000 square meters 200.00
With an area of 1,000 square
meters or more but less than
5,000 square meters 360.00
With an area of 5,000 square
meters or more but less than
10,000 square meters 500.00
With an area of 10,000 square
meters or more: 800.00
Section 12. Section 23 of the Code shall read as
follows:cralaw:red
"Sec. 23. Scope of power. — Except as otherwise
provided in this Code, the city may levy and collect, among others, any
of the taxes, fees and other impositions that the province or the
municipality may levy and collect. The exercise of the taxing powers of
the city extends to the taxes, fees and other impositions mentioned in
Sections 12, 13, 14, 15; 15-A, and 16 of this Code which the city shall
also impose and collect, to the exclusion of the national and municipal
governments."
"The rates of the taxes, fees or other impositions that the city shall
fix may exceed the maximum rates allowed for the province or
municipality by not more than fifty per cent, except the rates of the
taxes and fees provided in Sections 12, 13, 14, 15-A, and 19(A-5) in
Chapter II of this Code which shall be uniform for the city and the
province or municipality, as the case may be.
Tax ceilings. — The imposition of the graduated fixed taxes provided
for under paragraphs A, A-1, A-2 and A-4, all of Section 19 of the Code
as herein amended, as read in relation with this section, shall not
exceed the ceilings prescribed hereunder:cralaw:red
Class of City
1st-A, 1st, 2nd & 4th Class
&
3rd class Below
Initial years of
Implementation up
to December 31, 1975. -70% of the
-55% of the
maximum maximum
Third and fourth
calendar year, 85% of the 70% of the
maximum maximum
Fifth calendar year
and thereafter, -100% of the -85%
of the
maximum maximum
(b) Situs of the Tax. — For purposes of collection of
the tax on the businesses mentioned in paragraphs A, A-1, A-2, A-4, and
A-5, all of Section 19 of the Code as herein amended, as read in
relation with this section, the provisions of paragraph A-6 of this
Code also as herein amended shall apply.
The general provisions under Section 19 of this Code as herein amended
pertaining to newly-started businesses; related businesses falling
under paragraphs A, A-1, A-2, B or C of Section 19 aforementioned;
those subject to the graduated rates operated along with businesses
subject to fixed rates; and those terminating their operations during
the current year, as well as the special provisions for tax credits,
shall likewise apply to chartered cities. However, in the case of a
newly-started business, the city may exceed by not more than fifty per
cent the maximum rate prescribed for newly-started businesses under
Section 19 of this Code as amended.
Thirty per cent of the percentage taxes on sales pertaining to the
first quarter of the calendar year 1974 that may have been collected by
cities under Section 23 of the Code as originally provided, if they
have imposed the maximum of one and two per cent of the sales of
essential and non-essential commodities, respectively, shall be granted
as tax credits to the taxpayers concerned. In the application of the
said tax credits to the future business tax obligations of the same
taxpayers, all the special provisions under Section 19 of the Code as
herein amended shall also govern.
Section 13. Section 24 of the Code shall read as
follows:cralaw:red
"Sec. 24. Additional taxing powers. — The city may
levy any tax, fee or other imposition not specifically enumerated or
otherwise provided for in this Code, subject to the provisions of
Section 49 and 50 of this Code as herein amended.
Section 14. Section 25 of the Code shall read as
follows:cralaw:red
"Sec. 25. Specific limitations on power. — Except as
otherwise provided in this Code, the city shall not levy the taxes and
other impositions enumerated in Section 5, Chapter I of this Code as
herein amended.
Section 15. Paragraph (a) of Section 27 of the Code
shall read as follows:cralaw:red
"Sec. 27. Taxes and Fees. —.
"(a) Stores or retailers with fixed business
establishments whose capital investment is five thousand pesos or less,
signs, signboards, and billboards displayed or maintained in any place
exposed to public view, except those displayed at the place where the
profession or business advertised is conducted: and
"(b) .."
Section 16. Paragraph (d) of Section 30 of the Code
shall read as follows:cralaw:red
"Sec. 30. Market fees. —.
"(d) Market entrance fee. — In lieu of the regular
market fees based on the space occupied, a market entrance fee may be
imposed on all transient vendors of any commodity or merchandise being
brought into the public market for sale on the basis of weight, bundle,
sack, can, cartload, or any other convenient unit of measure. The
amount of entrance fee to be imposed shall not exceed the amount of
market fee that would be collectible if the fee were charged on the
basis of space occupied by the said commodity or merchandise, as
provided in the preceding subsection."
Section 17. Paragraph (a) and (d) of Section 31 of
the Code shall read as follows:cralaw:red
"Sec. 31. Slaughterhouse fees. —.
"(a) Permit fee to slaughter. — Before any animal is
slaughtered for public consumption, a permit therefor shall be secured
from the health officer concerned or his duly authorized representative
thru the treasurer and the corresponding fee collected at a reasonable
rate to be fixed by the local board or council.
xxx
xxx
xxx
"(d) Requirements for the issuance of a permit for
the slaughter of large cattle. — Upon issuance of the permit required
in subsection (c) of this section, large cattle shall be slaughtered at
the city/municipal slaughterhouse or in any other place as may be
authorized in the local ordinance. Before the issuance of the permit
for the slaughter of large cattle, the treasurer shall require for
branded cattle the production of the certificate of ownership if the
owner is the applicant, or the original certificate of ownership and
certificate of transfer showing title in the name of the person
applying for the permit if he is not the original owner..
Section 18. Section 42 of the Code shall read as
follows:cralaw:red
"Sec. 42. Effectivity of tax ordinance. — a tax
ordinance shall go into effect on the fifteenth day after its approval
by the local chief executive in accordance with Section 41 of this
Code.
Section 19. Section 49 of the Code is amended to read
as follows:cralaw:red
"Sec. 49. Similar tax or fee not specifically
enumerated. — The local board or council may exercise the power to
impose a tax or fee on a tax base or subject similar to those
authorized in this Code but which may not have been specifically
enumerated herein, the rate of which shall in no case exceed that fixed
for the similar tax base or subject. No ordinance, however, imposing
such a tax or fee shall be enacted without any public hearing having
been held for the purpose. The Secretary of Finance shall within six
months from the date of receipt of copy of the ordinance review the
same and the tax or fee therein imposed shall accrue, should the
ordinance be approved by the Secretary of Finance, at such date as may
be determined and fixed by him.
Section 20. Section 50 of the Code shall read as
follows:cralaw:red
"Sec. 50. Tax or fee not provided for. — Where the
tax base or tax subject is not similar or comparable to any tax base or
subject specifically mentioned or otherwise provided for in this Code,
the local board or council may impose a tax, fee or other imposition
thereon. No ordinance, however, imposing such a tax or fee shall be
enacted without any public hearing having been held for the purpose.
The Secretary of Finance shall within six months from the date of
receipt of copy of the ordinance review the same and the tax or fee
therein imposed shall accrue, should the ordinance be approved by the
Secretary of Finance, at such date as may be determined and fixed by
him.
Section 21. Section 54 of the Code shall read as
follows:cralaw:red
"Sec. 54. Accrual of the tax. — All local taxes shall
accrue on the first day of January of each year as regards subjects
then liable therefor, but an entirely new tax, or any change in the
rate of an existing tax, provided by an ordinance enacted during the
current year shall accrue at the beginning of the quarter next
following the date of effectivity of the ordinance as provided in
Section 42 of this Code."
Section 22. Section 59 of the Code shall read as
follows:cralaw:red
"Sec. 59. Examination of books of accounts and
pertinent records of businessmen by provincial or city treasurer. —.. Such examination shall be made during regular business hours, not
oftener than once every year for each business establishment..
xxx
xxx
xxx
For this purpose, the forms to be used by the provincial or city
treasurer or his duly-authorized deputy shall be prescribed by the
Secretary of Finance.
Section 23. For the proper implementation of the
provisions of the Local Tax Code as herein amended, special transitory
provisions are hereby promulgated to read as follows:cralaw:red
Sec. 64-A. Special transitory provisions. In view of
the adjustment of the tax rates under paragraphs A, A-1 and A-2 and the
provisions of paragraph A-3, all of Section 19 of the Code as herein
amended, the taxes, including the percentage taxes, that shall be
collectible by municipalities and cities for the quarter beginning
April 1, 1874 from the businesses covered by Section 19(A) as
originally provided in this Code shall be as what may be judiciously
determined and fixed in an appropriate circular by the Secretary of
Finance, unless the local tax ordinance in force has fixed a lower
rate, in which case the lower rate shall prevail and be collectible.
For this purpose, all existing tax ordinances of cities and
municipalities imposing taxes on the businesses herein mentioned at
rates higher than what may be fixed therefor by the Secretary of
Finance as herein provided are hereby extended up to June 30, 1974 by
the Secretary of Finance, pursuant to the provisions of Section 64 of
the Code, shall not be affected and shall continue to be enforceable
until June 30, 1974.
The taxes hereinabove treated corresponding to the quarter beginning
April 1, 1974 shall be paid not later than May 31, 1974 as an exception
to the provisions of Section 55 of the Code.
All existing tax ordinances of provinces, cities, municipalities and
barrios shall be deemed ipso facto nullified on June 30, 1974.
The Local Boards or councils shall upon promulgation of this decree
enact their respective tax ordinances pursuant to the provisions of the
Local Tax Code as herein amended, to take effect not earlier than July
1, 1974 in conformity with the pertinent general administration
provisions under Chapter III thereof.
Section 24. Effectivity. — This Decree shall take
effect upon its approval.
All laws, acts, decrees, executive orders, proclamations and/or
administrative regulations, or part or parts thereof which are
inconsistent herewith are hereby repealed and/or modified accordingly.
Done in the City of Manila,
this 30th day of March, in the year of Our Lord, nineteen hundred and
seventy-four.
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