,

Republic oJ the Pt\llippmes .."~

IJaIL
P

>
HOIIN! OrRepreMntaUves
Quezon City .'
>.'''P''f .."
Seventeenth Con~SI!i
Fi"'t Regular Sellsion

HOUSE BILL NO.

4774

InlJ'Oduc:ed by Representative Oaldla carlo E. Cu.

"Tunar pagbebago" or reaJ po$lUVC change is the promise and

lUI
commitment of Presidt"J11 Rodngo Dulerte lO Ihe Filipino people. nUl
mcludes, among others, mon: lnch,lluve growth manifellted by a comCorte.ble
lite for aU, improved public service!, more and better Jobs, lind more money
in the people'. pockets; and safe, healthy, and peaceful commuOIties.

All lhes@can SIgIlificanlly reduce poverty Incidence from 21.6 to 14 percent

by 2022, Of Itrtmg !lOme sue million Filipinos out of poverty, and achieving
upper middle income country IItalUII by 2022. Sustaming real positiw
change for one generation can eradicate extn:mc poverty and allow our
country to join the rank!! of advanced nations by 2040. Thi. 18 a dream that
aU Filipinos share and a"'plrc (or.

To reah%e tlleac BsplratiOns, the Dutertc Admmultnllion recognizes !.he need

to sustain high growth of at least seven percent every year for one
generation, 8hlft the $Duree o f growth from consumption \0 investment, and
heaVily mvest in our people through improved social 8e1'VlOe1, such as public
heal!.h and education systems, and 10 better mfrasU"Ucture to improve
connectivity and I"llIJIe productivity. These neSSiU)' mvestments reqUlI'C an
additional one triUion pe_ annually over !.he Iong-Ienn, of which some 400
biUion pel108 12% of OD!') II targeted by 2019. To sustamably finance thue
inve8tmcnts, a Tax Reform for Acce.lcralion and InclUSion is propollC'd.

The TtlX Refonn for Acceleration and InclUSlOn enViSions 10 create a tax
system that i, simpler, rain:r, and more effICient, eharaelerU:cd by low rate'
and a broad bose that promotes mvestment. job creation and poverty
reduction. This will be complemented by major tax admllusl.nmon refonnl
in bo!.h !.he Bureau of Internal Revenue and Bureau of Customs. In addU.lon
,

to tax policy and adminialr8.uon reforms, budget fdonn. are being pursued
10 promote .~nding lTIlnapare.ncy and efficiency.

The LaX reform program consists of severol packages, wllh each package
balancmg tntde-orr. (e.g., lowering of some tax rates whUe broodemng the
bue of other taxes) and helpin, to ensure umely enactment. The first
paclwgo!:, whic h IS the lubJect of thIS bilt, _ks to lower penon~ income
taxes, broadening the VAT base, adjustlna excise taxes on pelrOleum and
aULOmobilclI, and reducmg the CS181.e and donor', tax. In addition, the
following tax adminiSU1ltion rnea.u~1I are being pursued under this
package: II mandatory UK of fuel mariana; til mandatory issuance of e
receipts; iii) mandatory inu~ ~nnection of large and medium firms poml of
sale machines and accounl.mg system WIth BIR; ivl mandatory use of OPS
locks when lI'ansportlng cargo from poTU to economic >IOnes and free porta;
and vI relaxation of bank aeue<:y for fraud alKB.

The key features of thill bill are the rollowlng: adjusunenl of the personnl
Incomc tax brackels to correct. ror "income bracket crccpinl(, reduction or
the maxunum nue to 25% OV!:r time, except ror the highest income camel'1l
to ma.in18in progrel5lllVlty, and shin to a mod irlCd gross system to simplify
the PIT system. Revt:nue 10llL$es rrom the PIT reform will be compenllllled by
i) expanding the VAT base by limiting exemptions to raw food and o!.her
nca:ssitiea (e.g., eduCBbOn and heal!.hl, Ii) increaSing exCise tax ratea on all
petroleum products to address negative externalities brought aboul by
congesuon and pollulion, IIi) n:atruc:turing and increaSing the exciae tax on
automobi lea, and IV) reducmg !.he eawte and donora tax to six percent.

To properly determine the correct taxes to be paid on the part of the

taxpayer and the correct taxea to be collecled on the part of the BIR. II has
bec.n mandated Lbol aU eswblishmenLS shall lAue an electronie receipt or
invoice, aa the case maybe, which shall be di~tly generated and
I.ninsmilled to the BlR upon sale.

As regards putting up a ruel marking and rnonituong lIyslem, the intended

results a", increased ~nue from fuel Iivlel and highquailly pelnlleum
sold in !.he market. This step will certainly plug the leakage of duties and
taxeS due on this commodity and protect both the consumers and the
environment.

To mmple the impact of the tax increases on the pour and vulnerable
householda, earmarking for social protection progrnms is proposed.

Effective partnership between Congress and the Executive has always been
cruCial in mOVIng the country'a development agenda fono.'llrd Today, a

2
,
window of opport\lnily exilltll to take the country to the next level of
development. This window of opportunity, characterized by strong
maCioe<:onomic fundamentals, global Iccoglliuon for lhe I5UtceS!l of lhe
(:Oun ll)'. and B popu lar new government, provides the neeessruy condition to
realiu: the Pft'sidmt'. vision for the counuy. Thill bill is the author', humble
contnbuuon to thl' call to become pertner for real posiuve change.

GIVen .11 meae, the timely passage of this bill III earnestly IIOUght.

Dilllrlcl, Qulrino

)
 Repu bile of the Phllippmes
HOUSE OF REPRESENTATIVES
Quezon ell,)'

Seventeenth Congress
First Regular Session
(" 4774
House Bill No. _ _

Introduced by ReprtlHnt.tlve Dak:lla c.rlo E. Cua

AN ACT AMENDING SECTIONS 6, 22, 24, 25, 31 , 33, 34 , 79, 84, 86,
99,106. 107, 108, 109, 113, 116 148, 149, 155. 232 , 237 A1fD 288;
CREATING NEW SECTIONS 148A, 237A , 264-A AND 264-8; A1fD
REPEALI NG SECTI ONS 35 AND 62 ALL UNDER REPUBLIC ACT NO.
8424 OTIU:RWlSE KNOWN AS " THE NATIONAL INTERNAL REVENUE
CODE OF 1997"

Be .1 arraded by In. Senale and In. House of R~fafllJes of fhe

PhilIPpines III Congress U$#mbled:

I SECTION I. Title This Act shall be known 8S the "TIU; Refonn for
,2 Accelemuon Rnd InduSlon"

,
, SEC. 2. Dec:larnhon of Pol.cy. It js hereby dc:c.lw-ed the polley of the State:

7 I. To enhance the progreuivlty of the tax !system through the

I mtionalization of the Phillppme Intemal revenue tax system, thereby
9 promoung sustrunable economic growth;
10
II 2 To provide, as much as posSIble, an equitable relid to a greater
11 number of taxpayers 1ft order to improve ~Is of dispo ... ble income
11 and Increase economic activtty; and

"16Ij 3. To ensure that tlK: govemment I. able In provide for the needs of those
under ilS Junschction and care through the provision of better
17 Infrastructure, health, education and social protection for the people.
11
"
20 SEC. 3. Section 6 of the National Intemal Revenue Code of 1997, as
21 amended, is hereby further amended to read as fallows:


1 ~SEC . 6. Power of the Commi...ioner to Make " ... e .. menb; and

2 PreKribe Addltloaal Requirement.; ror Tax AdmlnllltBtlon and
J Enforcement.-
4
5 (A) Xxx

7 181 Xxx

9 (e) Xxx

"II (0) Xu

"I) lEI xxx

"15 IF) Authonty of the Commissioner LO Inquire AND RECEIVE

16 INFORMATION ON [inlOl Bank Deposit Accounl.S and Other Related
11 DATA IlnfonnaLionl Held by Financial Institutions. - Notwithstanding
18 any contrary proviSion of Republic Act No. 1405, OTHERWISE
19 KNOWN AS THE ~BANK SECRECY LAW;, Republic Act No. 6426,
20 otherwise known as the Foreign Currency Deposit Ac t; and otha-
21 general or special laws, the Commissioner is hereby authorized to
22 inquire into AND RECEIVE INFORMATION ON the bank deposiLS and
23 other related DATA [information] held by financial institutions of:

201 (I) A decedent to determme his gross estate.

25 (2) Any taJtpayer who hBS filed an application for compromise of his
26 tllX liability under Sec. 204 (Al(2) reason of financial incapaCity to pay
27 hiS tax liability.

21 In calli: a taxpayer fdes an application to compromi!le the payment of

29 hiS tax liabilities on hiS claim that his financial position demonstrates
)0 a clear inability to pay the tax assessed, his application shall not be
)1 considered unless and until he waives in writing his privilege under
)2 Republic Act No. 1405, Repubhc Act No. 6426, (o therwise known 83
)) the Fo~ign CUlTCncy Deposit Act of the Philippines,j or under other
)4 general or special laWlS, and sueh wllh-er shall constitute the authority
)' of the Commissioner to inquire into the bank deposits of the taxpayer.

l6 (3) A specific taxpayer or taxpayers, UPON AN OBLJGATION TO

17 EXCHANGE TAX INFORMATION TO A FOREIGN TAX AUTHORIlY,
n WHETHER ON REQUEST , AUTOMATIC OR SPONTANWUS, (subject
39 of a request for the supply of tax information from a fo~ign lax
40 authority] pursuant to an international convention or agreement on
-II tax matters to which the Philippines is a signato,), Dr II party of:
"1 Provided, That the information obtained from the bank" and other
-I) financial institutions may be used by the Bureau of Internal Revenue
44 for lax assessment. verificauOrl, au d it and enforcement purposes.

,
 I [I n case of n:quest from a fore.gn tax authomy for tax information
2 held by banks and financial in.ututions. ) lthel THE exchange of
1 information WITH A FOREIGN TAX AUTHORnY, WHETHER ON
4 REQUEST OR AUTOMATIC, shall be done m II lleCure manner to
, ensure confidentiality thl!':reof undl!':r such rules and regulation. as
6 may be promulgated by the Secreta!')' of Fmance, upon
1 recommendation of lhe Commlssioner

8 IN CASE THE EXCHANOE OF INFORMATION IS UPON REQUEST

9 FROM A FOREION TAX AUTHORITI', IThel THE Commissioner shal]
10 provide the tax information obtamed from bank. and finandaJ
II insutuuons pursuent to a convenuon or ag:rec:ment upon reque.t of
12 the foreign tax authority when auch requesting foreign tax authority
11 has provided the foUo....ing mformation to demonstrate the foreseeable
14 relevance of the informellOn to the nquesL

I' lal The identity of lhl!': pl!':rson undl!':r uamination or Invesugation:

16 lbl A statement of the information being sought Induding i~ nature

11 and thl!': torm In which the said foreign tax authonty prefers to receive
II the Information from the Commissioner;

19 lcl The tax purpo!le for which me information Is bemg sought:

20 ld) arounds for believing that the Information requested is held in the
21 Philippines or IS In the possession or control of. person within the
22 junsdiction of the Ptuitppines;

2J Ie) To the a;tent known, the n&me and address of any pl!':nMm be-lieved
24 to be- In poSSCSSlOn of the requr$tcd information;

23 (f) A Statement that the request la m confonntty With the law and
26 admlmStnluve prac uces of the aa.id foreign tax authority, such that If
21 the requested informalion ....'a. within the jurildlcuon of the said
28 foreign tax authority then it would be- able to obtam the mformation
29 under Its low or in the normal course of administrauve practice and
JO that it is conrormity with convention or international agrfl!ment; and

31 181 A statement that the requesung foreign tax authonty tuu

n exhausted all mean. available in illl own territory to obtain the
]} information, except those that "''Quid give nse to di.proportionate
14 dIfficulties.

]S The Commissioner shall fOlWllni the information a. promptly as

]6 possible to the ~uesung roreign tax authonty. To ensure a prompt
11 response , the Commllwoner shall confirm receipt of a reque.t in
38 wnting to the ~uelling tax authority and shall notify the lalter of
]9 deficiencies in the request, if any, within SIXty (60) daY'll from the
40 receipt of the request.

6
 1 If the Commissioner IS unable to obtam and provide the information
2 within ninety (90) days from the receipt of the request, due to
) obstacles encountered in fumishing the information or when the bank
-I or financial institution refuses to furnish the information, he shall
5 ImmedIately mform the requesung tax authority of the same,
6 explaining the nature of the obstaclcs encountered or the reasons of
7 refusal

8 The tcrm foreign tax authority'. as used herein. shall refer to the tax
9 authority or tax administration of the requesting Stllte under the t.aJt
10 !.reaty or oon~ntion to which the Philippines is a signatol)' or a pan;y
II of.

12 IN CASE THE EXCHANGE OF INFORMATION IS AUTOMATIC OR

IJ SPONTANEOUS, THE COMMISSI ONER SHALL PROVIDE TAX
14 INFORMATION OBTAINED FROM BANKS AND FINANCIAL
IS INSTITUTIONS IN ACCORDANCE WITH INTERNATIONAL COMMON
16 REPORTING STANDARDS.
17 (4) ANY TAXPAYER AOAINST WHOM A CRIMINAL CASE IS INITIATED
18 FOR OFFENSES COVERED UNDER SECTIONS 25<1 AND 255 OF Roll.
19 ~24, AS AMENDED, SUBJECT TO RULES AND REGULATIONS
20 PRESCRIBED BY THE SECRETARY OF FINANCE UPON
21 RECOMMENDATION OF THE COMMISSIONER OF INTERNAL
22 REVENUE .~

"
24
25 SEC. 4 Section 22 of the National Internal Revenue Code of 1997, as
26 amended. is hereby further amended to read a5 follows;
27

",.29 "SEC. 22. DeJlnltions. - When used in this Title;

II
32 XlCJI XlCJI xxx
)]

"
15
)6
((00) The term 'statutory minimum W<lge" shall refer to the rat.e
rlXed by the Regional Tripartit.e Wage and ProduetiviQ' Board, as
37 defined by the BtHl:au of Labor and Employment Stllustics (BLES) of
)8 the Department of Labor and Employment (DOLE).
J9
~O (HHI The term slatufO'li mrn.imum lWge eomtff" shall refer to a
41 worker In lhe pnvate !J(!(:tor pa1d the statutory minimum wage, or to
42 an employee in the public sector with compensation income of not
43 more thlln the statutoI)' mimmum wage in the nonagricultural se<:tor
44 where he/she is asslgned.l

""7" SEC. 5. Sccuon 24 of the Nauonlll Intemal Revenue Code of 1997. as

"8 amended, Is hereby further amended to read all rollows;

7
 I "SOC. ~4 . Income Tluc Rates . -
2
J (AI Rata: of 'nco",e Tcu: on Indivldual Ci'tlllen and Indluidual
, Re&ldent AUen a/tha Phlllppfne .
(1) A.n income tax hi hereby imposed;
6
1

la, On the lruIiIb\e ,neam!! ddined in Seeuon 31 of thi, Code,

other than income subject to tax under Subsections (B). Ie) and
10 (0) of this Section , derived for each t.axablc year from allllOurcell
within and without the Phihppints by ev!!ry individual chucn of
"
12
OJ
the Philippmes rellldin,g therein;

(bJ On !.he taxable U'lcomc defined III Se<:uon 31 of this Code,

"" other than IOcome IUbJect to tax under Subsections 181 , Ic) and
0) of thiS Section, derived for eac h twwblc year from allllOurces
"11 within the Philippine!! by an individual duzen of the PhilippInes
who i. residmg oUlSIdc of the Ptulippmes includinJ overaeas
""
20
conlnlct worker. refcl'Tt.'d to In Subsection Iq of 5tiorl 23
hereof; and
21
22 Ie) On the I.wmble Income defined In Section 31 or this Code,
2J other than income subject to tax under Subaecuons fBI, fC) and
(0) of thIS Section, derived for eac h taxable yem- from all .aUrtti
"" WIthin the Phihppmes by an mdiVKIual Ilhen ..'ho is II. reSident o f

"
21
2!
lhe Phihppmes.

,.
29
(2) Rates of Tax on Taxable Income of Individuals. - The tax ahall be
1I computed in Ilccordantt WIth and al the flUes estabhshed m the
)2 follol'o,ng achedule:
lJ

""
J6
[Not over PI 0 ,000 .... 5"
J1 Ovt:r P10,000 but not OYer P30,OOO. . ................. PSOO. 10% of the
]I excess over PIO,OOO

.
"
"
Over P30,OOO but not OYer P70.000 ................... P2,SOO'" 15% of the
excess OYer P30.000

"....,J Ovt:r P70,OOO bUI not over PI40.000 ... ........ .. ..... . P8 ,SOO + '20% of the

.,
..,. Ovt:r P140,OOO but not over P250,OOO.
excess ove rP70,OOO

. ... ........ P22,SOO +25% of the

"
. excess over PI40.000

Over P250,OOO but not over PSOO.OOO ....... ......... PSQ,OOO +30% of the
t'XttllS over P250,OOO

 ,I Over PSOO.OOO ... ..................... PI25,OOO .. 32%or the
excess over PSOO,OOO I
l

l 1"1 ON COMPENSATION INCOME EARNERS. -
7
TAX SCHEDULE EPFECTIVE JULY I , 2017 AND TAXABLE YEARS
2018 AND 2019
10
NOT OVER P250,0Q0 ... . .......................... 0%

""
Il OVER P250,OOO BUT NOT OVER f>400,OOO ....... 20% OF THE

"Il EXCESS
P250,OOO
OVER

"17 OVER P400,OOO BUT NOT OVER PSOO,OOO . P30.000

OF THE EXCESS
f 25%

"" OVER P4oo,ooo

"
" OVER PSOO,OOO BUT NOT OVER P2.000.000 .......... Pl30,OOO to 30%
OF THE EXCESS
"
2l OVER PSOO,OOO

"
2l OVER P2,OOO,OOO BUT NOT OVER PS,OOO,OOO ........ 1'490,000 ... 32%

'"
27
OF THE
OVER P2,OOO,OOO
EXCESS

""
lO
OVER PS,OOO,OOO . _ ........................... Pl,4SO,OOO
THE EXCESS OVER
PS,OOO,OOO
~ 351M. OF

21

,."
II

TAX SCHEDULE EFFECTIVE JANUARY 1,2020 AND ONWARDS

II
J6
17
NOT OVER P2SO,OOO ........................................................... 0%

""" OVER 1'250.000 BUT NOT OVER P400.ooo .................... 15% OF

THE EXCESS OVER

.,""
.,.
P250.ooo

OVER NOO.ooo BUT NOT OVER PSOO.OOO ............... 1'22.500 + 20%

OF THE EXCESS

'".,
..
OVER P400.ooo

OVER PSOO.OOO BUT NOT OVER 1'2,000.000 ........... P I02.500 + 25'1t.

OF T H E e:xCESS
lO OVER PSOO,OOO

 I OVER 1'2.000,000 BUT NOT OVER PS,OOO,OOO ........ P402.500 + 30%
2 OF THE EXCESS
,3 OVER P2,OOO,OOO

~ OVER PS,OOO,OOO .......................................... Pl,302,SOO ~ 35% OF

6 THE EXCESS OVER
7 PS,OOO,OOO
,
10 PROVIDED, THAT APTER 2020, THE TAXABLE INCOME LEVEt.S IN
II THE ABOVE SCHEDULES SHALL BE ADJUSTED ONCE EVERY FIVE
12 (5) YEARS THROUGH RULES AND REGULATIONS ISSUED BY THE
IJ SECRETARY OF" FINANCE, UPON RECOMMENDATION OF THE
IJ COMMISSIONER, APTER CONSIDERING AMONG OTHERS, THE
15 EFFECT ON THE SAME OF THE FIVE YEAR CUMULATIVE
16 INFLATION RATE.
17
18
19 For married mdlviduals, me husband and Wlfe, subject to the
20 proviaion of Section 51 101 hereof, shall compute separately their
21 individual income tax based on their respective total taxable income;
22 Pro.,.ded, Thut if any income cannot be definitely attributed to or
2J identified as income exclusively earned or realized by either of the
24 spouses, the same shall be divided equally between the spouses fOT
15 the purpose of detennin;ng their respective taxable income.

"2827 {Provided, Thai minimum wage earners as defined in Section 22 (HH)

of this Code shall be exempt from the payment of income tax on their
29 taxable Income: Provtded, further, Thall.he holiday pay, overtime pay,
10 night shift di!ferenual pay and hazard pay reee:i~ by such minimum
)I wage earners shall likewise be exempt from income tax.]
12
33 fBI RATE OF TAX FOR SELFEMPt.QYED AND/OR PROF"ESSIONAt.S
34 WHOSE GROSS SALES OR GROSS RECEIPTS IS BEt.OW THE VAT
3S THRESHOLD AS PROVIDED IN SECTION 109. - AN EIGHT PERCENT
36 (6%1 INCOME TAX ON GROSS SALES OR GROSS REVENUES SHALL
37 BE IMPOSED IN WEU OF VAT AND PERCENTAGE TAX.
J8
]9 (C) RATE OF TAX FOR SELFEMPLOYED AND/OR PROFESSIONALS
40 WHOSE GROSS SALES OR GROSS RECEIPTS IS ABOVE THE VAT
41 THRESHOLD AS PROVIDED IN SECTION 109. -
42
4) SEt.F-EMPt.OYED AND/OR PROFESSIONAt.S SHALL BE TAXED IN
44 THE SAME MANNER AS CORPORATIONS AS TO APPLICABLE TAX
4S RATE, MINIMUM INCOME TAX AND ALLOWABLE DEDUCTIONS, AS
J6 PROVIDED IN SECTIONS 27 (AJ. 27 (E) AND 34. RESPECTIVELY, OF"
47 THIS CODE.

""
SO (8) Rate of TtIX on Certain Pcusfue Income: -

10
 ,)
(1) rnte rut.$. Royaltlu, PrUes and Othc,. Winning.. -A final tax at
the nne of t ....'!';nty percent (20%) III hereby impolled upon the
amount of interest from any currency bank deposit and yield or
,,
4 any other monetary benefit from deposit substitutes and from trust
funds and !iimilnr arrangements; royaJtics, except on books, 8a well
as other Illerat)' works and musical compositions, which shall be
7 imposed a final tall: of ten percent (10%); prizes (except pnu!!
amounting to Ten thousand pe!JOS (PIO,OOOI or leu which mall be
subject to tax under SubsecllOn (AI of I!4!Ction 24. and other
winnings [[exeept Philippine Charity Sweepstakes and Lotto
10
winnings)] denved from !JOUTCeI within the Philippines: Prollfded,
"
12
Il
howeuer, nUll interest Income ~ivro by an individual uucpaycr
(except a nOnTCsident mdlVidual) from a depository bank under the
upanded foreign currency deposit system shall be subject to a
"" final income tax at the rate of seven and o n -half percent (7 Y..%) of
such mterest mcome; Provided, further, Thai interest income from
"
17 long-term deposit or investment in the form of savmgs, common or
18 individual trust funds, deposit substitutes, invcslment
management accounts ond other investments evidenced by
"
20
21
certificates In such form prescribed by the Baogko Sentro.l og
Pilipina.s (BSP) shall be exempt from the trut imposed under LIlis
Subsection: Provided, jirwlly, That should the holder of the
"'4
2l cenificale pre-termmate the depoSIt or invelllment befon: the fifth
l5thl year, a final tax shall be impostd on the entire income and
shall be deducted and withheld by the depository bank from the
"26
27
proceeds of the long-term deposit or investment certificate based
on the remalnmg m8runty thereof:
28
29
JO
]I
J2
II
l4
3S SEC. 6. Section 25 of the National Internal Revenue Code of 1997, as
36 amended, is hereby further amended to read as [oUows;
J7
l8
39 SEC. 2 5. T_ on lfonre. idell..l Alle n Individual_ -

""42 (AI JIIonrufdent Allen Engaged In Trade or Busfo"" Withfn the

41 PhUlppfnu. -
"
""
""
",.
"
 1 IBI Nonresident Alien Not Engaged in 'l'rade 0" Bu$lne_ W i thin
2 tlu! PhfUppfnes.-
J

,
5

7
xxx XXX xxx

8
9 UCI Allen Indluldual Employed by RegIonal or Are" Headqucuters
10 GIld Regional Operating Headquarters of Multinational
11 Compunlu.+ There shali be ieo.ied, eolle<:ted and paid ror each taxable
12 year upon the gross income received by every alien individual
1) employed by regional or area headquQrl.efS and regional openning
14 headquanerll established in the Philippmes by multinational
15 companielJ as salaries, lO."8ges, annuities. compensation, remunenltion
16 and other emoluments, tluch 1111 honoraria and allowances, from such
17 regional or area headquarters and regional operating headquarters, a
18 UUI equal to fifteen percent 115%1 of such gross income: Provided,
19 however, That !.he same tax treaunent shall apply lO Filipinos
20 employed and occupymg the same position as those of allen!
21 employed by lheae multinational companies. For purp<HIeS or this
22 Chapter, the term 'multinational company' means 8 (ON:ign firm or
23 entity engaged In International trode Wlth affilialc:s or subsidIaries or
24 brunch offices in the Asia Pacific Region and other fON:Ign markets. )

""
27
28 IIDI Allen Indl uidual Employed by Ons ho,.e Banking Units . - There
29 shall be levied, col1c:c~ and paid for each taxable year upon the gross
30 income received by every allen indiVIdual employed by offshore
31 banking units established In the Philippines as salaries, wages,
32 annuities, compensation , remuneration and othe r emolumenUl, such
33 as honoraria and allowances, f.rom such orr shore banking units , II LlIJt
34 equal to fifteen percent (1 5%) of such gross income: Provided,
)5 hawevu, That the "me tax treatment shall apply to Filipinoll
36 employed and oc<:upying the same positions as those of aliens
37 employed by these: ollshore banklfig units. I
J8
J9

"42
41 liE) A lien Jndl vldual Employed by Petroleu.m S e rolce Contracto,.
and Subcontracto,., - An Alien individual who is a pc:rmanent
43 resident of a foreign CQunuy but who ill employcd and allsigned in the
4-l PhilippInes by a foreign seNlt'e contractor or by a foreign IJCMt'e
45 subcontrnctor engaged in pet.roleum operations In the Philippines
46 shaU be liable to a tax of fifteen pC!:.n:c-nt (15%) of the salaries, WBges,
47 annuities, compensation , remuneration and other emoluments, lIuch
48 as hononuia and allowances, received from such contraCtor or
49 subcontrac tor: Provided, hov.'c:'YCr, That the same tax trealment shall

"
 I apply to a Filipino employed and occupying the same position as an
,,
:2 alien employed by petroleum service comr8CIGr and subcontractor.]

j IAny inoome earned from aU other SQurces within the Philippines by

6 the alien employees referred to under Subsections (C!, (ot and tEt
1 hereof shall be subject to the pertinent income tax, as the case may
8 be, imposed under this Code.]"

JO
II SEC. 7, Section 31 of the National Internal Rev.:nue COde of 1997, as
12 amended, is hereby further amended to read as follows:
Il
"1~ SEC. 31. Ttu:able Income, Defined, - The term 'Iaxable income'
16 means the ~ninent items of gross income specified in this Code less
17 ]the] deductions land/or personal and addItional exemptions), if any,
18 I;Iuthorized for such types of income by this Code [or Other special
19 laws1,

""
22
23 SEC. 8. Section 33 of the National Internal Rev.:nue Code of 1997, as
24 amended, is hereby further amended to read as folloW8:
2l

""
28 "SEC. 33. Special Tnatment of Frl.nge BenefiL -

"3031 {A)lmposftfon of T(U. - A ftnal tax of THIRTY PERCENT j3O%J

32 EFFECTIVE JULY 1,2017, JANUARY I, "2018 AND 2019 ]thirty
B four percent (34%\ effective January I, 1998: thirty-three percent
H (33%1 effective January I , 1999; and thirty-two percent (32%)
3S effective January 1,"2000 and thereafter], is hereby imposed on the
36 grossed-up monel&)' vslue of fringe benefit furnished or granted to
)1 the employee (except rank and file employees as defined herem) by
38 the employer, whether an mdillidual or a corpomtion lunless lhe
39 fringe benefit Is required by the nature of, or necessary to the
40 u-ade, business or profession of the employer, o r when the fnnge
~I benefit is for the convenienoe or adl/tltltage of the employer). The
~2 lax herein imposed is payable by the employer which tax shall be
43 paid in the same manner as provided for under Section 57 (AI of
:14 this Code). The grossed-up monetary wlue of the fringe benefit
4S shan be determined by dividing the actual monetary \Ia.Iue of lhe
46 fringe benefit by sixty-six percent (66%) effective January t, 1998;
41 slXlyacven percent (61%) effective January I , 1999; and sixty-
43 eigtll percent 168%1 effective January I, 2000 and thereafter:):
49 Provided, howewr, That fringe benefit furnished to employees and
~O taxable under Subsection]s] (BII, (C), to) and IE)] of Seclion 25

"


I shall be twled at the applicable ratc:[s! imposed thereat: Prouided,

2 furlher, That the grossed -u p monelal)' value of the fringe benefit
1 shall be detennined by dividing the actual monetary value o f the
4 fringe benefit by the diITcren~ bct\\~n one hundred percent
5 1100%) and the applicable rale(s] ofincome tax under Subsect.ionlaJ
II IBU. (e), (0). and (E)) of &etion 25, PROVIDED, THAT IN 2020 AND
7 ONWARDS THE FRINGE BENEFIT SHAl.L FORM PART OF THE
8 GROSS INCOME SUBJECT TO THE REGULAR INCOME TAX
9 RATES.
10
II
12 SEC.9. Section 34 of the National Internal Revenue Code of 1997, as
J3 amended , is hereby further amended 10 read as foHows:

"16
"17 SEC. 34. Deduc e/oIU from OroSI Income.- Except for taxpayers
earning compensation income ansing from personal services rendered
18 under an employer-employee relationship ..... here no deductions shaU
19 be allowoed under this Section (other than under subsection 1M)
20 hereof,) in computing uumble Lncome subject to Income tax under
21 sections (24(AI( 241CI; 2SIA); 26; 271"1, (SI and jC); and 281A)(I), there
:u shall be allowed the following deductions from 8f'O!lS income;

"25
" xxx xxx xxx

"
17
28 ILl Optfo nol Srondo.rd Deductton (OSDJ. - In lieu of lhe
29 deductions a11oY.'ed under the preceding Su~ons, an
30 mdLvidual subject to tax undcr Section 24 tC) , othe r than a
3I nonresident alien, may elect a standard deduction in an amount
J2 nOI exceeding TWENTY PERCENT (20%) OF HIS GROSS SAl.ES
31 OR GROSS RECEIPfS [forty percent (40%1 of his gross SIlles or
34 groS!l receIpts. as the CIlse ma,ybe.1 In the case of a corpomtion
J5 subject to tax under Sections 27 IA) and 28 IA)II). It may elect A
36 standard deduction in an amGun! not exceeding fony percent
37 (40%) of ils 8f'O!I!I income 8S defined In Seellon 32 of this Code.
38 Unless the taxpayer !lLgmfies In his return his intention to elect
39 the optional standard deduction, he !lhall be considered all
40 having I.lVailed himself of the deductions allowed in the
". preceding Subsectionll. Such elec::lion ....hen made in the rerum
42 IIhall be irnlvocable for the taxable year for which the rerum is
") made: ProWled, That an individual who is entit.led to and
401 c:IlWI1ed for the optional standard deduction shall nOI be
45 required to submit with his tax return such financial
46 statements otherwise required under this Code: Prouided,
47 ful1her, That el'Ocept when the Commissioner otherwise permllJl,
48 the said individual !lhall keep such reaJrds pertaining to his
49 gTO!IS sales or gross receipts, or the said corpomtion shaU keep
SO such records pertaining to his grOSli Income as defined in
 ,I Section 32 of this Code during the la.xable year, as may be
required by the rules and n:gula tions promulgated by the
l Secretary of Finance, upon recommendation of the
4 Commiseioncr.
,l

7 IIMI Premium Payments on Health and/or HospitaiLzatfon

, In_ranee of an Individual Taxpayer.- The amount of

premiums nOI 10 exceed 'Two lhousand four hundred pesos
10 (P2,400) per family or Two hundred pesos (P2DO] a month paid
during the taxable year for health and/or hOllpital.iultion

""
13
14
insurance taken by the taxpayer for hunlleU, includmg hUll
fnmily, shall be all~ as a deduction from his gross income:
Provided, That said family has a gross income of not more than
15 Tv."O hundred finy lhou5Ilnd pesos (P250,OOO) for the UUUlblc
year: ProUfded, jil1JJ./Iy. ThaI in the case of mamed taxpayers ,
"17 only the spouse claunlng the additional exemption for

"" dependents shall be entitled lO !.his deductlon.1

"
"22
2l
24 SEC. 10. section 3S of the National Inlt!mal Revenue COde of 1997. as
2S amended, is hereby repealed.
26
27
28 S~C . II. Section 62 of the National Inlemal Revenue Code of 1997, as
29 amended, is hereby repealed.
30
31
12 SEC. 12. Section 79 of the Nstional lnu:mal Revenue Code of 1997. as
33 a mended. IS hereby funher amended to read as follows:

"II36 SEC. 79 . In come Tax Corrected at SourcL.

31
l8
39 xxx lQO( lOOt
40

.,"...
41 (tD) Per$onal JcemptiolU.-

4l (1) 10 GeaeraJ Unless otherwise provided by this

46 Chapter, lhe personlll and additional exemption5

"4849 appbcable under thi5 Chapter shall be detennined In

attordance wilh the main provision5 of this Tille.

50

15


,, (:iI) Exe mption Ce rtiflca t e. -

] fal When to File, - On or before the date of

, CQmmenoemcnt of employment with an employer,
the employee Bh.1I furnish the employer with D.
6 signed Withholding exemption certlflcote relotlng to
1 the personal and additional exemptions to which he

is entitled.

10 fbJ Change of Sl&.tlll:\. - In case of change o f status o f

an employee as 8 result of which he Wtluld be

IJ
"11 entilled to B. 1~II8Cr or gn:atcr amount of exemption,
the employee shall, within ten PO) days from such

"" change, file with the employer a new withholding

exemption c:enifica.tc rellecting the change.

11 " (el Use of Certificmc!I, - The ceruficates filed

hereunder shall be used by the employer in the
detenmnation of the amount of !.aXes to be
20
"" WIthheld.

""
2l
(d) Failure to Furnish Certificate. - Where an
employee, in violation of thi!! Chapter, either fails or
reruses to file 8 Withholding exemption certificate,

"" the employer shall Withhold the !.axes prescribed

under the sc:hedule tor U'ro eJCemption of the
26 withholdm8 tax table detemuned pursuan t to
21 Subsection (A] hereof.J

""
30
]I
J2
II IIf') H ...s bwtd WId Wife. Whcn a husband and wife each are
recipLents of \\'"D.ges, whether from the same or trom different
'""
l6
employers, taxcs to be Withheld shall be determined on the
following bases:

"
18
.," (1) The husband shall be deemed the head of the family
and proper c:latmant of the addluonal CJlemption in
respect to any dependent children. unle$5 he explicitly
"
..
"
4]
waives his right in favor of his wife in the withholding
exemption certificate.

" (2) Taxe!I !Lhall be withheld from the wages of the wi fe in

accordance with the schCi1ule for zerO exemption of the

."
"
10
withholding tax table prescribed in SubllCCtion (DIl2Jld)
hercof.1

"
 I
2 1\JO{ xxx XlIJIIo

l
,
6 SEC. 13. Section 84 or the National Internal Revenue Code of 1997, as
7 amended, is hereby funhe ... amended LO read liS follows:
,
10 SEC. 84 . Rates oJ &tate Tax. There shall be levied, assell!led,
11 collected and paid upon the transfer of the net estate as determined in
12 aOCQrdllIl~ wi th Sections 85 and 86 of e~ry deo::denl, whelher
IJ resident Qr nonre1lident of the Philippines, a SIX PERCENT (6%1 TAX
14 based on lhe value of such n e t estate. las compu ted In accordance
IS wi th the folloWlng sched ule:
16 If the net estate is;
17

"" But not ~r Th,~ Plu. Of the Excess

20
21
""" shall be: ""',
22 P200,000 Exempt
2l Ploo,OOO 500,000 0 .% PlQO,ooo
24 500,000 2,000,000
2,000,000 5,000,000
PI5,OOO
135,000 11%
." 500,000
2,000,000
"
26 5,000,000 10,000,000 465,000 1.% 5,000,000
,.
27 10,000,000 And Ove r 1,215,000 20% 10,000,0001"

"
lO
31 SEC. 14. Section 86 of the National Internal Revenue Code of 1997, as
32 amended , are hereby fuMer amended to read as follQws:

,.
II

3S SEe. 86. Computation oJ Net Stote . - For the purpose o f the Ui)t
36 im posed in this Chapter, the value of the net estate shall be
37 dctcnnined:

"
)9
40
IAI Deduction.. Allo .......d to th e State -, In the case of a citizen or
fe!lIden t of the PhilippinclII, by deductin g from the value of the gross
41 eSl8le-
42
41 ((I ) Expenses, Losses, Indebtedness, and taJ(e&, - Such amount$:'

".IS (al For actual funentl expenses or in an amount equal to five

46 percent (5%) of the &TOM eS18te, whichever is lower, but in no
41 case to exceed Two hundred thousand peso~ (1'200,000);
48 (hi For judicial expenses of the testamentary or inle8l8~
49 proceedings;

17


1 (e) For claims against the estate: Provided, That Ilt the time the
2 indebtedness WIlli incurred the debt instrument was duly

,,l nOlarWcd and, if the loan was contmcted within three (3) yeartl
before the death of the decedent, the adminis1.rnlOr or executor
,, Bhall submit a statement showing the disposition of the
proceeds of the- loan:
(d J For claims of the deceosed against In$Olvent persons where
, the value of dCcWcnt', interest therein is included in the value
of the gross estate; and
leI For unpaid mortgages upon, or a ny indebtednc" in respe<:t
10
11 LO, property where the value of decedent', interest therein,
12 undiminished by such mortgage or indebtedness, is included in
13 the value of the gross estate, but not mcluding any Income tax
upon income received af\..er the death of the decedent, or
"" property taxes not accrued before his d eath, or any estate laX_
The deduction hen~in allowed In the rose of claims against the
"
11 eswte, unpaid mortgages or any indebtedness shall, when
founded upon a promizse or agn:cment, be limited to the eXl.enl
"" that they were c;onlmcted bema fide and for an adequate and
full considemtion in money or money's "'"Drth. There shall also
20
21 be dedUCted losles incurred during the lICulement of the estal.e
arising (rom fires, storms, shipwreck, or other easualties, o r
"
2l from robbery, theft or embe-l::dement, when such losses are not
c:ompe nsated for by insumnce or Otherwise, and If at the time
"
21 of the filing of the n:tum such losses have not been eJaimed as
a deduction for the income tax purposes in an income tax
"
27
28
retum, and provided that such losses were incurred not later
than the last day for the payment of the estllte laX as
prescribed in Subsection (A) of SCction 91.)
"11
3D

32 1(2)111) PropertlJ PreviousllJ Taxed.. - An amount equal to the value

lJ specified below of Ilny property fonning a part of the gross estllte
situated In the Philippines of any person ,... ho died within five (5)
" years prior to the death of the decedent, or transferred to the
""
31
decedent by gift within five (S) years prior to his death, where such
property can be identified as haVing been received by the decedent

."
"" from the donor by gin, or from such prior decedent by gift, bequest,
devise or inheritllllce, or which can be identified a.s having been
acquired In exc hange fOT property so received:

.
"
.,"
One hundred pe~nt (100%) of the value, if the prior decedent
died Within one (1) year pnor to !.he death of the decedent, or if
the property was transferred to him by gift within the same
.," period prior to his death;

Eighty pen;:e:nt [80%) of the value, if the prior decedent died

"" more than one It) year but not more !.han two 121 years prior to

11
 ,1 the death of the decedent, or if the property ..... as tnlnsferred to
him by gift within the 8I1mc po::riod prior to his death:
1
, Sixty percent ~60%) of the value, if the prior decedent died more
than tWO (2) years but not more than three (3) years prior to the
death of the de<:edent, or if the property was tnlnsFcrTed to him
6
1 by girt within the same period prior to his death;
8
Forty pc:n;cnl 140%) of the value, if the prior decedent died
more than three (3) ),e8rs but not more than four (4) years prior
"
11 to the death of !.he decedent. or if the propc'rty was transFerred
to him by gift within the same period prior to his death;
",.
IJ
Twenty percent [20%) of the value, if the prior decedent died
more than four (4) years but not more !.han five IS) yeats prior
"
16
11
to !.he death of the decedent. or If the property was transferred
to him by gift Wlthm the same period prior to his death:
18

" These deductions shall be allowed only where a donor's laX or

cstatr tax Imposed under this Title wa.s finally determined and

"" paid by or on behalf of such donor, o r Ihe estate of such prior

decedent, as the case may be, and o nly in Lhe amounl finally

,."
13 determined &11 Lhe value of such property in determining the
value of Ihe gin, or the gross estate of such prior decedent, and

" only La the extent that the value of suc h property is included in
the decedent's gross estate, and on ly it in dett'TlIlining the value
"
11 of th e estate of the prior decedent, na deduction \Iras allowable
under paragraph (2) in respect o f the property or properties
"
19
30
given in exchange therefor. Where a deductian was allowed of
any mortgage or other lien in determming the donor's tax, or
11 Lhe estate tax of the prior decedent, which WIlS paid in whale or
in part prior lO Lhe decedent's death, then the deduction
"
lJ
l1
alloy.able under said Subsection shall be reduced by the
amount so paid, Such deduction allowable shall be reduced by
Jl an amount which bears the same mtio to the amounts allowed
16 as deductions under pIli1l8mphs (II and 13) of this Subsection
31 as the amount otherwise deductible under !IIlId paragraph (2)
18 bears to the value of the decedent's estate, Where !.he property
J9 referred \0 cansisLS o f twO or more items, the aggregate value of
40 such Items shall be used for the purpose of computing the
deduction .)
"
"...
4J [(3)) (21 Transfers for Public: UM:. The amount of all the bequests,

..,.
., legacies, devises or transfers to or for the use of the Oovemment of
the Republic of the Philippines, or any polilJ.cal subdivision thereof,
for exclusively public purposes.

. \(4)](3) The Family Home. . An amount equivalent to the current

fair market value of the decedent'. family home: Provided, however,
That if the said current fnir market value exceeds [One) THREE
'" 19
 I million peeos {PilI 3.000.000), the excess shall be SUbjecllO estate
Z I.IUI:. As a .sme qua nOl\ condillon for the exemption or dedu ction,
3 S8.1d family home must have been the dettdents family home as

,
4 ttrtifted by the barangay eaptain of the IDelIhty.

6 HSJI (4) Slandard /)edJJcriolt. - An amount cquivelenlto One mllhon

7 pesos (PI ,OOO,OOO) .

9 U6) Medl(;ui Iq1erIses. - Medical Expenses incurred by the dedenl
10 withm one (I) year prior to his death which shall be duly
II substantiated With receiptS: Pnwtded, That In no ease shall the
12 deductible medieal elrpcnses exceed Five Hundred Thousand Peso.

.
Il

I~
(PSOO,OOO).t

tm Amount R~i~ by Heirs Under Republic Act No. 4917. - Any

16 Rmount recei~ by the heu-s from the decedent - employee .s a
17 consequence of the death of the decedcnt-employee in a(:(lOrdance
18 with Republic Act No. 49 17: Prolllded, That such amount Is
19 included in the grou estllte of the decedenq
20
21
U fBI Deductton.s AUo~d Co Nonrmdent EIICaC.,. - In the case of
21 nonret.ldent not a cit.izcn of the Philippines, by deducung from the
2~ ... alue of that part of his gross estate which al the time of hll death ill
25 situated in the Philippines;

"
27
28 HI) :xpensu, Lo3ses, lndebledneSll fmd Taxetl. - That proportion of
29 the deductions specified in paragraph (I) of Subsection (A) of this
lO Secuon which the wJue of such part bears to the value of h..
)1 enure cross estate wherever situated;)
)2
II
34 1f21lfllhoper1y Prevtou.sly TaKed - An amount equal to the value
35 'pecirled below of any property fonnlng part of the grou estB\I:
J6 situated in lhe Phili ppines of any person who died within five {S)
J7 years pnor to the death of the decedent, or transferred to the
18 decedent by Sift Within five (5) yean prior to hIS death, where such
J9 propC'rty can be Identified as having been recei~ by the decedent
40 from the donor by gin, or from such prior decedent by gift,
41 bequest, deviJK' o r inheritance, or which can be Identi rled as

.
42

"
45
having been acquired in exchange:: for property so receIved:

One hundred pel ceut (100%1 or the ...alue ir the prior deoedenl died
-46 within one (II year pnor to the death of the decedent, o r ir the
~7 propC'rty was transferred to him by gift, within the same period pnor
~8 10 his death;

20
 I Eighty pcn:ent (80%) of the value , if the prior decedent dll~d more than
2 one (1) year but not more than two (2) years prior to the death of the
3 decedent, or if the property was transfe~ \0 him by gift within the
,
4 same period prior \0 his death:

7
8 Sixty pc:n:ent (60%) of the value, if the prior decedent died more than
9 two (2) years but not more than three (3) years prior to the death of
10 the decedent, or if the property was transfem:d to him by gift within
II the so.me period prior to his death;
12

,."
15 Forty percent (40%) of the value, if the prior decc:dent died more than
16 three (3) years bUI not more than four (4) years prior to the death of
11 the decedenl, or if the property was transferred to him by gift within
11 the same period prior to hiS death; and
,."
21
22 Twenty pen:enl (20%) of the value, If the pnor decedent died more
2} than fOUf ('I) years bUI not more than live (5) years prior to the death
24 of the decedent, or if Ihi; propen)' ""-as Lnmsrerred to him by gift within
2.S the same period prior to his death ,
26
21

"29 These: deductions shall be allowed only where a donor's tax. or estate
30 tax. imposed under thiS Title is finally detennined and paid by or on
3I behalf of such donor, or the estate of such prior decedent, as the case
12 may be, and only in the amoum rmally detennined as the vBlue of
lJ such property In determining the value of the gift. or the gross e!ltate
J~ of such prior decedent, Bfld only 10 the extent that the value of such
3S property is included in that part of the decedent's gross estale which
]6 at the time of his death IS sLlua!erl in the Phllippmes; and only if. in
37 determining the value of the nct cst.ale of the prior decedent, no
38 deduction Is allowable under p8llIgraph (2) of Subsection (8) of Ihis
39 5e(:t>on, in respect of the property or propentes gtven in exchange
40 therefore. Where a deduction ....-as allowed of any mortga.ge or other
41 lien in detennining the donor's tax, or the estate tax of the prior
42 decc:de.nt, which was paid in whole Of in part prior to the decedent's
43 death , then me deduction allowable under said paragraph shall be
4~ reduced by the amount 110 paid. SUCh deduction allowable shall be
4S reduced by an amount which bears the same mtio to the amounts
46 Bllowed as deductions under paragraphs (I) and 13) or this Subsecuon
47 as the amount otherwise deductible under paragraph 12) bears to the
48 value of that pan of the decedent's gross e6t.ate which at lhe time or
49 his dealh is situated in the Ptulippines. Where the property referred to

21


I consists of tWO 12) or more items, the aggregate value of such itr:ms
2 shall bt: used for the purpose ofcompuung the deduction.
)

5 ((3)J (2) Trorvsfers fo~ Public Use. - The amount of all bequests, legacies,

7
devises or tmnsfers to Of for the use of the Government of the
Republic of the Philippines or any political subdivision thereof, for

tJllOclusively public purposes.)

10
II Ie) Share in Che COrVu9a l Property. - The net sha~ of the surviving
12 spouse in the conjugal partnershIp property as diminished by the
Il obligations properly chnrgeablc to such properly sholl, for the pUrpollC

"" of this Seelion, be deducted from the net estate of !.he decedent.

"17 [(D) Mlscellaneau, Provllllon.s. - No deduction shall be allov;ed in the

case of a nonresident not a citi:len of the Philippines, unless the
"" executor. admimstrator, or anyone of the heirs, as the case may be,
includc3 in the re turn required to be filed under Seelion 90 the value
20
21 at the time of his death of that part of the gross estate of the
22 nonresident not situated in the Philippines.1
2l
21
IIEII CDI Tax Credit/or Estate Taxe. paid to a Forefgn Count'll. -
"26
27 [1) In Genernl. Thc tax imposed by this Title .haI1 be credited With
the amounur; of any C!ltate true impD$Cd by the authority of a foreign
"" coumry.
30
1I
)2 12[ umilofions on Credil. - Thc amount of the c:rWit taken under this
)) Section shall be subject to each of the following limitations:

"3635 le1 The "mount of the crc<ilt in respect to thc tax paid tu /lny country
31 shall not e:>tceed thc same proportlon of the tax agamst which lIuch
credit ill taken, which the decedent'll net elltate lIituated within
"" lIuch country tamble under thi!! Title bear!! to hill entire net C!!tatCj
~d
""
.
4)" IhI The total amoum of the credit shall not e:>tceed the IIilrnc proponion

..
.,"
of the tax again!!! which lIuch credit IS taken, whieh the decedent's
net estate situated outside the PhilipPInes taxable under this Title
bcanJ to hill entire nct esta te.

.-
50
SEC. 15. Section 99 of the Nationlll Internal Revenue Code of 1997, as
amended. is hereby further amended to read lUI follows :

22
 I SEC. 99. RAte.. of TAK Pl:Iyctble tlJI DonDr._
2
)
" (AJ In General. - The tlUl: for each calendar year SHALL BE 6'110 AND
5 shall be computed on the baSIiS of the total net Bifts made during
6 the calendar year, PROVIDED THAT ANNUAL NET GIFTS NOT
7 EXCEEDING PIOO,ooo SHALL BE EXEMPT (m accordance with
, the following schedule:1

10
I tr the net gift is:
"
12
" ""', But nOI Ov~ Th.~ Au. Of the Excess
""16 shall be "".,
"" PIOO,ooo
PIOO,ooo
200,000
Exempl
0 PIOO,ooo

"
20
200,000
500,000
500,000
1.000,000
2,000
14 ,000
'"
."
."
200.000
500,000
21
22
1,000,000
3,000,000
3,000.000
5.000,000
44 ,000
204,000
."
Lo..
1,000,000
3,000.000
5,000,000 10,000,000 40<1,000
"" 5,000,000
2)
I ,()().I, 000 LS" 10,000,000 I
""
26
10,000.000

27 1(8) Tax Payable by [JonQr if Donee is a Suanger. - When the done or

21 benertciafy is a strnnger, the tax payable by the donor shall be thirty
29 percenl (30'lI0) of the nel 8ltUi For the pUrpo!Ie of this tax. a 'atnznger"'
30 is a person who i. oot a
11
12 III Brother. Sillier (whether by whole of half-blood). spouse,
B ancestor and lineal descendan l; or

"
lS
36
(2) Relative by consanguinity In the collateral line Wlthm the
fourth degree of relauonship.,
17
n Irql IBJ Any contribution In cash or in kind 10 any candida Ie, political
J9 party or coalition of parues for campaign purposes shall be govemed
40 by the Elecuon Code, as amended.

"4l SEC. 16. Seeuon 106 of the National Intema! ReYenue Code of 1997, as

..
44

"47
amended, i. hereby further amended to read as follows:

. "SEC. 106. Value-Added TAK on Sale Of Goods or Properties,

2l

I (AJ Rate and Base of Tax. - There shall be hWled. all3ei!d Iltld
2 collected on every sale, barter or exchange of goods or
,,
J propertie., a value-added talC. equivalent to TWELVE [tenl
percent (12%) (( 10%)1 of the gross !leUing pnc:;c or gross value
In money of the goods or properties sold, ban.ered or
7
CJ(changed. auch tax to be paid by the seller or transferor.
[Provided, That the President, upon the recommendatJ.on of
, 8 the SeerelDry of Finance, shall, effeeuve January 1, 2006,
raise the rate of value-added tax to t'A"elve percent (12%),
10 after ,tr'lY of the following conditions has been satisfied.

"
12
IJ (II Value-added lIUl collec:tion 8S a peroentagt! of
14 Gross Domestic product lOOp) of the previous year

"17
16
exceeds two and four-fifth percent (2 4/5%): or

(il) National gove.mment defici t as a percentage of

18 GOP of the previous year c"cccds one

"
20
and one-halfperecnt (1 1/2%).[

"
"
2J

"" (2) The roUowing aale8 by VAT- rcgiBtered per!lOns shaJl be

"
27
subject to zero-percen t (0%) rate:

""
,_, Export Salu, The tenn 'ellport ulea ' means:

JO III The sale and actua l Bhipment of goods

31 from the Philippines to a foreign country,

,."
irrespective of any !!hipping arrangement that
JJ may be agreed upon which may influence or
determine me u-ansfer of ownership o f the
JJ goods so exported and paid for In acceptable

"
J7
l8
foreign currency or i15 equivalent in goods or
services, and accounted for in accordance
with the rules and regulations of the &ngko
39 SenUlJI ng PillPznflS laSp!;

".,., 1121 Sale of raw materials or packaging

.,."
ma terio.ls tu a nonreSIdent buyer for delivery
to a resident local export-oriented enterprise

..
.,
to be u!led in manufacturing, processing
packing or repacking in the Philippines of the
&aid buyer's goods and paid (or in acceptable
foreign cu~ncy and 8a;oun!.ed for in
accordance with the rules and regulations of
the Bangko SerumJ og Pilipi1t(l.S 18SPl;1
""


I 113) Sale of raw material. or packaging

2 materiaL. to export-onented enltrpriae whose
,,
l eXpOrt Alc. aceed IleVen1y percent (70%1 of
total annual production;)

,7
U") Sale of gold to the Bnngko Scntllli ng
Pilipinos (BSP)I;

10
[(5) Those considered t}Cpon sale. under
EXe<:Utive Order No. 226. otherv."lIt known .s
the Ommbu. Jn~.tmenl Code of 1987, and
"
12
Il
other .peciallaw.; and)

"" [6112) The sale of goods, ,upphes, equipment

and fuel to persons engaged In international
16 snipping or inl~tional air tran.pon
17 operations; PROVIDED, THAT THE OooDS,

""
20
SUPPLIES, EQUIPMENT AND FUEL SHALL
8E USED FOR INTERNATIONAL. SHIPPING
AND AIR TRANSPORT OPERATIONS:
21

"
2l (3) DIRECT EXPORTS BY A REGISTERED

""26 EXPORT PRODUCER OF' EXPORTS

PRODUCTS, OR THE SALES OF EXPORT
PRODUCTS TO ANOTHER EXPORT
27 PRODUCER OR TO AN EXPORT TRADER, AS
21 DEFINED UNDER EXECUTIVE ORDER NO.
29 226 AND OrnER SPECIAL LAWS:
lO PROVIDED, THAT THE EXPORTS OP
II EXPORT TRADERS SHALL ONLY BE:
12 DE:EMEO EXPORT SALES WHEN ACTUALLY
II EXPORTED BY THE EXPORT TRADER, AS

""
16
EVIDENCED BY lANDINO CERTIFICATES
OR SIMIlAR COMMERCIAL DOCUMENTS.

17 [ [bl For-dtlrl Currency Denominated Sa.le. The

l8 phrll!le '(orel8Jl currency dC<lomlmlled sale" means
19 sale to Ii nonresiden t of goods, except thoae

"" mentioned in Sections 119 and 150, as'fllbled or

manufactured in the Philippinea (or dehvery to a
resident in the Philippine., paid for In acceptable
"..,
" foreign currency and accountc<l for in aecordance
With the ruk:. and regulations of the Bangko Serurol

""
fiJI Pil!plruu IBS..,;)

" (elIBI Sale, to pcrsons Of entities whose exemption

""
under [special 18 ....s orl international agree ments to
which the Philippines is a signatory. [effectively
lubjec:1Ii such sales to uro rate l: AND
"
"
 I (C) SALE OF GOIoO TO THE BANGKO SENTRAL NG
2 PIUPINAS(BSP)."
1
S SEC. 17. Section 107 of thfe Nallona! !ntfemal Revenue Code of 1997, as
6 amended, is hereby further amende<! 10 read as follows:
1
,
10 "SEC. 107. Va.lueAdded Tcu:: on Importation ofOootJ...-

"
12
I) IAlln GeneraL- There shall be leVied, assessed and COllected on
14 every importallon of goods a value-added true equivalent to
IS TWELVE (tenl pf;rcent (12[10]%) based on the total value used
16 by the Bureau of Customs in determining tariff and customs
17 duties plus customs duties, excise taxes, if any, and other
18 charges, such tax to be paid by the imponer prior to the release
19 of such goods from customs custody: Provided, That where the
20 customs duties are detenmned on the basis of the quantity or
21 volume of the goods, the value-added tax shall be based on the
22 landc:d cost plus excise taxes, If any. IProlJlded, further, That the
2) President, upon the recommendation of the Secretary of
24 Finance, shall, effective January 1, 2006, raillC" the mle of value-
~ added talC to twelve percent (12%\, after any of the followmg
26 conditions has been aausfied:
27 iii Value-added tax collection as a percentage of Gross
28 Domestic ProdUct (GOp) of the previous year exceeds two
29 and four-fifth percent (2 4 / 5%1; or
30
31 fii) National government deficit as a percentage of GOP of
32 the previous year exceeds one and one-half percent (I
33 1/ 2%1J

""
36 (BI Transfer of Goods by Tcu::.-exempt Pe13onao. -
11
J8
39

.."
xxx XX1< xxx"

42 SEC. t8. Section 108 of the National Internal Revenue Code of 1997, as
o amended, IS hereby further amended to read as follow.:
.,"
.
46
47

49
50
SEC, lOS. VAlueadde d Tcu:: on SAle of Senllees and Use or Lease
of Propertf.es._

(AI Rate and Base of Ta.oc. - There shall be levied, asscssed and
collecled, Ii value-added tax cquivaJent LO TWELVE jtcnl percent

16


I 11'2%) [(10%)1 of gross receipts derived from the sale or tJIOchange

2 of SC'rvices, including the use or \ease of propcrutl. IProvtded,
,,
J That the President, upon the re<:ommendauon of the Secretary
of Finance, .halI, effective January I, 2006, rai.e the .... te of
value-added UlX to l~lyt pen::ent (12%) . after IIny of the
6 following conditions ha$ been lIIltiefied:
7

Ii) Value-added ~ collection a' II percentage of Gross
Domestic Product (GOp! of the pn:viOUI year tJliceeds tWO
10 and four-fifth pen::enl 12 4 / 5%); or

"."
OJ
(ii) National government defiat 8. II percentage of GOP of
the previous year exceeds one and one half percent (I
1/ 2%JI

The phl'1lllC 't.ale or ellIe-banc' 01 service.' means the performance of

""17 all kind. of tervK:es In the PluhpPlm:s for other. for a fee,
remuneration or COnlllderauon, including those performed or rendered
by construction and aervice contnlctora, stock, real estate,
""
20
commercial, custom. and immignluon brokers; lessors of property,
whether personal or real; ..mrehousing 5Crvieea; lessors or diln.r ibutol'S
of cinemafOgraphlc films: persons engaged in milling, proccaling,
"22
2J
manufacturing or repacking JOOda for othel'S; propncfOra, opcrafOrs or
keepers of hotela, motels, rellthou$C!I, pension hou5CtI, Innll, rcIrt.;
propnetol'8 or operatOr. of restaurants, refreshment parlora, calca and
"15 other eating placea, including clubs and caterers; dealers in
KeUrities; MONEY REMITTANCE CENTERS; lending in~stors;
"
27
21
transportation contractors on !hell' transport of good. or carzoc.,
Including per80ns who transport good. or carsocs for hlte and other
domestic COmmon ca rriers by land rewtiV1: to their transport of goods
"JO or c:arxoes; common camera by all' and 5C1l relative to their transport
of pasxngers, goods or cargoea from one place in the Philippines to
"
J2 another place in the Philippines; salea of electricity by generation
,.
JJ companies, tranamislion, and distribution companies; service. of
franchi5C grantees of clcctrie utilities, telephone and lelcgmph, radio
,."
J7
and teleVUJlOn broadcasting and aU other franchise grantees except
those under Section 119 of this COOe and non life insurance
companies (except their crop insurances), including aurety, fidelity,
,.
JI indemnity and bonmng companlc.s; and aimilar se.tVices regllt'dles. of
whether or not lhe perfonnance thereof caU. for the cxerCIlIC or use of
the physical or menllli facultiell. The phrase 'ule or exc:hallJe of

"'" service.' shali likewise include:

(I) The lease or the use of or the nght or pnVllege to use any

"" copyright. patent, dellign Dr modcl, plan, settet formula or

process, goodwill, trademark, trade brand or other like property
" or right;
" (2) The lease or the UIloC of, or the right to utse of any industrial,
"" commercial or ICie.ntific equipment;

"
 I (3) The supply of SClenurlC, ttrltmCllI, mdustrial or commercial
2 kno.... ledge or mfom1lluon;
,, [41 The supply of 8ny ani'lance that IS ancdlary lind .ubsidilll)'
, to Rnd IS furnished as a means of enabhng the application or
enjoyment of any such property, Dr right .s hi mentioned in
, lubpanlgraph (2) or any such knowledge or I"foonation liS IS
mentioned in lubpa/"9graph (3) :

, (5) The supply of services by II nonresident pt'l'1IOn or his

emp~ In connection WIth the use of property or nghur.
ID belonlPng to, or the Installauon or operation of any bnmd,
II machinery or other apparatus purc.hsKd from such
Il nonresident pentOn;

IJ (6) The supply of technical advice, assistance or Iervic:e.

rendered in conoe<:tion WIth LedtmcaJ management or
" administ.ration of any lICicnldic, industrial or commercial
"16 undertaking. V'l:nlun:, proJeCt or scheme;

" (7) The iea!le of motion picture films, films, tapes and di8C'll; and

~levision,
"" (8) Th.., lease or the use of or the right to usc mdlo,
satellite lnlnsmiaaion and cable television time.

20 Lease of properuel Ihall be subject to the talC herein ImpolCd

21 irrespectiV'e of the place where the contract of lease or licensing

"2J agntment ....'as executed if the property IS leased or used in the

Philippines.

"26
2l
The term ' Iroas receipts' means the total amount of money or
its equivalent n:presenung the contract pncc, compensation,
sel"VlCC fee, n:ntal or royalty, includmg the amount c harged for
27 materials supplied with the services and deposits and advanc ed
21 payments actually or constructively received during the t.axl!.ble

"" quarter for the services performed or LO be performed. for

another peraon, excludmg value-added tax_

JI
J2 (8) Tl-aruac:tlon.. Subject to Zero hn:ent 10'IfI R(I~,-The

,.
JJ follo ....ing services performed in the Philippines by VAT-
regjsttted peraons Uuill be subject. to zero percent (~) rate.

"
J6
J7
JI

"". (3) Services n:ndered to persons or enllhes whose exemption

under ISpC!(:ml laws orl International agreements to which the

21


Philippines is a signatory effectively subjects the supply of such

2 services to zero partent (0%) rate;
J
, (4) ServlceS rendered to persons engaged In international
shipping or intemallonai air transport opemlionls, Including

7
leases of property for use thereof; PROVIDED, THAT THESE
SERVICES SHALl. BE EXCLUSIVELY FOR INTERNATIONAl.
, SHIPPING AND AIR TRANSPORT OPERATION'S;

10 [(5) Services performed by subcontmcto~ and/or contractors in

"
12
IJ
processms, converting. o r manufacturing goods for pn
enterprise whose export sales exceed seventy pen;ent (70%) of
total annual production;[

"" (5[61) Transport of passengers and corgo by DOMESTIC air or

"17 sen \ocssels from the Philippines to a foreign country;

"" ((7) Sale of power or Cuo::! generated through renewable lIOurces

or energy such as, but not limit.e<l to, biomass, solar, wind,
20 hydropower, geothennal, ocean energy. and other emerging

"
22
energy SOUrt:e1l uSing technologies such as fuel cells and
hydrogen fuels.'
2J

""26 xxx xxx ~

27

""30 SEC. 19. Section 109 of the NatiolUli Internal Revenue: Code of 1997, II.!I
31 amended, is hereby further amended to read SiS follows:
II
JJ

,."
)S SEC. 109. Elcempt Transactio,... -

J7
3B (1) Subject to the provlsloru of subsection (2J hereof, the
39 followl.ng t.-a,..actlons shQII be M:empt from the ualue-added
40 tax;
.\

"
43 (A) Xxx;

" (B) Xxx;

.,""
." let Xxx;
I(D) Importation of professional lnstroments and implements,

" wearing apparel, domestic animalll, and personal household

"
 I effects (~xcept any vehLcle, vessel, aircraft. machinery other
1 goods for use in the manufacture and merchandise of an)' kind
,,
3 in commercial Quantity) belonging to pe~nil com ing to settle in
the Philippines. for their own use and not for sale, barter or
exchange, accompanying lIuch persons, or arriving within
6 ninety (90) day. before or after their arrival, upon the
1 production of evidence satisfactory to the Commissioner, thal
, such per80ns Ill"e actually coming to settle in the PhilipPines
and that the change of reSidence i1!o OO'la rlde;J
10

13"" (0) IMPORTATION OF PROFESSIONAL INSTRUMENTS AND

IMPLEMENTS. TOOLS OF TRADE, OCCUPATION OR

"" EMPt.QYMENT. WEARING APPAREL, DOMESTIC ANIMALS,

AND PERSONAL AND HOUSEHOLD EFFECTS BELONGI NG TO

"
11
PERSONS COMING TO SElTLE IN THE PHII.IPPINES OR
FIUPINOS OR THEIR FAM1UES AND DESCENDANTS WHO

20
"" ARE NOW RESIDENTS OR CITIZENS OF OTHER COUNTRIES,
SUCH PARTIES HEREINAFTER REFERRED TO AS OVERSEAS
FlUPINOS, IN QUANTITIES AND OF THE CLASS SUITABLE TO
11 THE PROFESSION, RANK OR POSITION O F THE PERSONS
11 IMPORTING SAID ITEMS, FOR THEIR OWN USE AND NOT FOR
1J BARTER OR SALE. ACCOMPANYING SUCH PERSONS, OR
11 ARRIVING WITHIN A REASONABLE TIME: PRQVIDD, THAT

"
16
11
THE BUREAU OF CUSTOMS MAY. UPON THE PRODUCTION
OF SATlSF'ACTORY EVIDENCE THAT SUCH PERSONS ARE
ACTUALLY COMING TO SETTLE IN THE PHIUPPINES AND

""
JO
THAT THE GOODS ARE BROUGHT FROM THEIR FORMER
PLACE OF' ABODE; PROVIDED. FURTHER, THAT VEHICLES.
VESSELS, AIRCRAFTS, MACHINERIES AND OTHER SIMILAR
II GOODS F'OR USE IN MANUF'ACTURE, SHAl.l. NOT FAl.L
J2 WITHIN THIS CLASSIF'I CATION ANa SHALL THEREFORE BE
J3 SUBJECT TO DUTIES, TAXES AND OTHER CHARGES;
J4

"
16
J1
(E) ServIces subJect to perccntage tax under Title V;

JI
(F] Services by agncullural contract gro....'CT"II and milling for
"" othenl of palay into rice. com into grlUl and sugar cane into raw
sugar;

""4l
""46
(G) Medical, dental, hospital and veterinary services except
those tendered by proreSoliionals.

"" IH) Educational services rendered by private educational

institutions, duly accredited by thc Department of Education
"" (DepED) , the Commission on Higher Education ICHED(, Lhe

JO


, Techn.e:al Education and Skill, Developml'nl Aulhonty rTESOA)

and those rendered by government educational institution.;
)

,,4 (I) Servteel rendered by indIviduals pursuant to an employer-

employee relationship;

7 1-11 SefVic;es rendered by regional or area headquarters

established In the PtulippinCI by multinational corpora lions
which act as supervi.ory, communicallons snd coordinating
10 cenlel'll rOt Uleir affiliates. subsidiane$ or branches In the Asla-
Pacific Region and do not earn derive income from the
"
12
Il
Philippines;
01'"

14 (K) Trunaactionll whLch ore exempt under International

agreements to which the Philippines i, signatory [or under-
"16 spec..] laws, cJtCt'pt thOle under Presidenual Decree No. 5291;
17

" ((I.) Sail'S by agncultural cooperouves duly registered with the

"
20
Cooperauve Development Authorily to their members as ....-.::11 as
sak: or their produce, whether in Its ongmal state or processed

"U ronn , to non -members; therr Importauon of direct farm inputa,

machmeries and equipment, including spare pans the~f, to be
2l used directly and exclusively in the production and/or
24 pmccssing of their produce:)
2l

"
27
21
[(M) Gross receipts from lending activities by credit or multi -
purpose cooperative. duly registe~ wnh the CoopcraUYe
Development Authonty: )

"30 I(N) Sales by n on-agricultul'lIl, non electne and non-c redit

1I cooperativCl duly re81ltered With the CooperatIve Ocvelopment
II Authonty; ProVided, That the share capital contnbution of each
)) member docs not exceed Fifteen thousand pesos (PI S, 000) and
)' regardless of the aggregate capital and net aurplus ratably
dismbuted among the members;)

""17 tOI 14 Export Silks by persons who are not VAT-registered;

II

" . (PI 1M) Sale of real propcrtiea not pnmarily held for sale to
customel"$ Nor held for lease in the ordmary COUrtIC of ttade or
business lor real property utihud for low-cost Ilfld aocialized

""4l houling al defined by Rcpublie Act No. 7279, otherwillC known

u the Urban Dcvc.lopment Ilfld Housing Act of 1992, and other

.."
4l" rcialcd Ia""., residential 101 valued alOne million pcS06
(PI,SOO,OOOj Bnd belOVo', house and 10\, and other residential
dwellings "alued at Two million five hundred thousand pcllOB

. In, 500, 000) and below: ProVIded, That not later than
January 31, 2009 and cvcry three (3) y~ thereafter, the
amount herein Btated IhaJl be adjusted to their prcsent values

"
 1 uSing the Consumer Price tndex, as pubhahed by the National
2 Statistics Omce INSOII;
J
, [(Q) Lease of rul<ienual umt WIth 8 monthly rental not
exceeding Ten thousand pesos (pIO, 0001 _ Provided, Thai not

1 late r than January 31, 2009 and every three (3) ye801
thereafter, the amount herein lltaled shall be adjullted to itll
, present value using the Consumer Price IndeJl IlS published by
the NatioNiI StaLlstics Ollice (NSO);]
10
11 ]R] (N) Sale, Lmponauon, pnnLing Of publlcauon of books and
12 any newspaper. mag;uine review Of bulletin which ap~a ... at
IJ regular interval. with fuced prices for subllCripLion and sale and
which III not devoted prinCIpally to the publication of paid

"" adveniaementa;

11" [51 {OJ Transport of paa.:ngera by intttnauonal carncn;

""
20
Iml (PJ Sale, unportauon or leaR of pa~nger or cargo venel,
and aircraft , including engine, equipment and spare parts
21 thereof for domestic Of internauonal transport operaUQnll;
22
2J flU)) (Q) ImportBllon of fuel , goods and suppUes by persons
engaged in inttrnlnional shipping or air transport operations;
" PROVIDED, THAT THE FUEL., GOODS, AND SUPPL.IES, SHALL.
"
16
21
BE USED FOR INTERNATIONAL. SHIPPING OR AIR TRANSPORT
OPERATIONS;
21

",. M (R) SeTVIcel of bank, nonbank linantial mtennediane.

performing quall banking fun(tiQns, and other non bank
J1 financial intennedunies: [and]
II
,.
JJ (5) SALE OF POWER OR FUEL GENERATED THROUGH
RENEWABl.E SOURCES OF ENERGY SUCH AS, BUT NOT
L.IMITED TO, BIOMASS, SOl.AR, WIND, HYDROPOWER,
"
J6 GEOTHERMAL., OCEAN ENERGY, AND OTHER EMERGING

"" ENERGY SOURCES USING TECHHOt.OOlES SUCH AS FUEl.

CEl.LS AND HYDROGEN FUELS; AND

"'0 (WI fTJ Sale or leaac: of goods or properties or the performance or

services other than the transactions mentioned m the precedmg
"" paragraphs, the gross annual sales and / or rec:eip~ do not
exceed the amOUnt of THREE MILUON lOne million lift
""
.." hundred thouaand] pesos (P3,OOO,OOO.OO IPI,500,OOOIl;
ProllIded, That not later than JanuiUy 31 , 2017 and eve!)' three
(3) years the~after, the amount herein stated &hall be adjusted

."
lo i~ preM!nt \'alue uain8 the Consumer Price Index, as
published by the [National Statistics-Office {NSO).IPHll.IPPINE
STATISTICS AUTHORITY (PSA).

J2
 I SEC. 20. Secuon 113 of the Nauonal Internal Revenue Code of 1997, as
2 amended, is hereby further amended to read Il.!I follows:
,
1

, SEC. 113. Involeing and Accouoting RequLremeot. for VAT.

6 Registe red Pe ....on -
1

Q IA) Invoicing Requireme nts. - A VAT-registered person shaJ.IIMue:
LO
11 (t) A VAT Invoice for eve!)' sale. barter or exchange of goodll or
12 properties: and
11
14 (2) A VAT official receipt for every lease of goods or properties, and
1~ for every aale. barter or e:>lchangt: of KlVlces.
\6
11
18 FOR THIS PURPOSE, E1.ECTRONICALLYGENERATED VAT
19 INVOICES AND RECEIPTS , DULY REOISTERED IN ACCORDANCE
20 WITH THE REQUIREMENTS PRESCRIBED BY THE COM MISSIONER
21 OF INTERNAL REVENUE , AS APPROVED BY THE SECRETARY OF
22 FINANCE, SHALL BE RECOGNIZED FOR INPUT TAX PURPOSES.
23

"
2~ xxx :a:>I xxx"'

"
21
28 SEC. 21. Section 116 of the National Internal Revenue Code of 1997, as
29 amended, is hereby funher amended to read as follo",'$:
30
]I
32 SEC. 116. Tax on Persons E!.;empt from Value .. dded Tax (VAT).-
33 Any person whose sales or receipts are exempt under Section
14 109IM I(TJ of this Code from the payment of ~'8.lueadded tax and who
JS is not a VAT-registered person shall pay a lruI: equivalent to three
36 percent (3%) of his groSII- quanerly salell or receipts: Provided, That
37 cooperatives II-hall be exempt from the thJl!e percent (3%) graM
38 receipts tax herein imposed."

""
-II
42
SEC. 22. C hapter 5 of Tille vor the National Internal Rew:nue Code of 1997,
as amended, is hereby funher amended to read all follows:

""
" ' CHAPTER v

.
46
47 EXCISE TAX ON PETROLEUM PRODUCTS

49 SEC. 14S. Manufaerured Dila- and Other Fuela-. There shall be

~O COllected on refined and manufactured mineral oils and motor fuels,

JJ


I the following exCise taxes whiCh shall alUlCh to the goods hereundtt
2 enumerated a. soon II they an: in cldstence I. such:
,
) EFFECTIVE JULY I , 2017

} tal LUbricating oils and greases, including but not limited 10,
6 baxstock for lube oil' and greases, high vacuum diltillatc$, aromallc
7 extnu:ts. and other similllr preparauons, and addiuves for lubncatmg
oils and areSIM'!S, whether weh add,uves are petroleum baKd or not ,
9 per ilter and kilogram relpectivdy, of volume capac ity or "'~ight. Wour
LO PCIOS ,od fin.y eentllV'OI (P4.50U SEVEN PESOS {P7 .00) ProVIded,
11 howeuer, That the excillC taxes paid on the purchased feedstock
12 (bunker) uaed m the manufactun: of excisable ankles and fonning
\J pan thereof ,haU be e rcc:hted againa! the e:l(Cise tD.lC due thereJrom:
14 Prouided, furrlwr, That lubricating ods lind grea.&el produced from
Ij baSC'S\ocka and addiuve. on which the excise tax has already been
16 paId ,hall no longer be 1Iubject to cxeillr 1ruI: Prcwided, jirw/ly, That
17 locally produced or Imported oils previously taxed as such but are
IS subsequently reprocessed , re-refined or recycled shall likewise be
19 subject to the tax llDposed under this Section,

"n
21 fbJ PrQce.aed gas, per liter of volume capacity, [FiVe ccntavos (PO.OS)]
THREE PESOS (P3.00I :
23
24 (c) WIUCIl"S and petrolatum, per kilogram , [Three pesos and firty
25 centavos (P3.50U SEVEN PESOS IP7.()():
16
27 (d) On denatured Itlcohol to be uled for motive power, ~r hter of
28 volume capacity, [Five centaV()t1 (PO.0511 THREE PESOS (PJ.OO):
29 Provided. That unless otherwise: provided by special laws, If the
30 denatured alcohol is mUted with p.olll1e, the exdse tax on which h8$
)1 already been paid, only the alcohol content shaJl be subject to the tax
JZ herein prescribed. For pUrpo!le' of this Subsection, the removal of
)} denawred alcohol of nOt less than one hundred eighty degrees (180' )
J4 proof (ninety percellt (90%) absolute alcohol) shall be deemed to have
JS been removed for mouve power. Ullle" shown otherwise;
J6
J7 Ie) Naphtha. regular gasoline and other similar products of distillation.
lS per liter of volume capacity, IFour pesos and tInny five centavos
)9 (P4.3511 SEVEN PESOS (P1 _00): Prouided, noweue,.., That Ilaphtha,
40 when uaed a. a raw material in the production of petroChemical
oil produc:t.s or as replacement fuel for natural -ps fired-combll1ed cycle
42 po ....'eI" plant, in lieu of loca.lly-extrac ted natural ps dunng the IlOn-
o avail.abtlity thereof, subject to the rules and regulations to be
promulgated by the Secretary of Energy, in consultation with the
01' Seaetary of Finance, per liter of volume capacity, Zero (PO.OO):
46 ProUlded, furrlu!r, That the by-produc t including ruel oLi, diesel ruei,
017 kerosene , pyrolysia gaaolme. liquefied petroleum plIeS and Similar oil5
48 having more or ie5ll the same generating power, ..... hich are produced.
49 in the proce:unng or naphtha into petrochemical products shall be
50 5ubject to the applicablt' excise tax specified in this Section , except


I when &Uch by-products IlTt' uan"cerred to any of the local oil refineries
2 through aaJe, barter or exchange, for the purpose of further prwessing
l or blending into finished products whIch are lIubJec;l to tllciae UUI
,
" under this Section;

6 II) Leaded premium paolinI!!, per hter of VQlume capacity, [FIVe pe_
7 and thirty-li~ centavos IPS.3Si! SEVEN PESOS (P7.00); unleaded
8 premium gasoline, per liter of volume capacity, Wour peso. and thiny-
9 Ii...... centavos [P4.351J SEVEN PESOS (P7.00);
10
11 III AV1DtiOn turbo jet fuel , per liter of volume capacity. [Three pe-os
12 and sixty-seven cerua...-o. (PJ .6711 SEVEN PESOS (P7.00);
Il
14 (hI Kerosene, per hter of volume capaClly. [Zero (PO.OOII THREE
U PESOS (P3.00): ProVIded, Thal kerosene, when used . . aviation !\lei.
16 .tlalI be IJUbjeet to the aame tJl)l on aviation turbo jet fuel under the
11 preceding paragraph [g). such tax to be assessed on the \.Iller thereof:

"19 til Diesel fuel oil, and on .imilar fuel oUs having mon:: or Itss the same
20 generating power. per liter of volume capacity, [zero fPO.OO)! THREE
21 PESOS [P3.00J:
22
2J Ul l.iquerJed petrOleum ga', peT liter, [uro [PO.OOll THREE PESOS
24 [P3.00): Provided, That liquefied petroleum gas used fOT motive power
2j .hall be taxed at the equlvalenl rate as the excise uu on diesel fuel oU;
26
21 (k) Asphalts, per kilogram, [Firty-sLx ttlltavos 11'0_5611 THREE PESOS
28 (P3.(0): and

"lO (I) Bunke.r fuel oil, and on SImilar fuel oils having more or Ie.. the
31 same ge.ne.ratmg power, per liter of volume. capacty, [uro (PO.OO)[
)2 THREE PESOS (P3.00).
))

"
]j EFFECTIVE JANUARY 1,2018
16
]1 fa) Lubricating oil. and greaaes, including but not limited to,
11 bIllestock for lube oils and greases, high \acuum distillates, aromatic
39 extracts, and other sln1ilar preparations. and additive, for lubricating
0&0 oils and greases, whether such additivu are petrOleum baeed or not
1 per liter and kilogram reapecuvely, of volume capaaty or ....elght. (Four
42 pesos and fif!)' centavos [P4 SO)[ NINE PESOS IP9.00] Prolllded,
.) hoWOll'tllfT, That the eJl:ciae tax.es paid on the purchased feedstock
4-l (bunker] used in the manufacture of exCIsable ankles and fonnmg
.S pan thereof shall be ~hed aplnst the exClIIt' tax due therefrom:
46 Provided, JUT/her, That lubricating oUs and greases produced from
.7 ballt!stock. and addlUvel on which the excise tax has already been
48 paid sha.1I no longer be subject to exClIIt' tax: ProlJlded, jitUllly. Tha.t
.9 locally produced or imported oils previoualy taxed as such but are

"
 I lubsequently reproc:e$Sed , re- refined or recycled shall IIkew!!Ie be
2 lubject to the tax impoted under !.hil Secuon.
l
.. (bl Proceued pi, per hter of volume capacity, [FiY!! centavollPO.OSIJ
,S FIVE PESOS IPS.OO);

7 Ie) Waxel and petrolatum , per kllogram. [Three pelOS and fi~

,
I centavo. 1P3.5011 NINE PESOS (P9.00);

10 Id) On denatured alcohol to be used for motive po ...."Cr, per liter of

II volume capacity. [Five centavos IPO.05)[ FIVE PESOS IPS.OO):
12 PnMded, That unlelS othe-rwi!loe provided by special laws, if the
Il denatured alcohol is mixed WIth gasoline, the exoee tax on ....hk:h has
14 already been paid, only the alcohol content ahall be subject to the tax
IS herem prescribed For pUrposel of this Subsection, the remCMilI of
16 denatured alcohol of not Ie.. than one hundred eighty degree. llSO')
17 proof (ninety percent 190%) abllOlute alcohol) shall be deemed to have
18 been removed for mOLLve po .....er. unless shown otherwi!loe:

"21
20
Ie) Naphtha, regular g810line and other s.unilar products of distillation,
22 per iLter of volume capacity, [Four pesos and thiny five centavos!
lJ IP4 .3SJ1 NINE PESOS (P9.00): ProWled, however, That naphtha , .... hen
H used .s a raw material in the production of petroChemical procluCOI or
2.5 lUI replacement fuel for natural -gas-fired-combined cycle power plant,
26 In heu of locally-extracted natural gas during the non -availabilIty
27 thereof, subject to the ruIn and regulalJons to be promulgated by the
28 Seaetal)' of Energy, In eonsullauon WIth the SecretaI)' of Finance, per
29 Iner of volume capacity, Zero (PO.OO): Prolifded, /Urrlu!r, That the by-
JO product including fuel oil, dleeel fuel, kerosene , pyrolylls gasolme,
11 Uquefu:d petroleum ga!lClJ and SImilar oi-'- haVing more or less the
]2 same genero.LLng power, .....hlch are produced in the processing of
II naphtha Into petroChemical product. shall be lubjcct to the
H applicable excise tax specified In this Section, except ..... hen such by -
H products are tmnslerrcd to any of the local 011 refineriCi through sale,
J6 bancr or exchange, for the purpose of funher proceSSlnl or blending
)7 into finished products ..... hic h are subject to excise UlX under this
38 Section;

"41
"42 (f) Leaded premium gasoline, per liter of volume capacity, [Five pesos
and thirty-lIVe centavos IPS.lSII NINE PESOS (1'9.00); unleaded
oil premium gasoline, per liler of volume capacity, tpour pe""l and thlny-
.,
"" five centavo. (P4.3SII NINE PESOS (1'9.00):

"47
.
48
(gj Aviation turbo jet fuel, per liter of volume capaCllY, fTl\ree pe_
and !lixty-seven centavos (P3.6711 NINE PESOS (1'9 _00);

"
"


, I (hI Kero!lene , per lite!" of volume CIIpsety. [Zero [PO.OOII FIVE PESOS
tp5.00j Provid~. That kerolK'ne, when u~ 115 aviation fuel , ahall be
l subject to the same tI:Ul on aviation turbo Jet fuel under the precedIng
,4 paragroph [g! , BUch laX 10 be IIBache<! on the user thereof;

7 til Diesel fuel oil, and on Blmllar fue l OIls haVing more o r Ie .. the lame
, genemting power, per Uter of volume capacity, [zero (PO.DO)I FIVE
PESOS [PS.OO);
10

""
Il
iii Liquefied petroleum pll, per liter, lutO [PO.OOI[ FIVE PESOS
[P5.00): Provided, Thllt Uquerlt'<l petroleum gaB used for motive power
shall be taxed at the equivalent rille 8. the excise laX on diete:1 fuel 011,
" (k) ABphalt.a, per kilogram , [Fifly su: centall'OS (PO.5611 FIVE PESOS
""17 IPS.DO); and

"" (I) Bunker fuel 0>1, and on "milar ruel ous h,aVln& more or Ie .. the
same generatmg power, per liter of volume capacity, [l!ero (PO.DOII
FIVE PESOS (PS.OOJ _
20

"
"" EFFECTIVE JANUARY I , 2019

"
""
27
(a) l.ubricatmg glls and greases.. indudlng but nOI limited to,
oo.eatock for lube oil. and venan, high vacuum di.t.illatea, aromatic
eJ[U'BCU, and other almilat preparntion., and addlUvea for lubnCBting

",. 0111 and greasea, whethet such addillves are petroleum baaed or not ,
per Iller and kilogram respectively, or volume CBpaCity or weight, (four
30 pesoa and fifty centavol (P4.5011 TEN PESOS fPIO .OO): ProWled,
31 however, That the exdae taxea paid on the pun::halled fcedalOCk

"
II
(bunker) used in lhe manufacture or excisable arude. and ronning
part thereor shall be credited against lhe excise: tax due therefrom:

""
30
Prouided, further, That lubricating oils and vealles produced from
b&8estocks and additives on which the exCIse tax has already been
paid Ihall no longer be subject to excise tax: Prouided, finally, ThaI
17 locally produced or imported oils previously taxed as such but are
18 .ubsequently reprocessed , re-refined or recycled shall likewiae be
19 subject to !.he tax unposed under this Section.

.,"
41 fbIProcessed gas, per liler of volume capacity, (Five centavol IPO.OSIJ

..
"
"
SIX PESOS (P6.00):

Ie) Waxes and petrolatum, per kilogram , [Three pe80s and fifty
centavos fPJ .50)1 TEN PESOS WIO.OO):

(d) On denatured alcohol to be used rOf motive power, per liter of

"41 volume capaCity, (Five cenwVOI (PO.OSII SIX PESOS (P6.00): ProWled,
That unless othel'Wllle provided by apecia.l Iawa, if lhe denatured

"" alcohol is mixed with gasoline, the exciae tax on which hal already

37
 I bt:en paid, only the alcohol content shall bt: subject to the tax herein
2 prellCribed. For purposu of this Subsechon, the removal of denatured
) alcohol of nOt Ie.. than one hundred f:lghty degrees (lSOO) proof
;I (mnety percent 190'140) absolute alcohol) thall be deemed to have been
j removed for motive power, unless shown otherwise;

1 Ie) Naphtha, regular gasoline and other sim'lar products of disunodon ,
t per liter of volume C8paclty, IFour pesos and thirty five centaVOll
9 (1'4.35)1 TEN PESOS (pIO.OO) ' Prouided, hoWl!'lIe'r, That naphtha, when
10 uaed Q a ra ..... material in the production of petrochemical products or
11 as replacement (uel for natundpsfired combmed cycle power plant,
12 In lieu or Iocally-extracted natural gas during the nonavailabillty
I) thereof, subject to the rules and regulations to be promulgated by the
14 Suretary of Energy, in consultation ~,th the Sccrctnry of Finance, per
l' liter of volume capocity, Zero (PO ,OO): Provided. furlher, That the by-
16 product including fuel oil, diesel fuel, kerosene, pyrolysis gasohne,
11 liquefied petroleum ga8C'S and similar oils having more or Ie .. the
II .arne generating po'o'o'er, whtch are produced in the ptoecaling of
19 naphtha into petrochemiC8.1 products shaJJ be subject to the
20 applicable u cile tax specified in thiS Sution, except when such by_
21 products are transfel'1'ed to any of the local 011 n:finenes through sale,
22 barter or exchange, for the purpose of further processing or blending
2J into finished product. whic:h are aubject to ClCciae tax under thl,
24 Seetion;

"
26
21
IQ Leaded premium guohnto. per liter of volume capacity, (Five pc_
and thirtyfive centavos (PS.35J1 TEN PESOS !pIO.DO): unleaded
28 premium gasoline, per hter of volume capacity, [Four pesos and thirty
29 five centavos (P4 _3511 TEN PESOS (pIO.OO);
JO
JI iii Avietion turbo jet fuel, per liter of volume capaCity. [Three pe._
)2 and aixty-seven centavo. IP3.67)1 TEN PESOS (pIO.DO);
JJ
H (h) Kerosene, per liter of volume capaCity, (Zero lPO.OOII SIX PESOS
35 (P6.DO): Prolllded. That kerollCne , when used as aViation fuel, shall be.
36 .ubject to the same talC on aviation turbo jel fuel under the preceding
37 paragraph [g) . such tax to be asseased on the user the reo!;
31
39 Ii) Dlnel fuel 011. and on sunllar fuel oils haVtng more or leas the ..me
"0 generallng power, per liter of volume capacity, [ze:ro (1'0.001) SIX
~L PESOS 1P6.00) i

41 UI Liquefted petroleum gas, per litcr, [~ro (PO.ooll SIX PESOS (P6.00):

.
4-4
'U

;17
n
~dl, That liquefied petroleum gat uaed fo r motive power ahall be.
taJCed at the equivalent rate as the exCl!le tax on dil~1IC1 ruel oil;

(k) Alphalts, per kilogram , [Fiftyabc ccntaVQs IPO.5611 SIX PESOS

(P6.DO); and

""
31
 I II) Bunker fuel oil. and on 'Imillir fuel oils havmg more or less the
2 aame generating ~r. per hler of \'Olu me capacity, [Rro (PO.OOII SIX
3 PESOS (P6.00) .
,
6 'PROVIDED, HOWEVER, THAT THE EXCISE TAXES PAID ON
7 THE PURCHASED FEEDSTOCK (BUNKER) USED IN THE
, MANUFACTURE OF EXCISABLE ARTICLES AND FORMINO PART
9 THEREOF SHALL BE CREDITED AGAINST THE EXCISE TAX DUE
10 THEREFROM):!,

"
12 'PROVIDED, FURTHER, THAT LUBRICATING OILS AND
13 GREASES PRODUCED FROM BASESTOCKS AND ADDITIVES ON
14 WHICH THE EXCISE TAX HAS ALREADY BEEN PAID SHALL NO
IS LONGER BE SUBJECT TO EXCISE TAXI:I.

"
I'
11

19
PROVIDED. FINALE-Y, THAT LOCALLY PRODUCED OR
IMPORTED OILS PREVIOUSLY TAXED AS SUCH BUT ARE
SUBSEQUENTLY REPROCESSED, REREFtNED OR RECYCLED
20 SHALL UKEWISE BE SUBJECT TO THE TAX IMPOSED UNDER THIS
21 SUBSECTION.

n
23 --rHE TAX RATES IMPOSED UNDER THIS SUBSECTlON SHALL
24 BE INCREASED BY FOUR PERCENT 14%) EVERY YEAR
25 THEREAfTER EFFECTIVE ON JANUARY 1, 2020 THROUOH
26 REVENUE REOULATIONS ISSUED BY THE SECRETARY OF
11 FINANCE. UNL.ESS THE AVERAOE DUBAI CRUDE OIL. PRICE IN THE
21 MONTH PRECEEDINQ THE SCHEDUL.ED INDEXATION EXCEEDS
19 ONE HUNDRED U.S DOLLARS IUSD 100) PER BARREL..'

JO

31 SEC. 23. A new 5e(:Don designated a. SectIon 148 A under Chapter V of the
12 National lnlernal Revenue Code INIRq of 1997. as amended, i. hereby
33 inllt'rted 10 read as follo_:

].I ~ SECTION 148A, MANDATORY MARKING OF ALL PETROLEUM

3S PRODUCTS. - ALL PETROLEUM PRODUCTS, (MANUFACTURED OIL.
36 AND OTHER FUELI REFtNED, MANUFACTURED AND/OR IMPORTED
31 INTO THE PHIUPPINES, WHETHER THE SAME WERE EXEMPT
3' FROM THE PAYMENT OFTAXES AND DUTIES. OR ENTERED INTO A
39 FREE ZONE SHAL.L. BE MARKI::D WITH THE OFFICIAL MARKINO

19
 I AOENT DESIONATED BY THE DEPARTMENT OF' FINANCE (DOFl IN
2 ACCORDANCE WITH EXISTINO RULES

J THE PERSON, ENTITY OR TAXPAYER WHO OWNS OR ENTERS THE

" PETROLEUM PRODUCTS TO WHOM THE SAID PETROLEUM
S PRODUCTS ARE CONSIGNED, OR WHOEVER BRINGS THE SAME
6 INTO THE COUNTRY SHALL CAUSE THE MARKING OF SAID
7 PETROLEUM PRODUCTS WITH THE OF'F'ICIAL MARKING AGENT .

9 A. ABSENCE 0' JlARKR; P1lStlJlPTION. -IN THE EVENT THAT
10 THE PETROLEUM PRODUCTS WHICH DO NOT CONTAIN THE
II omCIAL MARKER ARE roUND IN THE DOMESTIC MARKET OR IN
12: POSSESSION OF' ANYONE OR UNDER ANY SITUATION WHERE SAID
1J PETROLEUM PRODUCTS ARE SUBJECT TO DUTIES AND TAXES. IT
14 SHALL BE PRESUMED THAT THE SAME WERE REF'INED,
IS MANUF'ACTURED. AND/OR IMPORTED OR WITHDRAWN WITH THE
16 INTENTION TO EV"DE THE PAYMENT OF THE TAXES AND DUTIES
17 DUE THEREON AND SHALL BE PROCEEDED AOAINST PURSUANT
11 TO lAW, UNLESS THE CONTRARY BE PROVEN THROUGH THE
19 PRESEI'ITA110N OF VALID DOCUMENTS AND/OR OTHER
20 EVIDENCE TO THE CONTRARY.

21 THE ABSENCE OF THE MARKER OR THE USE OF FRAUDULENT

22 MARKER ON THE PETROLEUM PRODUCTS SHALL BE CONSIDERED
2J PRIMA FACIE EVIDENCE THAT THE SAME HAVE BEEN
24 WITHDRA.WN OR IMPORTED WITHOUT THE PAYMENT OF THE
2S EXCISE TAX

26 THE FAILURE OF' THE PERSON. ENTIn' OR TAXPAYER

27 RESPONSIBLE FOR THE MARKING OF THE PETROLEUM
21 PRODUCTS AS HEREIN REQUIRED WITHIN FIFTEEN (15) DAYS
29 FROM DUE NOTICE SHAi.L SUBJECT SUCH OWNER. CONSIGNEE
JO OR IMPORTER AND THE ARTICLES TO SUCH SANCTIONS AS MAY
JI BE: IMPOSED IN ACCORD"NCE WITH THE H"nON"L INTERNAL
J2 REVENU E CODE OF 1997, AS AMENDED AND THE TARIFF AND
J) CUSTOMS CODE OF THE PHlUPPINES, AS AMENDED, AND OTHER
J4 RELEVANT EXI STING lAWS AND RULES AND REGUlATI ONS IN
JS PURSUANCE OF lAW,
J6
J7 B. PROGRAM UIP! EItIENTATION O ,.FlCE (PIO). - A PlO, HEADED
J8 BY A COF SENIOR OFFICER TO BE DESIGNATED BY THE
J9 SECRETARV OF FINANCE, AND WITH THE COMMISSIONER OF THE
40 BUREAU OF' CUSTOMS IBOCj AND THE COMMISSIONER OF
41 BUREAU OF INTERNAL REVENUE (SIRI OR THEIR DULY
42 AUTHORIZED REPRESENTATIVES WITH THE RA.NK OF DEPUTY
4J COMMISSIONER AS M.EMBERS SHAi.L DIRECTLY COORDIN"TE
"" AND SUPERVISE THE PROPER AND EFFECTIVE IMPLEMENTATION
4~ OF THIS ACT THE PIO SHALL BE SUPPORTED BY PERSONNEL OF
46 T HE DOP, AS WELL AS THOSE ASSIGNED OR SECONDED FROM
"7 AGENCIES ATrACHED TO THE DOF.

.,


1
2 THE: PIO, WHICH [S HEREBY Atn'HORIZED TO CALL Otl ANY

,,
J OFFICIAl. OF THE DEPARTMENT OF' ENERGY AND ITS A'ITACHED
AGENCIES FOR SUCH ASSISTANCE AS MAY BE NECESSARY, AS
WELL AS TO REQUIRE THE PARTICIPATION OF EXPERTS TO HELP

7
ACHIEVE THE OBJECTIVES OF THE ACT, StiALL HAVE THE
FOLLOWING DUTIES AND RESPONSIBIUTlES:
(AI TO ISSUE THE TERMS OF REFERENCE AND ENOAGEMEtfr OF
THE OFFICIAL MARKING PROVIDER;
IV
12 (8) TO ENSURE THAT ALL OPERATIONAL AND TECHNICAL
IJ WRITTEN INSTRUCTIONS ARE IN PLACE AND PROPERLY
DISSEMINATED TO ALL CONCERNED TO ENSURE THE
"Il16 EFF'ECTIVENESS OF THE MARKING SYSTEM ;

iC) TO IDENTIFY ANO RESOI.NE OPERATIONAL AND TECHNICAL

""" DIFFICULTIES IDENTIFIED IN THE COURSE OF IMPLEMENTATION;

AND
20
21 (0) SUBMIT MONTHLY PROGRESS REPORT TO THE
22 SECRi'ARY OF FINANCE: ON THE IMPLEMENTATION OF THIS ACT.
2J
THE PIO, IN UoUNCHINO THE NATIONWIDE ROI.J...OUT OF THE
"21 PROORAM, IN CONSULTATIONS WITH THE BOC AND THE 81R
SHALL SUBMIT TO THE SECRETARY OF FINANCE, AMONG
"
27 OTHERS. THE FOLLOWING: (A) SPECIFICATIONS OF THE
NATIONAL MARKER: (B) THE MARKER TO BE USED AND THE
"
29
JO
MARKING SERVICE PROVIDER; (e) TERMS Or REFERENCE AND
ENOAGEMENT OF THE PROVIDER; (D) PERFORMANCE MEASURES
J1 OF THE PROGRAM; (E) PORTS/PUoCES WHERE THE FUEL
l2 MARKING PROGRAM WI1.L BE ROLLEDOUT.
JJ

"J6
Jl
SEC. 24. Chapter 5 of Tille VI of the National Imernal Revenue Code of
31 1997, as amended. is hereby further amended to read as follows:
J8
J9

"" CKAPTER Vl- EXCISE TAX ON MISCELLANEOUS ARTICLES

"" SEC. 149. Automobiles There shall be leYled. a!>l!leslied and colle<:tcd
an ad valorem tax on automobiles based on the manufacturer's or
""" imponer '$ selling price, net of excise and valueadded tax, in
accordance with the following schedule:

49""

"
 ,

Net manufacturer'.
price/ importer', aeUlng
P"'"
..
Up to P600 ThouIIBnd 4% (2%1

IPI2 , 000 +- 20%] P24 ,OOO -f-

Over P600 Thousand to 40% of value In excels of 1'600
Pl.I million thousand

IP112, 000 .. 40%] P224,OOO ..

Over PI.I MIllion to P2. l 100% of value in exce of PI . !
MIllion Million

IPSI2,OOO" &0%1 PI ,224,OOO +

~ of value In elICCU of P2.1
Over P2. 1 Million
MilliOn

,
J
S (Provided, That the brackets reflectIng the manufacturer's pnCCi or
6 unponer', IleUmg price, net of eJCdse and ....Iue-added laJteS, 110;11 be indexed
7 by the SecrclaJ)' of Finance once every two 12 ) years ~f the chan~ in the
8 exchange rate of the Philippine peso spinal the Umted States (U.S.) dollar
9 II more than len percent (1 0%) from the date of effectivity of this Act, In the
10 case of imllal IIdjulltmcnl and from the last revision dille In the esSIe of
II lubaequent adjusuncnll.
12
JJ
I" The manufacturer. pnce or Imponcr'1 selbng pncc, net of ellcise and
IS .... Iue-added IaJl;CS, ahall be indclted by the fulll'llte of the peao dl:preelauon
16 or app~tion , as the caR may be.
17

"zo19 Prvvid~, further', That in case the change in the exchange I'1Ite of the
Pt'Ulipplne peso agamSl the U.S . dollar is at least t\l,'ent)' pen:ent {2O%j at
21 anytime withm the two-year penod reJerred to above , the Secretary of
22 Finance shall index the brackets reflecting the manufacturer's pnce or
2] Importer's sellmg pnce, net of excise and value-added taxel, by the full rate
H of the peao depreciation or appreciation, all the case may be.1

"
26
21
As uaed III this Section-

21 (a) Automoblle shall mean any four (4) or more wheeled motor vehic le
29 regardless of seating capadty, which is propdled by paoline, diesel. OR
30 ANY OTHER MOTIVE POWER EXCEPT PURELY POWERED BY eleetriclty lor
 any other motive powerl: Provided, That for purposes of Olis Act, buses,
:!: trucks, cargo vans, Jccps/jeepm:ysfjl.'epney substitutes, single cab chassis,
1 and lIpecial-purpose vehicles shall not be considered automobilcs .
5 (b) Truck/cargo van shall mean a motor vehicle of any configuration
6 that is exdusiv'CIy designed for the carriage of goods and with any number of
1 wheels and axles: Provided, Thlll pick,upll shall Inotl be considered as
,
10
8 trucks.

tc) Jeep/.JeCpneY / jeepney substitutes shall mean IllI"PhUippinejeep or

II jeepney" which are of Ole jilney type locally designed and manufactured
I:!: generally from surplus parts and component'. It shall alllO include jeepney
J3 sub,titutes Olal are manufactured from brand-new smglc cab chani, or
14 cowl cha,sis and locally CUlitomized rear body Utat h.as continuou, ,ideway
15 row lleals with open rear door and \\-ithoUt retnletable glass windows.
16
17 td) Bus shall mean a motor ~hicle of an)' configurau on wuh groa.s
18 vehicle weight of 4.0 tons or more with any number of whee:la and axles,
19 which is generaJI)' accepted and specially designed for mass or public
20 transponadon.
21
:n te] Single cab chassis shall mean a molO!' vehicle with complete engine
21 power tram and chassis equipped with a (Osb that has a maximum of lWI:I (21
24 doors and only one 11) row of seats.
II
26 (f) Spet:lal purpose vehicle shall mean a motor vehicle designed for
27 specific applications such as cemcnt mixer, fire truck , boom truck,
21 ambulance and/ or medical unit , and ofT-road vehic les (or henvy industriee
29 and not for recrentional activities.
JO
31 Provided, That in the ease of Imported automobiles not for aaie , the
l2 tax impo&ed herein shall be based on the tOtal landed value, including
B uanllBcuon value , customs duly pnd all other charges.
.l4 Automobiles used exclUSively ",ithin Ole freeport wne shall be exempt from
J~ excise tax.~
J6
J1
31 SEC. 25. Section 155 of the National Internal Revenue Code of 1997, a!il

.,
39 amended , is hereby funher amended to read as foUoWll;

"4243 ' SECTION 155. Manurscture,..' AND IMPORTERS' (to Provide

Themselves wlthJ Countin, Dr Me tering Devices to Oetermlne
Production. _ Manuracturers AND IMPORTERS of cigarenes,
..S alcoholic prodUCUl, oil products and other articles aubject to ex~
46 tax that can be similarly measured Ishall provide themselvesl SHALL
41 HAVE lwith suchl THE ne<:CSSIlry number of ,ultable counting or
48 melering devices, INCLUDING FUEL MARKING IN THE CASE OF
49 PETROLEUM PRODUCTS, to detennine as accurate ly as possible the


1 volume, quantity or number of the artic.les produced by them under

2 rule. iUld regulation. promulp~ by the Secretary of Fmance, upon

,,
) recommendation oflhe Commissioner.

6 Thill requirement shall be complied WIth before commencement of

7 operations.

10 SEC. 26. Section 232 of the National Internal Revenue COde of 1997, as
11 amended, i. hereby further amended (0 read as follows:
12

"
14 SECTION :23:2. Keep1nc or Books or Acc:ou,ota. -

""
17 (AI Corporozion.s, Componia, f'wtrters}ups or Persons RiU1red to Keep
IS Books oj Accounts. - All corporations, companies, pannenmlps or
19 pel'1lOns requi~ by law 10 pay internal revenue UlXU shall keep II
20 journal and a ledger or their equivalents: Provided, ho......ever. Thai
21 those whose quarterly 1811:11, earnings, receipUI, or output do not
22 exceed !FiftyJ TWO HUNDRED FIFTY Ihousand peS08 IPSO,OOOII
2..l (P250,OOO) shall keep tlnd use l!.impHfLl'."d set of bookkeepmg records
24 duly aulhonttd by the Secretary of Finance wherein all transactions
U and relulLS of opl!rauonl lire sho .....TI and from which all taxes due the
26 Clove.rnmenl mllY readily and lIC'Cul'1ltdy be IIIIcertained and
27 delennmed any time of the year: Pnwuled, junl!er, That corplralionll,
21 companies, partnership. or persons ...'hose gro&s qullfterly sales,
29 earnings, receipts or output exceed (One] SEVEN hundred lilly
)0 thousand peltO. (P750,OOO) ((PI50,OOOIj, &hall havt: thor books of
31 accounts audited and examined yearly by independent Certirled
32 Public Accountants and their income laX return. accompanied with.
33 duly accomplished Account Information Form (AIF'] which shall
34 contain. among others, Information lirted (rom certirled balance
3' ahec:tll, profit and \011 IWtltmcnl3, schedules listing income-
36 producing properties and the corresponding meome therefrom and
37 other relevant sutlementa; PROVIDED FURTHER, THAT THE
38 SECRETARY OF FINANCE, UPON RECOMMENDATION OF THE
39 COMMISSIONER, SHALJ. REQUIRE THE MANDATORY
40 INTERCONNECTION OF CERTAIN BOOKS OF ACCOUNTS TO THE
41 BUREAU OF INTERNAL REVENUE SYSfEMS:

"
4l

.
4~
,"

.,
SEC. 27. Seelion 237 of the Natiotullinternal Revenue Code (NIRC) of 1997.
amended. is hereby further amended 10 read as follows:
III!
 I SEC. 237. p.au,nce of Receipts or sale. or COmmercial
2 invoice . ) ELECTRONIC RECEIPTS OR ELECTRONIC SALES OR

,,
J COMMERCIAL INVOICES. -

6 IAI ISSUANCE.. All perllOns subject to an Internal revenue taX !!hall,

7 for each sale or lmnsfer of merchandise or for services rendered
8 vsluM at TIA.~ntylive pesos (P25.001 or more, iSllue duly regi!!tered
9 ELECTRONIC receipLS or ELECTRONIC 8Ilies or CQmmerciai
10 invo":es, (prepared at leo!!t in duplicate.) showing the date of
II lran8action, quantity. unit cost and description of merchandise or
12 fUltUn: at service: Provided, h~r, That in the case of sales.
IJ rca:lptll or lnInsfcrs III the amount of O ne hundred peSO!!
I~ (PIOO.OO) or man:. or regardless of amount, when: the sale or
15 transfer is made by B person liable to valueadded tax to another
16 pC'f'SOn 01110 liable to value-added tax; or when: the ELECTRONIC
17 receipt isl!lSued to cover payment made 8J!I rentals. commissions,
18 compensations or fet!s, ELECTRONIC receipts or ELECTRONIC
19 invoices shall be issued which shall shaw the name. busint!ls
20 style, if any. and addre!! of the purchaser IS a VATregistered
21 pC'rson. In addItion to the information herein required , the
22 ELECTRONIC invoice or E.LECTRONIC receipt shall funher show
2J the TBJCpayer Identification Number rrlN) of the purchaxr.
24 PROVIDED. FURTHER, THAT, THE ISSUANCE TO THE BUYER
Z!i OF AN ELECTRONIC RECElPI' OR ELECTRONIC INVOICE SHALL
26 BE ACCOMPUSHED EITHER ELECTRONICALLY OR BY
27 TENDERING A PRINTED COP'{ THEREOF.

"
29
30
IB)TRANSMISSION.
NOTWITHSTANDING, AN
THE PRECEDING
ELECTRONIC
PARAGRAPH
RECEIPT OR
31 ELECTRONIC INVOICE, AS THE CASE MAYBE, SHALL BE.
31 TRANSMITIED DIRECTLY TO THE BUREAU OF INTERNAL
33 REVENUe: (BIR) AT THE SAME TIME AND DATE OF EACH SALE
34 TRANSACTION

"
J6
31
38 SEC. 28. A new section deSIgnated all Seetio" 237A under Chapter II Title
39 IX or !.he National Internal RC\'enue Code (NIRq of 1997. as amended, is
40 insened to read as follows:

""
.,"
.
~ SEC. 237-A. ELECTRONIC SALES REPORTING SYSTEM. _

47 A. CREATION. - THE BUREAU SHALL CREATE AN ELECTRONIC

~8 SYSTEM THAT WILL WNK SALE:S AND PURCHASE DATA
49 ENTERED ON CASH REGISTER/POINT-OFSALES MACH INES


I (CRM/POS MACHINES) OF VAT-REGISTERED TAXPAYERS TO

2 THE BUREAU'S SERVERS FOR SIMULTANEOUS REPORTING OF
J SALES AND PURCHASE DATA .
$ VAT-REOISTERED TAXPAYERS SHALL ACQUIRE CRMjPOS
6 MACHINES AND SECURE SAID MACHINES' LINKAOE TO THE
1 SIR'S SERVERS AT THEIR EXPENSE. THEY SHAL.L LI KEWISE
8 ENSURE THAT THE CRM/POS MACHINES HAVE THE CAPACIn"
9 TO SIMULTANEOUSLY TRANSMIT DATA ENTERED ON THE
10 MACHINES TO THE SERVERS OF THE BUREAU OF INTERNAL.
II REVENUE.
12
13
I~ THE ESTABLISHMENT BY THE BUREAU OF THE ELECTRONIC
IS SYSTEM AND LlNKAOE THERETO BY VAT-RECISTERED
16 TAXPAYERS OF THEIR CRM / POS MACHINES SHALL BE DONE
17 WITHIN ONE (1) YEAR AND SIX 161 MONTHS FROM THE
18 EFFECTIVITY GFIHIS ACT_

"
20
21 B. ELECTRONIC INTERCONNECTIVITY WITH THE BUREAU OF
22 CUSTOMS (BOC). LAND TRANSPORTATION OFFICE )LTOj.
23 DEPARTMENT OF TRADE AND INDUSTRY (OTI), DEP.... RTMENT
2.\ OF AGRICULTURE (DAI , SECURITIES AND EXCHANGE
25 COMMISSION (SEC) ....ND OTHER APPROPRIATE GOVERNMENT
26 AGENCIES. - WITHIN ONE til YEAR AND SIX t6J MONTHS FROM
21 THE EFFECTIVITY OF THIS ACT, THE BUREAU SHALL
28 ESTABLISH ELECTRONIC [NTERCONNECTIVITY WITH THE BOC,
29 LTQ, DTI, DA, SEC AND OTHER APPROPRIATE GOVERNMENT
30 AGENCIES TO FURTHER ENHANCE THE REVENUE COLLECTION
3I EHORT OF OOVERNMENT .
II
Jl
)4 C. CONFIDENTIALITY OF TAXPAYER INFORMATION AND
3S COMPLIANCE WITH THE 'OATA PRIVACY ACT'. - THE
36 PROVISIONS OF SECTION "270 OF THE NATIONAL INTERNAL
31 REVENUE: CODE OF 1997, AS AMENDED, ON UNLAWFUL
)8 DIVULGENCE OF TAXPAYER INFORMATION SHALL BE STRICTLY
)9 COMPLIED WITH.

"
"
42
43
THE DATA PROCESSING OF SALES AND PURCHASE DATA
SH .... LL .... LSO COMPLY WITH THE PROVISIONS OF REPUBLIC ACT
44 NO.IOI730RTHE'DATAPRIVACYACT. -

.,""

.

I SEC. 29. A new section designated as section 264-A under Chapkr II Title
2 X of the National Inlernal Revenue Code (HIRe) of 1997. as amended, is
) inserted AS (olloWII:

S " SEC. 264-A. FAILURE TO LINK SALES AND PURCHASE DATA
6 ENTERED ON CRM / POS MACHINES TO THE 8lR' S SERVERS DUE
1 TO NEGLIGENCE OR lNTENT TO DEFRAUD THE GOVERNMENT. -
8

10 ANY VAT RE01STEREO TAXPAYER WHO FAILS TO UTILIZE
II CRM /POS MACHINES CONNECTED TO THE BUREAU'S SERVERS IN
12 THE TAXPAYER'S BUSINESS OPERATIONS / TRANSACTIONS DUE TO
13 NEGLIGENCE OR WITH INTENT TO DEFRAUD THE GOVERNMENT
14 SHALL PAY II PENALTI AMOUNTING TO ONE HALF OF ONE
IS PERCENT (1 / 2 OF 1%1 OF THE ANNUAL NET INCOME AS
16 REFLECTED IN THE VATRECISTERED TAXPAYER'S AUDITED
17 FINANCIAL STATEMENT FOR THE SECOND YEAR PRECEDING THE
18 CURRENT TAXABLE YEAR FOR EACH DAY Of' V10!J\TION;
19 PROVlDED, THAT PAYMENT OF THE PENALlY SHALL BE MADE
20 SIMULTANEOUSLY WITH THE PAYMENT FOR VAT ON A MONTHLY
21 BASIS AS PROVIDED IN SECTION II'! (A) OF THIS CODE;
22 PROVIDED, FURTHER, THAT SHOULD THE AGGREGATE NUMBER
23 OF DAYS OF VIOLATION EXCEED ONE-HUNDRED EIGHTY (\80)
24 DAYS WITHIN A TAXABLE YEAR, AN ADDITIONAL PENALTY OF
2S PERMANENT CLOSURE OF THE VAT REGJ5TERED TAXPAYER
26 SHALL BE IMPOSED.-
27

"
29
30
SEC. 30. A new section designated as Section 264 B under Chapter 11 Titie
X of the National Internal Revenue Code eNIRC) of 1997. as amended, is
31 inserted 10 read as follows :

"lJ
"
3'
16
SEC. 264 8 . AUTOMATED SALES SUPPRESSION DEVICES. -

31
38 CRIMINAL UABILITY SHALL BE INCURRED BY ANY PERSON WHO
]9 SHALL PURCHASE, USE, POSSESS, SELL OR Of'FER TO SELL,
40 UPDATE, UPGRADE, KEEP OR MAINTAIN ANY SOFiWAR E OR

.,
41 DEVICE DESIGNED FOR, OR IS CAPABLE Of':

"
4-1
'"
A. SUPPRESSING THE CREATION OF ELECTRONIC RECORDS
Of' SALE TRANSACTIONS THAT A TAXPAYER IS REQUIRED
<16 TO KEEP UNDER EXISTING TAX LAWS AN DjOR
47 REGULATIONS: OR


, B. MODIFYING, HIDING , OR DELETING ELECTRON IC

RECORDS OF' SALES TRANSACTIONS AND PROVIDING A
l READY MEANS OF ACCESS TO THEM.
,
6 ANY PERSON CONVICTED OF' A VIOLATION OF' THIS SECTION
7 SHALL BE PUNISHED BY A nNE OF' NOT LE:SS THAN TWO
8 HUNDRED THOUSAND PESOS (P200,OOO.OO) BUT NOT MORE THAN
9 FIVE HUNDRED THOUSAND PESOS (PSOO,OOO.OO) AND SUFFER
10 IMPRISONMENT OF NOT l.ESS THAN TWO (2) YEARS BUT NOT
II MORE THAN (4) YEARS,"
12
IJ
14 SEC. 31 . Section 288 of the National Internal Revenue Code of \997. as
I' amended, is he~by rurther amended to read as follows;

"
11
J8 "A. Xxx

"
20 B. Xxx

"
22 C. Xxx
2l
24 D. Xxx

"
26
27
E. Xxx

"29 F. ARMARJaNG OF INCREMENTAL REVENVES FROM THE

)0 TAX REFORM FOR ACCELERATION AND INCLUSION ACT.
31 FORTY PERCENT (40%) OF THE FIRST YEAR INCREMENTAL
)2 REVENUES GENERATED FROM THE PETROLEUM EXCISE
B TAX UNDER SECTION 21 OF'THIS ACT SHALL BE Au.ocATED
34 TO FUND HIGHLY TARGETED TRANSFER PROGRAMS AND
Jj SUBSIDIES TO PUBLIC UTIUTY VEHICLES FOR ONE YEAR
36 PROM THE EFFECTIVITY OF THIS ACT. AN INTER-AGENCY
37 COMMITIEE LED BY THE DEPARTMENT OF FINANCE, AND
38 COMPRISING THE DEPARTMENT OF SOCIAL WELFARE AND
39 DEVELOPMENT, DEPARTMENT OF' ENERGY, DEPARTMENT
40 OF BUDGET AND MANAGEMENT, AND THE NATIONAL
41 ECONOMIC DEVELOPMENT AUTHORITY SHALL PREPARE
42 THE TRANSFER PROGRAMS USING THE NATIONAL
41 HOUSEHOLD TARGETING SYSTEM FOR POVERTY
44 REDUCTION, AS THE BASIS, AS WELL AS THE SUBSIDY FOR
4j PUBLIC UTILITY VEHICLES.

"
47
48 THE REMAINING SIXTY PERCENT (60%1 OF THE FIRST YEAR
49 REVENUE, AND INCREMENTAL REVENUES IN SUCCEEDING

I YEARS SHALL BE ALI.OCATED FUR INFRASTRUCTURE,

, 2 HEALTH, EDUCATION,
EXPENDITURES.
AND SOCIAL PROTECTION

, 4

SEC. 3'2. Implemenl iny Rules und Regula/IOn. - The $e(;retary of Finance
6
7 shall, upon the recommendation of the Commissioner of Internal Reven ue,
9
p romulgate upon the e ffectivity o f this Act the nea:s!ll1l'Y Rules and
Regu lations for illl effective im plementation.
10

"1213 SEC. 33. Separability Clause. - If any provision of this Act is subsequently
declared invalid o r unconsbtutionaJ. other provillion6 hereof which are not
14 affected thereby shall remain in full force and eITccL
IS SEC. 31 , Repoolmg Clause. - The following LaWIi or provisions of Laws are
16 hereby repealed and the person! and/or tmnsaetions affected herein are
17 made subject to the valu e-added Tax subject to the provision of Ti tle IV of
18 the National Internal Revenue Code of J997 , Il9 amended:

"
20
21
22 (a) Section 9, wilh respect to Value-added Tax, or R.A. 951 I Dr the
2J National Grid Corponltion of the Philippines A!;t;
24

"
26
27
Ibl Articles 60 and 61 111 with respect te) the VAT, and Artide 6 1 (2Hb)
of R.A. 9520 or The PhiliPPine CooperatIVe Code 0( 2008;
18 (c) Section 9 of RA 10714 or the Credit Surety Fund Cooperauve Act
29 of20 15;

""3133 Id ) Section 4(al an d (b) and Section 19(01 of RA 9295 or the Domestic
Shipping Developme nt A!;I o f 2001;

"36
Jl
tel Section llta) and fbI of R.A. 10073 o r The Girl $(:Qut of the
37 Philippines ChaTter of 2009;
J8

"
10 IQ Section 221b) of RA 10747 or Rare Diseasell Act of the Philippines;
.,"
43 (g) Section 13 (I) a nd (2), wilh rcllpecl to Value-added 1M, or P.O.

.
44
'"

47
~8
1869 II. 1983 or the Franchise and Powers of The Philippine
Amusement and Gaming Corporation;

(hI Section 15lBJ of RA 9513 or the Renewable Energy Act of 2008;

49

49


I
2 Ii) Last paragraph of 5e(:tion 8 of RA 7278 or the Boy Seoul of the
,,
) Philippmes with n:sped to Value-add.ed tax; and

6 UI Section 16 (a) nnd {bt. and Seelion 17 {at of P.O. 972 I . 1976 or
7 The Coal Development Act of 1976, WIth respect to excise tax and

,
8

10
VAT.

Prcwided, further, the following special proVisions under specific laws are
,I hereby repealed:
12
13 (a) Section 33(/1.1 of R.A 7277, 85 amended by R./!.. 10754 or the
1~ Magna CeI'Ul for Persons with DLsabihues;
"16 (hI Section 22{B) ofR.A. 10165 or the Foster Can: Act of2012; and
17
18 (e) Section -4 or RA 1169 or "An Act Providing For Chari ty
19 Sweepstakes, Horse Rac;es and Lotteries",
20
21
22 AU other JaWI!, aeu, presidenl.ial dec::rees, executive orders, lS!luan~lI.
23 presidential proclamations, rules and regulations or parUi thereof, which are
24 contrary to and inconSistent WIth any proviSions of thiS Act are hereby
2!1 repealed , amended Dr modified accordingly.

" 27
28 SEC. 35. EJfeawil1l Clause. - This Act shall wke effect fifteen (15) days after
29 ila complete publication in the Official Qaxeue or in at least two (2)
30 newspapers of genem.1 cin;ulation.

"
)2
J) Approved.

"