AN ACT REVISING AND CONSOLIDATING THE LAWS RELATIVE TOM INTERNAL REVENUE.

• Number: Act No. 2339
• Sections: 189

Preamble

By authority of the United States, be it enacted by the Philippine Legislature, that:

PRELIMINARY CHAPTER.

THE BUREAU OF INTERNAL REVENUE.

NTERNAL-REVENUE TAXES.

ADMINISTRATIVE PROVISIONS.

REMEDIES.

PENAL PROVISIONS.

FINAL PROVISIONS

Section 1 Short title of this Act.

SECTION 1. Short title of this Act.—This Act may be referred to as The Internal Revenue Law of Nineteen hundred and fourteen.

Section 2 Chief officials of Bureau of Internal Revenue.

SEC. 2. Chief officials of Bureau of Internal Revenue.— The Bureau of Internal Revenue shall have one chief and one assistant chief appointed by the Governor-General, with the advice and consent of the Philippine Commission, and known respectively as Collector of Internal Revenue and Deputy Collector of Internal Revenue.

Subject to the supervision of the Secretary of Finance and Justice, the Collector of Internal Revenue shall have general authority in all matters, and shall see to the enforcement of all laws and regulations, embraced within the jurisdiction of the Bureau or relating to the operation thereof.

Section 3 City assessor and collector of Manila.

SEC. 3. City assessor and collector of Manila.—The Collector of Internal Revenue shall be ex officio city assessor and collector of Manila and as such shall collect all its municipal revenues and shall perform in and for said city the duties imposed by this law on provincial treasurers generally.

Section 4 Powers and duties of Bureau.

SEC. 4. Powers and duties of Bureau.—The powers and duties of the Bureau of Internal Revenue shall comprehend the collection of all taxes, fees, and charges specified in and allowable under this Act, and the enforcement of all forfeitures, penalties, and fines sanctioned by the same.

Said Bureau shall also give effect to and administer the supervisory and police powers of this Act and enforce any other law or parts of laws specifically placed under its jurisdiction.

Section 5 Regulations of the Bureau of Internal Revenue.

SEC. 5. Regulations of the Bureau of Internal Revenue.— The Collector of Internal Revenue shall have the power, and it shall be his duty, to make regulations, not inconsistent with law, necessary to carry this Act into full effect and to secure an harmonious and efficient administration of his branch of the service. Such regulations may be either general or local in application and shall become effective as law when approved by the Department head and published.

Section 6 Specific provisions to be contained in regulations.

SEC. 6. Specific provisions to be contained in regulations.—The Regulations of the Bureau of Internal Revenue shall, among other things, contain provisions specifying, prescribing, or defining:

(a) The time and manner in which provincial treasurers shall canvass their provinces for the purpose of discovering persons and property liable to internal-revenue taxes, and the manner in which their lists of taxable persons and tax- able objects shall be made and kept.

(b) The forms of labels, brands, or marks to be required on goods subject to a specific tax and the manner in which the labeling, branding, or marking shall be effected.

(c) The conditions under which and the manner in which goods intended for export, which if not exported would be subject to a specific tax, shall be labeled, branded, or marked.

(d) The conditions to be observed by revenue officers, provincial fiscals, and other officials respecting the institution and conduct of legal actions and proceedings.

(e) The manner in which persons authorized to have and keep prohibited drugs shall keep their records relating to the same.

(f) The conditions under which opium may be imported, the manner of its storage and removal for use, as well as the manner in which the same shall be marked or labeled prior to removal.

(g) The conditions under which prohibited drugs may be transferred from the possession of persons authorized to have and keep the same to the possession of other persons similarly authorized.

(h) The conditions under which goods intended for storage in bonded warehouses shall be conveyed thither, their manner of storage, and the method of keeping the entries and records in connection therewith; also the books to be kept by storekeepers and the reports to be made by them in connection with their supervision of such houses.

(i) The conditions under which alcohol intended for use in the arts and industries may be withdrawn free of tax, and dealt in, the character and quantity of the denaturing material to be used, the manner in which the process of denaturing shall be effected, the bonds to be given, the books and records to be kept, the entries to be made therein, the reports to be made to the Collector of Internal Revenue, and the signs to be displayed in the business or by the person for whom such denaturing is done or by whom such alcohol is dealt in.

(j) The manner in which revenue shall be collected and paid, the instrument, document, or object to which revenue stamps shall be affixed, the mode of cancellation of the same, the manner in which the proper books, records, invoices, and other papers shall be kept and entries therein made by the person subject to the tax, as well as the manner in which licenses and stamps shall be gathered up and returned after serving their purpose.

(k) Prohibitions relative to the size, style, subject-matter, and location of signs, signboards, billboards, and other forms of outdoor advertising, and the conditions precedent to securing a license to erect or display such signs, signboards, and billboards.

Section 7 Power of Collector of Internal Revenue to fix bonds.

SEC. 7. Power of Collector of Internal Revenue to fix bonds.—The Collector of Internal Revenue shall, consistently with the law, prescribe the form and fix the amount of all bonds executed by private parties to the Government under the laws pertaining to his Bureau and shall pass on the sufficiency of the security and retain possession of the bond.

Section 8 Forms, certificates, and appliances supplied by l the Collector of Internal Revenue.

SEC. 8. Forms, certificates, and appliances supplied by l the Collector of Internal Revenue.—It shall be the duty of the Collector of Internal Revenue, among other things, to prescribe, provide, and distribute to the proper officials the requisite licenses, cedula forms, internal revenue stamps, and labels or tags used in sealing weights and measures, and all other forms, certificates, bonds, records, invoice books, instruments, appliances and apparatus used in administering the laws under the jurisdiction of the Bureau.

Section 9 Agents and deputies for collection of internal revenue.

SEC. 9. Agents and deputies for collection of internal revenue.—For the collection of the internal revenue on imported articles the Insular Collector of Customs and his subordinates are constituted agents of the Collector of Internal Revenue; and the provincial treasurers, their deputies, and employees shall be his deputies for the collection of other internal revenue and the enforcement of all laws within the jurisdiction of the Bureau.

For economy or effectiveness in the collection of the cedula tax, the Collector of Internal Revenue may authorize the provincial treasurer of any province to appoint, for the first four months of the year only, special deputies to collect such tax, at a rate of compensation not greater than ten centavos for each tax collected and certificate issued.

Section 10 Expenses of collection to be borne by provinces.

SEC. 10. Expenses of collection to be borne by provinces.—The expenses incurred by the provincial and municipal authorities in collecting taxes and in enforcing the laws under the jurisdiction of the Bureau of Internal Revenue, including expenses incurred in appearing in the courts in internal-revenue cases, shall be borne by the respective provinces; but the city of Manila shall be liable only for such expenses as are incident to the collection of internal-revenue and other taxes in and for that city, and for such expenses the Insular Government shall be reimbursed.

Section 11 Internal-revenue inspection districts.

SEC. 11. Internal-revenue inspection districts.—With the approval of the Department head, the Collector of Internal Revenue shall divide the Philippine Islands into such number of inspection districts as may from time to time be required for administrative purposes. Each of these districts shall be in charge of an internal-revenue agent.

Section 12 Duties of internal-revenue agents.

SEC. 12. Duties of internal-revenue agents.—It shall be the duty of every internal-revenue agent to see that all laws and regulations relative to the collection of internal-revenue taxes are faithfully executed and complied with, to aid in the prevention, detection, and punishment of any frauds or delinquencies in connection therewith, and to examine into the efficiency of all officers and employees of the Bureau of Internal Revenue. He shall report in writing to the Collector of Internal Revenue any neglect of duty, incompetency, delinquency, or malfeasance in office of any internal-revenue officer of which he may obtain knowledge, with a statement of all the facts in each case and any evidence sustaining the same. He may, by notice in writing, suspend from duty any storekeeper, and in such case he shall immediately notify the Collector of Internal Revenue and within three days thereafter report his action and his reasons therefor in writing to said Collector.

Should any revenue agent discover any neglect, incompetency, delinquency, or malfeasance of any provincial treasurer in the performance of his duty as a collector of internal revenue, he shall immediately report the facts to the Collector of Internal Revenue in writing.

Section 13 Authority of agent's assistant.

SEC. 13. Authority of agent's assistant.—An agent's assistant in any district may, in the name of the internal-revenue agent in charge of such district and under the control of such officer as his principal, exercise any power or perform any act which might be exercised or performed by such internal-revenue agent himself.

Section 14 Assignment of storekeepers to warehouses.

SEC. 14. Assignment of storekeepers to warehouses.—The Collector of Internal Revenue shall employ and assign to such bonded warehouses and manufacturers' warehouses as he shall deem expedient internal-revenue storekeepers, special

Section 15 Assignment of internal-revenue agents to special duties.

SEC. 15. Assignment of internal-revenue agents to special duties.—Internal-revenue agents may be assigned to duty under the direction of any officer of the Bureau of Internal Revenue and may be assigned to special duties other than those of internal-revenue agent proper.

Any officer or employee of the Bureau may be assigned to the duties of revenue agent without change of his official character or salary.

Section 16 Reports of violations of law.

SEC. 16. Reports of violations of law.—When a provincial or deputy provincial treasurer or an internal-revenue agent discovers evidence of the violation of any penal provision of this Act of such character that a criminal prosecution ought to be instituted, he shall immediately report the facts to the fiscal of the province, giving the name of the offender and the names of the witnesses, if possible. A duplicate of such report shall be sent to the Collector of Internal Revenue.

It shall also be the duty of officers and employees of the Bureau of Internal Revenue to report to the Bureau of Forestry any violations of the Forest Law within their knowledge. A duplicate of each such report shall be furnished to the Collector of Internal Revenue.

Section 17 Authority of internal-revenue officers to make arrests and seizures.

SEC. 17. Authority of internal-revenue officers to make arrests and seizures.—The Collector of Internal Revenue, the Deputy Collector of Internal Revenue, internal-revenue agents, and provincial treasurers and their deputies shall have authority to make arrests and seizures for violations of this Act or of regulations pursuant thereto. Any person so arrested shall be forthwith carried before a magistrate there to be dealt with according to law.

Section 18 Power of Collector of Internal Revenue in making Assessment of taxes. assessments.

SEC. 18. Power of Collector of Internal Revenue in making Assessment of taxes. assessments.—When a report required by this Act as a basis for the assessment of any tax shall not be forthcoming within the time fixed by law or regulation, or when there is reason to believe that any such report is false, incomplete or erroneous, the Collector of Internal Revenue shall assess the proper tax on the best evidence obtainable.

Section 19 Authority of officers to administer oaths and take testimony.

SEC. 19. Authority of officers to administer oaths and take testimony.—The Collector of Internal Revenue, the Deputy Collector of Internal Revenue, internal-revenue agents, and provincial treasurers and their deputies may administer oaths, summon witnesses, and take testimony in any official investigation conducted by them touching any matter within the jurisdiction of the Bureau.

Section 20 Contents of Collector's annual report.

SEC. 20. Contents of Collector's annual report.—The Annual report, annual report of the Collector of Internal Revenue shall contain a detailed statement of the collections and disbursements of the Bureau with specifications of the sources of revenue and classes of disbursements.

Section 21 Sources of taxes.

SEC. 21. Sources of taxes.—The following taxes, fees, fees, etc. and charges in the nature of tax are deemed to be internal-revenue taxes:

(a) The cedula tax;

(b) The documentary tax;

(c) The privilege taxes on business and occupation;

(d) Specific taxes on manufactured products;

(e) Taxes on resources of banks, receipts of insurance companies, and receipts of corporations paying a franchise tax;

(f) Charges for forest products;

(g) Fees for testing and sealing weights and measures;

(h) Internal revenue, including the income tax, collected in the Philippine Islands under laws enacted by the Congress of the United States;

(i) Taxes on signs, signboards, and billboards.

Section 22 —Persons liable to cedula tax.

SEC. 22.—Persons liable to cedula tax.—An annual internal-revenue cedula tax shall be paid by all male inhabitants of the Philippine Islands over the age of eighteen and under sixty with the following exceptions:

(a) Commissioned officers of the United States Army or Navy;

(b) Enlisted soldiers, sailors, and marines of the United States Army or Navy;

(c) Civilian employees of the military or naval branches of the United States Government who have come to the Philippine Islands under orders of the Government of the United States;

(d) Diplomatic and consular representatives and officials of foreign powers;

(e) Paupers;

(f) Insane persons;

(g) Imbeciles;

(h) Persons serving a sentence of more than one year in a public prison;

(i) Such inhabitants of Batanes, Mindoro, and Palawan as are subject to the road tax;

(j) Members of non-Christian tribes, subject to the qualification stated in the next section.

Section 23 Liability of non-Christian people to cedula tax.

SEC. 23. Liability of non-Christian people to cedula tax.—Except in the Department of Mindanao and Sulu, members of non-Christian tribes shall pay the cedula tax herein prescribed; unless the provincial board, with the approval of the Secretary of the Interior, shall by resolution exempt them, in which case copy of said resolution shall be furnished the Collector of Internal Revenue, amount.

Section 24 Amount of the cedula tax.

SEC. 24. Amount of the cedula tax.—The cedula tax shall be one peso; but in the city of Manila and in provinces organized under the Provincial Government Act it may, by resolution of the respective municipal board or provincial board, for said city or province, be increased to two pesos. Where such increase is effected it shall remain in force until abrogated for one or more years by resolution of the board, either with the express approval of the Governor-General or upon the expiration of thirty days after the receipt by him of such resolution, without his disapproval.

A copy of any resolution increasing or reducing the cedula tax in a province shall be furnished by the provincial treasurer to the Collector of Internal Revenue.

Section 25 Increase of lax in case of delinquency.

SEC. 25. Increase of lax in case of delinquency.—Upon delinquency the cedula tax to which any person is liable shall be double.

Section 26 Time for payment of cedilla tax; when delinquency occurs.

SEC. 26. Time for payment of cedilla tax; when delinquency occurs.—Liability for the cedula tax accrues on the first of January of each year as regards persons then resident in the Islands and liable to the tax; and if a person so liable fails to pay the tax before the first of May he shall be delinquent. As regards those who come to reside in the Islands prior to the first of July and those who reach the age of eighteen or otherwise lose the benefit of exemption prior to that date, liability shall attach upon the day of arrival or upon the day exemption ceases, and if arriving or becoming liable on or before the tenth of April they shall likewise be delinquent upon failure to pay the tax before the first of May, but such persons, arriving or becoming liable after the tenth of April, shall have twenty days within which to pay the tax without becoming delinquent.

Persons who come to reside in the Islands or arrive at the age of eighteen years on or after the first of July of any year or who cease to belong to an exempt class on or after the same date shall not be subject to the tax for such year.

When the public interests so require, the provincial board extension, of any province may, by resolution, with the approval of the Governor-General, extend the time for the payment of the cedula tax without the consequences of delinquency for a period not exceeding three months in any year.

Section 27 Payment of cedula tax in province other than payment in another that of domicile.

SEC. 27. Payment of cedula tax in province other than payment in another that of domicile.—A person temporarily absent from the province of his domicile may pay the cedula tax in any province where he is sojourning; but such payment in a province where the tax is one peso shall not remove liability for the additional peso to which the taxpayer may be subject in the province of his domicile.

Section 28 Presentation of cedula certificate upon certain occasions.

SEC. 28. Presentation of cedula certificate upon certain occasions.—When a person liable to the cedula tax offers himself for registration as a qualified voter, acknowledges any document before a notary public, takes the oath of office upon election or appointment to any position in the Government service, receives any license, certificate, or permit from any public authority, pays any tax, receives any money from any public fund, or transacts other official business, it shall be the duty of the officer or person with whom such transaction is had or business done to require the exhibition of the certificate showing the payment of the cedula tax by such person. Such certificate shall be the one issued for the current year, except during the month of January of each year and except also in the case of the payment of the cedula tax at any time during the year, in which cases the exhibition of the certificate for the previous year shall suffice.

Section 29 Secondary certificate in lieu of lost cedula certificate.

SEC. 29. Secondary certificate in lieu of lost cedula certificate.—When a cedula certificate is accidentally lost or destroyed, a secondary certificate showing the number of the original certificate and its date, together with the other information contained therein, shall be supplied to the taxpayer upon affidavit showing such loss or destruction. This secondary certificate may be used in lieu of the original certificate for all purposes.

Section 30 Stamp tax upon documents and papers.

SEC. 30. Stamp tax upon documents and papers.—Upon -stamp taxes, documents, instruments, and papers, and upon acceptances, assignments, sales, and transfers of the obligation, right, or property incident thereto documentary taxes for and in respect of the transaction so had or accomplished shall be paid as hereinafter prescribed, by the person making, signing, issuing, accepting, or transferring the same, and at the time such act is done or transaction had :

(a) On all bonds, debentures, and certificates of indebentures, debtedness issued by any association, company, or corporation, on each two hundred pesos or fractional part thereof, of the face value of such document, twenty centavos;

(b) On every original issue, whether on organization or

on reorganization, of certificates of stock by any such association, company, or corporation, on each two hundred pesos, or fractional part thereof, of the face value of such certificate, twenty centavos;

(c) On all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of shares or certificates of stock in any association, company or corporation, or transfer by assignment in blank, or by delivery, or by any paper, or agreement, or memorandum, or other evidence of transfer or sale, whether entitling the holder in any manner to the benefit of such stock, or to secure the future payment of money, or for the future transfer of any stock, on each two hundred pesos, or fractional part thereof, of the par value of such stock, four centavos;

(d) On all bonds debentures, certificates of stock, or certificates of indebtedness issued in any foreign country there shall be paid by the person here selling or transferring the same, such tax as is required by law on similar instruments when issued, sold, or transferred in the Philippine Islands;

(e) On all certificates of profits, or any certificate or memorandum showing interest in the property or accumulations of any association, company, or corporation, and on all transfers of such certificates or memoranda, on each two hundred pesos, or fractional part thereof, of the face value of such certificate or memorandum, two centavos;

(f) On each check, draft, or certificate of deposit, not drawing interest, or order for the payment of any sum of money drawn upon or issued by any bank, trust company, or any person or persons, companies, or corporations, at sight or on demand, two centavos;

(g) On all bills of exchange (between points within the Philippine Islands), drafts, and certificates of deposit drawing interest, or orders for the payment of any sum of money otherwise than at sight or on demand, and on all promissory notes, except bank notes issued for circulation, and on each renewal of any such note, on each two hundred pesos or fractional part thereof, of the face value of any such bill of exchange, draft, certificate of deposit, or note, two centavos;

(h) Upon any acceptance or payment upon acceptance of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippine Islands, on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange or order, or the Philippine equivalent of such value, if expressed in foreign currency, two centavos;

(i) On all foreign bills of exchange and letters of credit (including orders, by telegraph or otherwise, for the payment of money issued by express or steamship companies or by any person or persons) drawn in but payable out of the Philippine Islands, in a set of three or more according to the custom of merchants and bankers, on each two hundred pesos, or fractional part thereof, of the face value of any such bill of exchange or letter of credit, or the Philippine equivalent of such face value, if expressed in foreign currency, four centavos;

(j) On all policies of insurance, or other instruments by life insurance, whatever name the same may be called, whereby any insurance shall be made or renewed upon any life or lives, on each two hundred pesos, or fractional part thereof, of the amount insured by any such policy, ten centavos;

(k) On all policies of insurance or other instruments by whatever name the same may be called, by which insurance shall be made or renewed upon property of any description, including rents or profits, against peril by sea or on inland waters, or by fire or lightning, on each four pesos, or fractional part thereof, of the amount of premium charged, two centavos;

(l) On all policies of insurance or bonds or obligations of the nature of indemnity for loss, damage, or liability made or renewed by any person, association, company, or corporation transacting the business of accident, fidelity, employer's liability, plate glass, steam boiler, burglar, elevator, automatic sprinkler, or other branch of insurance (except life, marine, inland, and fire insurance), and on all bonds, undertakings, or recognizances conditioned for the performance of the duties of any office or position, for the doing or not doing of anything therein specified, and on all obligations guaranteeing the validity or legality of any bonds or other obligations issued by any province, municipality, or other public body or organization, and on all obligations guaranteeing the title to any real estate, or guaranteeing any mercantile credits, which may be made or renewed by any such person, company, or corporation, on each four pesos, or fractional part thereof, of the premium charged, two centavos;

(m) On all policies of annuities, or other instruments by whatever name the same shall be called, whereby an annuity may be made, transferred, or redeemed, on each two hundred pesos, or fractional part thereof, of the capital of the annuity, or should this be unknown, then on each two hundred pesos, or fractional part thereof, of thirty-three and one-third times the annual income, ten centavos;

(n) On each bond for indemnifying any person, firm, or corporation who shall become bound or engaged as surety for the payment of any sum of money or for the due execution or performance of the duties of any office or position or to account for money received by virtue thereof, and on all other bonds of any description, except such as may be required in legal proceedings or are otherwise provided for herein, fifty centavos;

(o) On each certificate of damage, or otherwise, and on certificates, every other certificate or document issued by any customs officer, marine surveyor, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law, or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, twenty centavos ;

(p) On each warehouse receipt for property held in receipts, storage in a public or private warehouse or yard for any other person than the proprietor of such warehouse or yard himself or some employee of his engaged in and about the same, twenty centavos;

(q) On each set of bills of lading or receipts (except charter party) for any goods, merchandise, or effects of greater value than five pesos, to be exported from a port in the Philippine Islands to any foreign port, ten centavos;

(r) On each set of bills of lading or receipts (except charter party) for goods, merchandise, or effects of greater value than five pesos shipped from one port or place in the Philippine Islands to another port or place in said Islands, four centavos;

(s) On each passage ticket or any receipt for money paid for passage on any vessel other than on a vessel belonging to the Insular Government or the Government of the United States from any port in the Philippine Islands to a port in the United States or to any foreign port:

1. If said passage costs not more than sixty pesos, one peso;

2. If said passage costs more than sixty pesos and not

more than one hundred and twenty pesos, two pesos;

3. If said passage costs more than one hundred and

twenty pesos, three pesos;

(t) On each proxy for voting at any election for officers of any incorporated company or association, except associations or corporations for religious, charitable or literary purposes or to manage public cemeteries, twenty centavos;

(u) On each power of attorney to perform any act whatsoever, except acts connected with the collection of claims due from or accruing to the Government of the United States, the Government of the Philippine Islands, or the government of any province or municipality, twenty centavos;

(v) On each lease, agreement, memorandum, or contract for the hire, use, or rent of any lands or tenements, or portions thereof:

1. If executed for not more than one year, twenty centavos;

2. If executed for more than one year, and not more than three years, fifty centavos;

3. If executed for a period of more than three years, one peso;

(w) On every mortgage or pledge of lands, estate, or property, real or personal, heritable or movable, whatsoever, where the same shall be made as a security for the payment of any definite and certain sum of money lent at the time or previously due and owing or forborne to be paid being payable, and on any conveyance of land, estate, or property whatsoever in trust or to be sold or otherwise converted into money, which shall be and intended only as security, either by express stipulation or otherwise:

1. When the amount for which the mortgage or deed of trust is given is not less than one thousand pesos nor more than three thousand pesos, fifty centavos;

2. On each three thousand pesos, or fractional part thereof, in excess of three thousand pesos, an additional tax of fifty centavos;

conveyances.

(x) On all conveyances, deeds, instruments, or writings, other than grants, patents, or original certificates of adjudication issued by the Government, whereby any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to the purchaser or purchasers, or to any other person or persons designated by such purchaser or purchasers:

1. When the true consideration, or value received or contracted to be paid for such realty, after making proper allowance for any incumbrance, is more than two hundred pesos but not more than two thousand pesos, fifty centavos;

2. For each additional one thousand pesos, or fractional part thereof, of such true consideration or value, fifty centavos.

When it appears that the amount of the documentary tax payable hereunder has been reduced by an incorrect statement of the consideration in any conveyance, deed, instrument, or writing subject to such tax, the Collector of Internal Revenue, provincial treasurer, or other revenue officer shall, from the assessment rolls or other reliable source of information, assess the property at its true market value and collect the proper tax thereon.

(y) On every charter party, contract, or agreement for parties, the charter of any ship, vessel, or steamer, or any letter or memorandum or other writing between the captain, master, or owner, or other person acting as agent of any ship, vessel, or steamer and any other person or persons for or relating to the charter of any such ship, vessel, or steamer, and on any renewal or transfer of such charter, contract, agreement, letter or memorandum:

1. If the registered gross tonnage of the ship, vessel,

or steamer is not more than three hundred tons, six pesos;

2. If the registered gross tonnage is more than three hundred tons but not more than six hundred tons, ten pesos;

3. If the registered gross tonnage is more than six hundred tons, twenty pesos;

(z) Upon each and every assignment or transfer of any mortgage, lease, or policy of insurance, or the renewal or continuance of any agreement, contract or charter by altering or otherwise, a stamp tax shall be levied, collected, and paid at the same rate as that imposed on the original instrument.

Section 31 Documents and papers not subject to stamp tax.

SEC. 31. Documents and papers not subject to stamp tax.—The following instruments, documents and papers shall be exempt from the documentary stamp tax:

(a) Bonds, debentures and certificates of indebtedness Government bonds, issued by the Insular Government or any provincial or e e' municipal government.

(b) Checks, drafts, warrants, and bills of exchange issued in payment of any debt, obligation, or liability, or in fulfillment of any contract of the Government of the United States, or the Insular Government, or of a provincial or municipal government.

(c) Policies of insurance or annuities made or granted by a fraternal or beneficiary society, order, association, or cooperative company, operated on the lodge system or local cooperation plan, and organized and conducted solely by the members thereof for the exclusive benefit of its members and not for profit.

(d) Certificates of oaths administered to any government official, in his official capacity, or of acknowledgment by any government official in the performance of his official duties; written appearances in any court by any government official, in his official capacity; certificates of the administration of oaths to any person as to the authenticity of any paper required to be filed in court by any person or party thereto, whether the proceedings be civil or criminal; papers and documents filed in courts for the military, naval, Insular, provincial, or municipal governments, whether civil or criminal; affidavits of poor persons for the purpose of proving poverty; statements and other compulsory information required of persons or corporations by rules and regulations of the military, naval, Insular, provincial, or municipal governments exclusively for statistical purposes and which are wholly for the use of the Bureau in which the same are filed, and not at the instance of, or for the use or benefit of, the person filing the same; certified copies and other certificates placed upon documents, instruments, and papers for the military, naval, Insular, provincial, or municipal governments, made at the instance and for the sole use of some other branch of the military, naval, Insular, provincial, or municipal governments; and certificates of the assessed value of lands, not exceeding two hundred pesos in value assessed, furnished by provincial or municipal treasurers to applicants for registration of title to land.

When any bond, note, or other obligation is secured by a mortgage, pledge, deed of trust, or by the assignment or transfer of any documentary security, one tax only shall be collected upon such papers, such tax to be at the highest rate imposed on such mortgage, bond, note, obligation or other document as the case may be.

Section 32 Payment of documentary stamp tax; cancellation of stamp.

SEC. 32. Payment of documentary stamp tax; cancellation of stamp.—Documentary taxes shall be paid by the purchase and affixture of documentary stamps to the document or instrument taxed or to such other paper as may be indicated by law as the proper recipient of the stamp, and by the subsequent cancellation of the same, such cancellation to be accomplished by writing or stamping the date across the face of the stamp in such manner that part of the writing or impression shall be on the stamp itself and part on the paper to which it is attached.

When the evidence of a sale or transfer is shown only on the books of a company the stamp shall be affixed to such books; and in case the change of ownership is by transfer of certificates the stamp shall be affixed to the certificate; and in case of an agreement to sell, or when the transfer is by delivery of the certificate assigned in blank, there shall be made and delivered by the seller to the buyer a bill or memorandum of such sale to which the stamp shall be affixed; and every such bill or memorandum of sale, or agreement to sell, shall show the date thereof, the name of the seller and of the purchaser, the amount of the sale, and matter or thing to which it refers.

Section 33 Effect of failure to stamp taxable document.

SEC. 33. Effect of failure to stamp taxable document.—An instrument, document, or paper which is required by law to be stamped and which has been signed, issued, accepted, or transferred without being duly stamped shall not be recorded, nor shall it or any copy thereof or any record of transfer of the same be admitted or used in evidence in any court until the requisite stamp or stamps have been affixed thereto.

Section 34 Privilege taxes on business and occupation.

SEC. 34. Privilege taxes on business and occupation.— Business and o«u-A privilege tax must be paid before any business or occupation hereinafter specified can be lawfully begun or pursued. The tax on business is payable for every separate or distinct establishment or place where business .subject to the tax is conducted; and one occupation or line of business does not become exempt by being conducted with some other occupation or business for which such tax has been paid.

On some sorts of business the tax is in a fixed amount, while on other sorts of business it is reckoned at a certain rate per cent on the amount of business transacted. The occupation tax is in a fixed amount in all cases.

The occupation tax must be paid by each individual en- -by whom payable, engaged in a calling subject thereto; the tax on a business, by the person, firm, or company conducting the same.

Section 35 Legality of business as affected by payment of tax.

SEC. 35. Legality of business as affected by payment of tax.—The payment of a business or occupation tax shall not exempt any person from any tax, penalty, or punishment provided by law or ordinance in places where such business or occupation is prohibited or regulated by municipal law, nor shall the payment of any such tax be held to prohibit any municipality from placing a tax upon the same business or occupation, for local purposes, where the imposition of such tax is authorized by law.

Section 36 Time for payment of fixed taxes.

SEC. 36. Time for payment of fixed taxes.—The yearly time for payment-fixed taxes are due on the first of January of each year and, if tendered in quarterly installments on or before the twentieth of January, April, July, and October, or on or before the last day of said months, in remote provinces, in the discretion of the Collector of Internal Revenue, shall be received without penalty. But any person first beginning a business or occupation must pay the tax before engaging therein.

Section 37 Reckoning tax for business first begun or abandoned during year.

SEC. 37. Reckoning tax for business first begun or abandoned during year.—When an occupation or business subject to a fixed tax is newly begun during any year the tax shall be reckoned from the commencement of the current quarter, or in case of a business subject to a monthly tax, from the first of the month; and when either is at any time abandoned, the tax shall not be exacted for a longer period than to the end of the quarter or month, as the case may be.

Section 38 Initiatory tax upon business.

SEC. 38. Initiatory tax upon business.—Every person engaging in a business on which the percentage tax is imposed shall pay a fixed initiatory tax of two pesos, and if his receipts fall below the minimum limit for the percentage tax the business may, without further tax, be continued free of charge. But the amount of his business must, in any case, be reported quarterly as required in the next succeeding section.

Section 39 Payment of percentage taxes; quarterly report of earnings.

SEC. 39. Payment of percentage taxes; quarterly report of earnings.—The percentage taxes on business shall be payable at the end of each calendar quarter in the amount lawfully due on the business transacted during each quarter; and it shall be the duty of every person conducting a business subject to such tax, within the first twenty days earnings, of the succeeding quarter, to make a true and complete return of the amount of the receipts or earnings of his business during the preceding quarter.

If the percentage tax on any business is not paid within twenty days after the same becomes due the amount of the tax shall be increased by twenty-five per cent, the increment to be a part of the tax.

Section 40 Percentage tax on merchants sales.

SEC. 40. Percentage tax on merchants sales.—All merchants not herein specifically exempted shall pay a tax of one-third of one per cent on the gross value in money of the commodities, goods, wares, and merchandise sold, bartered, or exchanged by them, such tax to be based on the actual selling price or value at which the things in question are disposed of, whether consisting of raw material or of manufactured or partially manufactured products, and whether of domestic or foreign origin.

Butchers, bakers, and persons engaged in public market places in the sale of domestic food products at retail, and other small merchants whose gross quarterly sales do not exceed one hundred and twenty-five pesos are exempt from this tax.

"Merchant," as here used, means a person engaged in the sale, barter, or exchange of personal property of whatever character. Except as specially provided, the term includes manufacturers who sell articles of their own production and commission merchants having establishments of their own for the keeping and disposal of goods of which sales or exchanges are effected, but does not include merchandise brokers.

Section 41 Sales not subject to merchants tax.

SEC. 41. Sales not subject to merchants tax.—In computing the tax above imposed transactions in the following commodities shall be excluded:

(a) Merchandise actually exported by the vendor;

(b) Things, other than opium, subject to a specific tax;

(c) Agricultural products when sold by the producer or owner of the land where grown, whether in their original state or not.

Section 42 Percentage tax on printers and publishers.

SEC. 42. Percentage tax on printers and publishers.— Printers and publishers shall pay a tax equivalent to one-third of one per cent of their gross receipts; but persons engaged in the publication or printing and publication of any newspaper, magazine, review, or bulletin appearing at regular intervals and having fixed prices for subscription and sale shall not be taxed on receipts from sales of, subscription to, or advertisements in such publication; but this exemption shall not apply to any publication the principal purpose of which is the publication of advertisements.

Section 43 Percentage tax on contractors, warehousemen, and others.

SEC. 43. Percentage tax on contractors, warehousemen, and others.—Contractors, warehousemen, proprietors of dockyards, and persons selling light, heat, or power, as well as persons engaged in conducting telephone or telegraph lines, or exchanges, and keepers of hotels and restaurants shall pay a tax equivalent to one-third of one per cent of their gross receipts.

Section 44 Percentage tax on carriers and keepers of stables and garages.

SEC. 44. Percentage tax on carriers and keepers of stables and garages.—Keepers of livery stables and garages, transportation contractors, persons who transport passengers or freight for hire, and common carriers by land or water, except owners of boats taxed under the laws administered by the Bureau of Customs, shall pay a tax equivalent to one per cent of their gross receipts when the same exceed two hundred and fifty pesos a quarter.

Section 45 Amount of tax on business.

SEC. 45. Amount of tax on business.—Fixed taxes on Business taxes, business shall be collected as follows, the amount stated being for the whole year, when not otherwise specified:

(a) Distillers of spirits, two hundred pesos;

(b) Brewers, two hundred pesos;

(c) Rectifiers of distilled spirits, two hundred pesos;

(d) Manufacturers of tobacco, twenty pesos;

(e) Manufacturers of cigars, twenty pesos; (/) Wholesale liquor dealers:

1. In city of Manila, two hundred pesos;

2. In any other place, sixty pesos;

(g) Retail liquor dealers, forty-eight pesos;

(h) Retail vino dealers, eight pesos;

(i) Wholesale dealers in fermented liquors, sixty pesos;

(j) Retail dealers in fermented liquors, forty pesos;

(k) Retail tuba dealers, ten pesos;

(I) Wholesale tobacco dealers, twenty pesos;

(m) Retail tobacco dealers, eight pesos;

(n) Wholesale peddlers of manufactured tobacco, or of distilled, manufactured, or fermented liquor, or both, eighty pesos;

(o) Retail peddlers of manufactured tobacco, or of distilled, manufactured, or fermented liquor, or both, sixteen pesos;

(p) Peddlers of merchandise traveling from place to place, except peddlers of food stuffs and those whose stock in trade amounts to less than fifty pesos in value, eight pesos, to be refunded if thereafter they shall pay the merchants' tax for the quarter in a sum in excess of eight pesos;

(q) Proprietors of cockpits, two hundred pesos;

(r) Proprietors of theaters, museums, and concert halls:

1. In city of Manila, two hundred pesos;

2. In any other place, one hundred pesos; or, in this case, by the month, ten pesos;

(s) Proprietors of circuses giving exhibitions in one or more places or provinces, two hundred pesos;

(t) Proprietors of billiard rooms, for each table, ten pesos;

(u) Owners of race tracks, for each day on which races are run on any track, sixty pesos;

(v) Pawnbrokers, four hundred pesos;

(w) Stockbrokers, eighty pesos;

(x) Money lenders, eighty pesos;

(y) Real estate brokers, eighty pesos;

(z) Merchandise brokers, or corredores, eighty pesos;

(aa) Proprietors of shops for the repair of bicycles or vehicles of any kind, twenty pesos.

Section 46 Words and phrases defined.

SEC. 46. Words and phrases defined.—In applying the provisions of the preceding section words and phrases shall be taken in the sense and extension indicated below:

"Distiller of spirits" comprises all who distill spirituous liquors by original and continuous distillation from mash, wort, wash, sap, or sirup through continuous closed vessels and pipes until the manufacture thereof is complete.

"Brewer" comprises all persons who manufacture fermented liquors of any description for sale or delivery to others, but not including manufacturers of tuba, bassi, or tapuy, or similar domestic fermented liquors whose daily production does not exceed two hundred gauge liters.

"Rectifier" comprises every person who rectifies, purifies, or refines distilled spirits or wines by any process other than by original and continuous distillation from mash, wort, wash, sap, or sirup through continuous closed vessels and pipes until the manufacture thereof is complete. Every wholesale or retail liquor dealer who has in his possession any still or mash tub, or who keeps any other apparatus for the purpose of distilling spirits or in any manner refining distilled spirits, and every person who without rectifying, purifying, or refining distilled spirits shall, by mixing such spirits, wine, or other liquor with any materials except water, manufacture any intoxicating beverage whatever, shall also be regarded as a rectifier and as being engaged in the business of rectifying.

"Manufacturer of tobacco" includes every person whose business it is to manufacture tobacco or snuff, or who employs others to manufacture tobacco or snuff, whether such manufacture be by cutting, pressing, grinding, or rubbing any raw or leaf tobacco, or otherwise preparing raw or leaf tobacco or manufactured or partially manufactured tobacco and snuff or putting up for consumption scraps, refuse, or stems of tobacco resulting from any process of handling tobacco, or by working or preparing leaf tobacco, tobacco stems, scraps, clippings, or waste by sifting, twisting, screening, or by any other process.

"Manufacturer of cigars" comprehends every person other than a cigar maker whose business it is to make or manufacture cigars or cigarettes for sale or who employs others to make or manufacture cigars or cigarettes for sale.

"Cigar maker" applies to every maker of cigars or cigarettes, including apprentices, employed by a licensed cigar factory to make cigars or cigarettes from material supplied by his employer, whether working on the premises or not.

"Wholesale liquor dealer" comprehends every person who for himself or on commission sells or offers for sale wines or distilled spirits (other than denatured alcohol) in larger quantities than two decaliters at any one time, or who sells or offers the same for sale for the purpose of resale irrespective of quantity.

"Retail liquor dealer" includes every person, except a retail vino dealer, who for himself or on commission sells or offers for sale wine or distilled spirits (other than denatured alcohol) in quantities of two decaliters or less at any one time and not for resale.

"Retail vino dealer" includes every person who for himself or on commission sells or offers for sale only domestic distilled spirits in quantities of two decaliters or less at any one time and not for resale.

"Wholesale dealer in fermented liquors" means anyone who for himself or on commission sells or offers for sale fermented liquors in larger quantities than two decaliters at any one time or who sells or offers for sale such fermented liquors (excluding tuba, bassi, tapuy, and similar domestic fermented liquors) for the purpose of resale, regardless of

"Retail dealer in fermented liquors includes every person, except retail tuba dealers, who for himself or on commission sells or offers for sale fermented liquors in quantities of two decaliters or less at any one time and not for resale.

"Retail tuba dealer" includes every person who for himself or on commission sells or offers for sale tuba, bassi, or tapuy, or similar domestic fermented liquor, in quantities of less than two decaliters at any one time.

"Wholesale tobacco dealer" comprehends every person who for himself or on commission sells or offers for sale, for the purpose of resale, cigars, cigarettes, or manufactured tobacco.

"Retail tobacco dealer" includes every person who himself or on commission sells or offers for sale to consumers cigars, cigarettes, or manufactured tobacco.

"Peddler" means any person who either for himself or on commission travels from place to place in town or country and sells his goods or offers to sell and deliver the same.

Whether a peddler is a wholesale peddler or a retail peddler of a particular commodity, shall be determined from the definitions of wholesale dealer and retail dealer, as above given, in connection with the particular commodity peddled.

"Theater" includes every edifice used for the purpose of operatic and dramatic or other representations, plays, or performances, for admission to which entrance money is received.

"Circus" includes every building, tent, or area where feats of horsemanship or acrobatic sports are exhibited, but does not include traveling circuses performing in streets and squares or in buildings not intended for amusement purposes.

"Billiard room" includes every building or place, open to the public, where games of billiards or pool are played, with or without charge.

"Proprietor" of a circus, theater, museum, cockpit, concert hall, or billiard room means the person or persons having a proprietary interest in the conducting thereof.

"Owner of a race track" comprises every person who owns, leases, or controls a track where horses are entered and races are run as a public exhibition, whether or not money is bet on the result of such races.

"Pawnbroker" includes all persons whose business or occupation it is to take or receive by way of pledge or pawn, any goods, wares, or merchandise or any kind of personal property whatever, except agricultural products, as security for the repayment of money loaned thereon.

No banker who is taxed upon his capital and deposits by virtue of other provisions of this Act shall be subject to pay the taxes herein imposed upon stockbrokers, real-estate brokers, or pawnbrokers.

"Stockbroker" includes all persons whose business it is, for themselves or others, to negotiate purchases or sales of stocks, bonds, exchange, bullion, coined money, banknotes, promissory notes, or other securities.

"Money lender" includes all persons who make a practice of lending money for themselves or others at interest.

"Real estate broker" includes all persons whose business it is, for themselves or others, to negotiate purchases or sales of lands, buildings, or interest therein, or to negotiate loans secured by lands, buildings, or interest therein, or to rent real estate for others or to collect rents thereon.

"Merchandise broker," or "corredor," includes all persons, other than commission merchants and salaried employees, whose occupation it is to bring about sales of merchandise for other persons, or to bring proposed buyers and sellers together, for a compensation.

Section 47 Increase of tax on cockpits.

SEC. 47. Increase of tax on cockpits.—A municipal council may by ordinance in any year fix the tax for the ensuing calendar year or years on any cockpit in any such municipality at a larger amount than that stated above.

Written notice of such action shall be sent to the Collector of Internal Revenue before the same shall become effective.

Section 48 Reduction of tax on race tracks.

SEC. 48. Reduction of tax on race tracks.—The provincial board of any province may in any year reduce the per diem tax on race tracks for the ensuing calendar year or years to any amount not less than twenty pesos; but no such reduction shall be made for the city of Manila.

Written notice of such action shall be sent to the Collector of Internal Revenue before the same shall become effective.

Section 49 Privilege secured by payment of tax.

SEC. 49. Privilege secured by payment of tax.—A person who has paid the tax as a manufacturer of distilled spirits, manufactured liquors or wines, fermented liquors, cigars, cigarettes, snuff, or other manufactured tobacco may, without further payment of privilege tax, sell his products at wholesale and in the original packages at the place of manufacture, but not otherwise.

A retail liquor dealer may without further payment of privilege tax engage in business as a retail vino dealer; and a retail dealer in fermented liquors may without further payment engage in business as a retail tuba dealer.