CHAPTER I - Tax on Business
Payment of privilege taxes.
SEC. 178. Payment of privilege taxes. — 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.
The occupation tax must be paid by each individual engaged in a calling subject thereto; the tax on a business, by the person, firm, or company conducting the same.
Legality of business as affected by payment of tax.
SEC. 179. 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 same business or occupation, for local purposes, where the imposition of such tax is authorized by law.
Time for payment of fixed taxes.
SEC. 180. Time for payment of fixed taxes. — The yearly fixed taxes are due on the first of January of each year, and, if tendered in semi-annual installments, on or before the twentieth of January and July, or if 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.
Reckoning of tax for business first began or abandoned during year.
SEC. 181. Reckoning of tax for business first began 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 semester or 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 semester, quarter, or month, as the case may be.
Fixed tax upon business.
SEC. 182. Fixed tax upon business. — Unless otherwise provided, every person engaging in a business on which the percentage tax is imposed shall pay in full a fixed annual tax of ten pesos for each calendar year or fraction thereof in which such person shall engage in said business.
Every person who is not required to pay the percentage tax prescribed in sections 184, 185, 186, and 187 shall pay in full for each calendar year or fraction thereof in which such person shall engage in business a fixed annual tax based upon his gross annual sales during the preceding calendar year, as follows:
Four pesos, if the amount of the gross annual sales exceeds two thousand pesos but does not exceed ten thousand pesos;
Ten pesos, if the amount of the gross annual sales exceeds ten thousand pesos but does not exceed twenty-five thousand pesos;
Twenty pesos, if the amount of the gross annual sales exceeds twenty-five thousand pesos but does not exceed fifty thousand pesos;
Fifty pesos, if the amount of the gross annual sales exceeds fifty thousand pesos but does not exceed one hundred thousand pesos;
One hundred pesos, if the amount of the gross annual sales exceeds one hundred thousand pesos but does not exceed two hundred thousand pesos;
Two hundred pesos, if the amount of the gross annual sales exceeds two hundred thousand pesos but does not exceed five hundred thousand pesos; and
Three hundred pesos, if the amount of the gross annual sales exceeds five hundred thousand pesos: Provided, That if a merchant is engaged in two or more businesses, one or more of which is subject to, and the others exempt from, the percentage tax, he shall pay the graduated fixed annual tax provided above, based on the sales not subject to the percentage tax under this Title.
This tax shall be payable before the person subject to the same begins to engage in the business, and thereafter within the regulation period in the month of January during which the other fixed privilege taxes may be paid without penalty.
The following shall be exempt from the tax imposed in this section:
(a) Small merchants whose gross annual sales do not exceed two thousand pesos.
(b) All persons engaged in the sale of food products, cooked foods, or refreshments at retail in public market places whose gross annual sales do not exceed twenty thousand pesos and all persons engaged in public market places exclusively in the sale at retail of domestic meat, fruits, vegetables, game, poultry, fish, and other domestic food products.
(c) Peddlers and sellers at fixed stands and other similar selling places engaged exclusively in the sale at retail of domestic meat, fruits, vegetable, game, poultry, fish and similar domestic food products, whose total stock in trade on any one day does not reach a retail value of fifty pesos.
(d) Producers of commodities of all classes working in their own homes, consisting of parents and children living as one family, when the value of each day's production by each person capable of working is not in excess of five pesos.
(e) Owners of animal-drawn two-wheeled vehicles.
(f)) Owners of bancas.
Payment of percentage taxes.
SEC. 183. Payment of percentage taxes. — Quarterly report of earnings or value of output. — 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 on which a percentage tax is imposed under this Title, within twenty days after the end of each calendar quarter, to make a true and complete return of the amount of the gross sales, receipts, or earnings, or gross value of output actually removed from the factory or mill warehouse, during the preceding calendar quarter and pay the tax due thereon: Provided, That it shall be the duty of any person retiring from a business subject to the percentage tax to notify immediately the nearest internal-revenue officer thereof and, within ten days after closing his business, file his return or declaration, and pay the tax due thereon.
If the percentage tax on any business is not paid within the time prescribed above, the amount of the tax shall be increased by twenty-five per centum, the increment to be a part of the tax.
In case a false or fraudulent return is made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the falsity or fraud, in which case the amount so added shall be collected in the same manner as the tax.
Percentage tax on sales of jewelry, automobiles. toilet preparations and others.
SEC. 184. Percentage tax on sales of jewelry, automobiles. toilet preparations and others. — There is levied, assessed and collected once only on every original sale, barter, exchange, or similar transaction intended to transfer ownership of, or title to, the articles hereinbelow enumerated, a tax equivalent to ten per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged, or transferred, such tax to be paid by the manufacturer, producer or importer: Provided, That where the articles are manufactured out of materials subject to tax under this section, the total cost of such materials, as duly established, shall be deductible from the gross selling price or gross value in money of the manufactured articles: And provided, further, That where the articles herein mentioned are consigned abroad by the manufacturer or producer thereof, the shipment shall be subject to the tax established in section 187 and not to the tax imposed by this section:
(a) All articles commonly or commercially known as jewelry, whether real or imitation; pearls, precious and semi-precious stones, and imitations thereof; articles made of, or ornamented, mounted or titled with, precious metals or imitations thereof or ivory (not including surgical instruments or silver-plated ware, or frames or mountings for spectacles or eyeglasses); opera glasses; and lorgnettes.
(b) Automobile chassis and bodies, the selling price of which exceeds two thousand five hundred pesos each. A sale of automobile shall, for the purposes of this section, be considered to be a sale of the chassis and of the body together with parts and accessories of which the same are usually equipped.
(c) Perfumes, essences, extracts, toilet matters, cosmetics, petroleum jellies, hair oils, pomades, hair dressings, hair restoratives, hair dyes, and any similar substance, article, or preparation, by whatsoever name known or distinguished, except tooth and mouth washes, dentifrices, tooth paste, and talcum or medicated toilet powders; and any of the above which are used or applied or intended to be used or applied for toilet purposes: Provided, That the tax herein imposed shall not apply to toilet preparation on which the specific tax established in section 127 has been paid.
SEC. 185. Percentage tax on sales of automobiles, sporting goods, refrigerators, musical instruments, and others. — There is levied, assessed, and collected once only on every original sale, barter, exchange, or similar transaction intended to transfer ownership of, or title to, the articles hereinbelow enumerated, a tax equivalent to five per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged or transferred, such tax to be paid by the manufacturer, producer, or importer: Provided, That where the articles are manufactured out of materials subject to tax under this section and section 186 the total cost of such materials, as duly established, shall be deductible from the gross selling price or gross value in money of the manufactured articles: And, provided, further, That where the articles herein mentioned are consigned abroad by the manufacturer or producer thereof, the shipment shall be subject to the tax established in section 187 and not to the tax imposed by this section:
(a) Automobile chassis and bodies, the selling price of which does not exceed two thousand five hundred pesos each. A sale of automobile shall, for the purposes of this section, be considered to be a sale of the chassis and of the body together with parts and accessories with which the same are usually equipped;
(b) Watches and clocks, the value of which exceeds twenty pesos each, marine glasses, field glasses, binoculars, cameras, camera lenses, and cinematographic films of not more than sixteen millimeters in width;
(c) Polo mallets and balls; golf bags, clubs and balls; fishing rods and reels; chess and checker boards and pieces; dice; and mah-jong sets;
(d) Beauty parlor equipment;
(e) Household type refrigerators (for single or multiple cabinet installations) operated with electricity, gas, kerosene, or other means;
(f) Musical instruments, phonographs, combination radio and phonograph sets, and phonograph records; and
(g) Cartridges or other forms of ammunition, (except those for caliber .22 firearms): Provided, however, That no tax shall be collected on cartridges or other forms of ammunition sold and delivered directly to the Philippine Constabulary or Philippine Army for their actual use or issue.
Percentage tax on sales of other articles.
SEC. 186. Percentage tax on sales of other articles. — There is levied, assessed, and collected once only on every original sale, barter. exchange, and similar transaction intended to transfer ownership of, or title to, the articles not enumerated in sections 184 and 185 a tax equivalent to three and one-half per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged, or transferred, such tax to be paid by the manufacturer, producer, or importer: Provided, That where the articles are manufactured out of materials subject to tax under this section, the total cost of such materials as duly established, shall be deductible from the gross selling price or gross value in money of the manufactured articles: And provided, further, That where the said articles are consigned abroad by the manufacturer or producer thereof, the shipment shall be subject to the tax established in section 187 and not to the tax imposed by this section.
Percentage tax on consignments abroad.
SEC. 187. Percentage tax on consignments abroad. — Every person, whether he is a merchant or not, and not herein specifically exempted, shall pay a tax of one and one-half per centum of the gross value in money of the commodities, goods, wares, and merchandise consigned abroad by him, such tax to be based on the actual selling price or value of the things in question at the time they are consigned abroad, whether consisting of raw materials or of manufactured or partially manufactured products or whether of domestic or foreign origin: Provided, That the tax prescribed in this section shall not be imposed on articles upon which the tax prescribed in sections 184, 185, 186, and 189 has previously been paid. The tax upon things consigned abroad shall be refunded upon satisfactory proof of the return thereof to the Philippines unsold, subject to the limitation established in section 309 of this Code.
Transactions not subject to percentage tax.
SEC. 188. Transactions not subject to percentage tax. — In computing the tax imposed in sections. 184, 185, and 186, transactions in the following commodities shall be excluded:
(a) Things subject to tax under Title IV of this Code.
(b) Agricultural products and the ordinary salt when sold, bartered, or exchanged in this country, whether in their original state or not: Provided, That in the case of hemp, whether stripped or unstripped, sugar cane, unhusked rice or palay, coconut, corn, and copra, no tax shall be collected except when they are consigned abroad, in which case the tax prescribed in section 187 shall be due and payable, irrespective of whether the consignor is the producer thereof or not, or whether or not he is a merchant.
(c) Minerals and mineral products when sold or consigned abroad by the lessee, concessionaire, or owner of the mineral land from which removed.
(d) Articles imported into the Philippines and re-exported from the same in their original condition by the importer.
SEC. 189. Percentage tax upon proprietors or operators of rope factories, sugar centrals, rice mills, coconut oil mills, corn mills, and desiccated coconut factories. — Proprietors or operators of rope factories, sugar centrals, rice mills, coconut oil mills, corn mills, and desiccated coconut factories shall pay a tax equivalent to one and one-half per centum of the gross value in money of all the rope, sugar rice, coconut oil, grounded or milled corn, and desiccated coconut manufactured or milled by them, including the derivatives, products, and by-products of the raw materials from which the said articles are produced or manufactured, when these derivatives, products, and by-products constitute sixty per centum or more by weight or value of the raw materials mentioned above, such tax to be based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse: Provided, however, That in case the raw materials are manufactured or milled in pursuance of a contract whereby the factory, central, or mill receives a share of the finished product, the tax on the share pertaining to the planter or owner and withheld by the proprietor or operator of the factory, central, or mill and paid by him to the Collector of Internal Revenue: And provided, further, That on sugar sold to the refinery mill for the production of refined sugar "washsugar," or beet sugar, the tax shall not be paid by the central but shall be paid by the refinery mill upon local sale or consignment abroad.
Compensating tax.
SEC. 190. Compensating tax. — All persons purchasing or receiving from without the Philippines any commodities, goods, wares, or merchandise, excepting those subject to specific taxes under Title IV of this Code, shall pay on the total value thereof at the time they are received by such persons, including freights postage, insurance, commission, and all similar charges, a compensating tax equivalent to the percentage tax imposed under this Title on original transaction effected by merchants importers, or manufacturers, such tax to be paid upon the withdrawal or removal of said commodities, goods, wares, or merchandise from the customhouse or the post office: Provided, however, That merchants, importers, and manufacturers, who are subject to tax under sections 184, 185, 186, 187, and 189 of this Title shall not be required to pay the tax herein imposed where the articles purchased or received by them from without the Philippines are to be resold, bartered, or exchanged, or used in connection with their business.
SEC. 191. Percentage tax on road, building, irrigation, artesian well, waterworks, and other construction work contractors, proprietors or operators of dockyards, and others. — Road, building, irrigation, artesian well, waterworks, and other construction work contractors; filing contractors; persons engaged in the installation of gas, or electric light, heat, or power; persons selling light, heat or power, except those paying a franchise tax; proprietors or operators of dockyards, mine drilling apparatus, smelting plants, engraving plants, plating establishments, drycleaning or dyeing establishments, steam laundries photographic studios, telephone or telegraph lines or exchanges, broadcasting or wireless stations, funeral parlors, shops for the construction or repair of bicycles or vehicles of any kind, mechanical devices, instruments, apparatus, or furniture of any kind, and tailor shops; dressmakers; milliners; hatters; keepers of hotels, lodging houses, restaurants, cafes or refreshment parlors; stevedores; warehousemen; plumbers; smiths; house or sign painters; lithographers; publishers, except those engaged in the publication or printing and publication of any newspaper, magazine, review, or bulletin which appears at regular intervals, with fixed prices for subscription and sale, and which is not devoted principally to the publication of advertisements; printers; and bookbinders, shall pay a tax equivalent to one and one-half per centum of their gross receipts: Provided, That contractors or others whose gross receipts do not exceed two hundred pesos each quarter shall be exempt from the payment of the tax provided for in this section.
Percentage tax on carriers and keepers of garages.
SEC. 192. Percentage tax on carriers and keepers of garages. — Keepers of garages, transportation contractors, persons who transport passengers or freight for hire, and common couriers by land, air, or water, except owners of boats taxed under the laws administered by the Bureau of Customs, owners of bancas, and owners of animal-drawn two wheeled vehicles, shall pay a tax equivalent to one and one-half per centum of their gross receipts: Provided, That those whose gross receipts do not exceed two hundred pesos each quarter shall be exempt from the payment of the tax provided for in this section.
Amount of tax on business.
SEC. 193. Amount of tax on business. — Fixed taxes on business shall be collected as follows, the amount stated being for the whole year, when not otherwise specified:
(a) Brewers, four hundred pesos.
(b) Distillers of spirits, fifty pesos, if the annual production does not exceed fifty thousand gauge liters; one hundred pesos, if the annual production exceeds fifty thousand gauge liters but does not exceed one hundred thousand gauge liters; two hundred pesos, if the annual production exceeds one hundred thousand gauge liters but does not exceed two hundred fifty thousand gauge litres; and three hundred pesos, if the annual production exceeds two hundred fifty thousand gauge liters; rectifiers of distilled spirits, compounders, and repackers of wines or distilled spirits, three hundred pesos
(c) Wholesale peddlers of distilled, manufactured, or fermented liquor, one hundred and twenty pesos.
(d) Wholesale peddlers of distilled, manufactured tobacco, eighty pesos.
(e) Retail peddlers of distilled, manufactured, or fermented liquor. sixty pesos.
(f) Retail peddlers of manufactured tobacco, sixteen pesos.
(g) Wholesale liquor dealers —
1. In the City of Manila, four hundred pesos.
2. In any other place, one hundred and twenty pesos.
(h) Wholesale dealers in fermented liquors, except basi, tuba, and tapuy, one hundred and twenty pesos.
(i) Retail liquor dealers, sixty pesos.
(j) Retail vino dealers, twelve pesos.
(k) Retail dealers in fermented liquors, thirty pesos.
(l) Retail leaf tobacco dealers, thirty pesos.
(m) Manufacturers of tobacco and manufacturers of cigars or cigarettes, twenty pesos.
(n) Tobacco dealers, eight pesos.
(o) Manufacturers, or importers of playing cards, eighty pesos.
(p) Manufacturers, producers, or importers of soft drinks or mineral waters, fifty pesos.
(q) Stockholders, real estate brokers, commercial brokers, customs brokers, and immigration brokers, eighty pesos.
(r) Owners of race tracks, for each day on which races are run on any track, three hundred pesos.
(s) Lending investors —
1. In chartered cities and first-class municipalities, two hundred pesos;
2. In second-class municipalities, one hundred and fifty pesos;
3. In third-class municipalities, one hundred pesos; and
4. In fourth and fifth-class municipalities and municipal districts, fifty pesos: Provided, That lending investors who do business as such in more than one province shall pay a tax of two hundred pesos.
(t) Business agents (agentes de negocios), forty pesos.
Words and phrases defined.
SEC. 194. 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:
(a) "Brewer" comprises all persons who manufacture fermented liquors of any description for sale or delivery to others, but does not include manufacturers of tuba, basi, or tapuy, or similar domestic fermented liquors whose daily production does not exceed two hundred gauge liters.
(b) "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.
(c) "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, shall also is regarded as a rectifier and as being engaged in the business of rectifying.
(d) "Compounder" comprises every person who, without rectifying, purifying, or refining distilled spirits, shall by mixing such spirits, wine, or other liquor with any materials except water, manufacture any intoxicating beverage whatever.
(e) "Repacker of wines or distilled spirits" includes all persons who remove wines or distilled spirits from the original container for repacking and selling the same at wholesale.
(f) "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 retail peddler of a particular commodity, shall be determined from the definitions of wholesale dealer and retail dealer, as hereinbelow given in connection with the particular commodity peddled. A wholesale peddler of manufactured tobacco is one who sells for the purpose of resale.
(g) "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 five liters at any one time, or who sells or offers the same for sale for the purpose of resale, irrespective of quantity.
(h) "Wholesale dealer in fermented liquors" means any one who for himself or on commission sells or offers for sale fermented liquors in larger quantities than five liters at any one time, or who sells or offers for sale such fermented liquors (excluding tuba, basi, tapuy, and similar domestic fermented liquors) for the purpose of resale, regardless of quantity.
(i) "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 the denatured alcohol) in quantities of five liters or less at any one time and not for resale.
(j) "Retail vino dealer" includes every person who for himself or on commission sells or offers for sale only domestic distilled spirits in quantities of five liters or less at any one time and not for resale.
(k) "Retail dealer in fermented liquors" includes every person, except retail dealers in tuba, basi, and tapuy, who for himself or on commission sells or offers for sale fermented liquors in quantities of five liters or less at any one time and not for resale.
(l) "Retail leaf tobacco dealer" includes every person who for himself or on commission sells leaf tobacco or offers the same for sale to any person except a registered dealer in leaf tobacco or manufacturer of cigars, cigarettes, or manufactured tobacco; but the term does not include a planter or producer so far as concerns the sale of leaf tobacco of his own production.
(m) "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 robbing 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, scraps, clippings, or waste by sifting, twisting, screening, or by any other process.
(n) 'Manufacturer of cigars or cigarettes" includes those whose business it is to make or manufacture cigars or cigarettes or both for sale or who employ others to make or manufacture cigars or cigarettes for sale; but the term does not include artisans or apprentices employed to make cigars or cigarettes from material supplied by the employer, the latter being lawfully engaged in the manufacture of cigars and cigarettes.
(o) "Tobacco dealer" comprehends every person who for himself or on commission sells or offers for sale cigars, cigarettes, or manufactured tobacco.
(p) "Manufacturer or importer of playing cards" includes those whose business it is to make manufacture, or import playing cards for sale.
(q) "Manufacturer, producer, or importer of soft drinks or mineral waters" includes all persons who manufacture, produce, or import for sale:
1. Beverages derived wholly or in part from cereals or substitutes therefor, containing less than one-half of one per centum of alcohol by volume;
2. Unfermented grape juice. in natural or concentrated form (whether or not sugar has been added), containing thirty-five per centum or less of sugar by weight;
3. Unfermented fruit juices (except grape juice), in natural or slightly concentrated form, or such fruit juice to which sugar has been added (as distinguished from finished or fountain syrups), intended for consumption as beverages with the addition of water or water and sugar, and upon all imitations of any such fruit juices, and upon all carbonated beverages, commonly known as soft drinks, manufactured, compounded, or mixed by the use of concentrate, essence, or extract, instead of a finished or fountain syrup;
4. Still drinks (except grape juice), containing less than one-half of per centum of alcohol by volume, intended for consumption as beverages in the form in which sold (except natural or artificial mineral and table waters and imitations thereof, and pure apple cider); and
5. Natural or artificial mineral waters or table waters, whether carbonated or not, and all imitations thereof.
(r) "Stockholder" includes all persons whose business it is, for themselves or others, to negotiate purchases or sales of stock, bonds, exchange, bullion, coined money, bank notes, promissory notes, or other securities.
(s) "Real estate broker" includes all persons whose business it is, for themselves or others, to negotiate purchases or sales of lands, buildings, or interests therein, or to negotiate loans secured by lands, buildings, or interests therein, or to rent real estate for others or to collect rents thereon
(t) "Commercial broker" includes all persons, other than importers, manufacturers, producers, or bona fide employees, who, for compensation or profit, sell or bring about sales or purchases of merchandise for other persons, or bring proposed buyers and sellers together, or negotiate freights or other business for owners of vessels, or other means of transportation, or for the shippers, or consignors or consignees of freight carried by vessels or other means of transportation. The term includes commission merchants
(u) "Lending investor" includes all persons who make a practice of lending money for themselves or others at interest
(v) "Business agent" (agente de negocios) includes all persons who act as agents of others in the transaction of business with any public officer, as well as those who conduct collecting, advertising, employment, or private detective avenues
(w) "Merchant" means a person engaged in the sale, barter, or exchange of personal property of whatever character. Except as specifically provided, the term includes manufacturers who sell articles of their own production.
(x) "Manufacturer" includes every person who by physical or chemical process alters the exterior texture or form or inner substance of any raw material or manufactured or partially manufactured product in such manner as to prepare it for a special use or uses to which it could not have been put in its original condition, or who by any such process alters the quality of any such raw material or manufactured or partially manufactured product so as to reduce it to marketable shape or prepare it for any of the uses of industry, or who by any such process combines any such raw material or manufactured or partially manufactured products with other materials or products of the same or of different kinds and in such manner that the finished product of such process of manufacture can be put to a special use or uses to which such raw material or manufactured or partially manufactured products in their original condition could not have been put, and who in addition alters such raw material or manufactured or partially manufactured products, or combines the same to produce such finished products for the purpose of their sale or distributions to others and not for his own use or consumption.
Percentage tax on stock, real estate, commercial, customs, and immigration brokers.
SEC. 195. Percentage tax on stock, real estate, commercial, customs, and immigration brokers. — Stock, real estate, commercial, customs, and immigration brokers shall pay a percentage tax equivalent to four per centum of the gross compensation received by them in excess of five hundred pesos per quarter.
The records kept by said brokers may be used as evidence to determine the amount of the percentage tax due from them, and the Collector of Internal Revenue may assess and collect the tax due on the compensation earned in accordance with said records.
In any case, the amount of the compensation of said brokers shall be reported quarterly within the time established for the other quarterly reports of sales and receipts.
Reduction of tax on race tracks.
SEC. 196. Reduction of tax on race tracks. — The provincial board of any province or the city council of any chartered city 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 or for any place situated within a radius of ten kilometers from the boundary of the City of Manila.
Written notice of such action shall be sent to the Collector of Internal Revenue before the same shall become effective.
Privilege secured by payment of tax.
SEC. 197. 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.
SEC. 198. Continuation of business of deceased person.-When any individual paying a business tax dies and the same business is continued by the person or persons interested in his estate, no additional payment shall be required for the residue of the term for which the tax was paid.
Removal of business to other location.
SEC. 199. Removal of business to other location. — Any business for which the privilege tax has been paid may, subject to the regulations of the Department of Finance, be removed and continued in any other place without the payment of additional tax during the term for which the payment was made.
Revocation of privilege.
SEC. 200. Revocation of privilege. — When a person doing business under the provisions of this Title as a retail liquor dealer, retail vino dealer, dealer in fermented liquors, or as a peddler of tobacco or liquor, is abusing his privilege to the injury of the public morals or peace, or when a place where any such business is established has been or is conducted in a disorderly or unlawful manner, or is a nuisance, or is permitted to be used as a resort for disorderly characters, criminals, or women of ill repute, the Collector of Internal Revenue may, after due investigation, and with the approval of the Department Head, revoke such privilege, subject to appeal to the President of the Philippines, whose action on the appeal shall be final. Such revocation shall operate to forfeit all sums which may have been paid in respect of said privilege and to prohibit the sale, by the person whose privilege is so revoked, if liquor or tobacco for a term which may be fixed in said order.
CHAPTER II - Tax on Occupation
Amount of privilege tax on occupation.
SEC. 201. Amount of privilege tax on occupation. — Privilege taxes on occupation shall be collected as follows, the amount stated being the sum due for the whole year which may be paid annually or semi-annually:
(a) Lawyers, medical practitioners, land surveyors, architects, public accountants, civil, electrical, chemical, mechanical or mining engineers, insurance agents and sub-agents, veterinarians, dental surgeons, opticians, professional appraisers or connoisseurs of tobacco and other domestic or foreign products, licensed ship masters, and marine chief engineers, twenty-four pesos.
The term "mechanical engineers", as used in this section means professional mechanical engineers as defined in Commonwealth Act Numbered Two hundred and ninety-four.
(b) Chief mates, marines second engineers, pharmacists, chiropodists, tattooers, and masseurs, twelve pesos.
Exemption of persons employed by Government or engaged in work of charity.
SEC. 202. Exemption of persons employed by Government or engaged in work of charity. — No occupation tax shall be imposed upon persons in any branch of the service of the Government of the United States or of the Government of the Philippines whose entire professional services are devoted exclusively to such Governments or as applied under their direction, or upon persons devoting their entire professional services to any religious, educational, or charitable institution, or hospital, sanitarium or to any similar establishment, not conducted for private gain.
CHAPTER III - Administrative Provisions
Registration of name or style with provincial revenue agent or provincial treasurer.
SEC. 203. Registration of name or style with provincial revenue agent or provincial treasurer. — Every person engaged in any business or occupation on which a privilege tax is imposed by law shall register with the provincial revenue agent or with the provincial treasurer, in case no provincial revenue agent is assigned to the province, his name or style, place of residence, business or occupation, and the place where such business or occupation is carried on. In case of a firm, the names and residences of the various persons constituting the same shall also be registered.
Merchants, importers, and manufacturers to issue sales invoices.
SEC. 204. Merchants, importers, and manufacturers to issue sales invoices. — All merchants, importers, or manufacturers subject to tax under sections 182, 184, 185, 186, 187, and 189, of this Title, shall, for each sale or transfer of merchandise valued at ten pesos or more, prepare and issue sales or commercial invoices serially numbered in duplicate, showing, among other things, their names, or styles, if any, and business addresses: Provided, That in case of sales or transfers in the amount of fifty pesos or more the invoices shall further show the name, or style, if any, and business address of the purchaser. The original of each sales invoice shall be issued to the purchaser who, if engaged in any taxable business, shall keep and preserve the same in his place of business for a period of five years from the date of the invoice, the duplicate to be kept and preserved by the merchant, importer, or manufacturer also in his place of business for a like period.
The Collector of Internal Revenue may, in meritorious cases, exempt any merchant, importer, or manufacturer from compliance with the provisions of this section.
Sign to be exhibited by distiller, rectifier, compounder, repacker, and wholesale liquor dealer.
SEC. 205. Sign to be exhibited by distiller, rectifier, compounder, repacker, and wholesale liquor dealer. — Every person engaged in distilling or rectifying spirits, compounding liquors, repacking wines or distilled spirits, and every wholesale liquor dealer, shall keep conspicuously on the outside of his place of business a sign exhibiting, in letters not less than six centimeters high, his name or firm style, with the words "Registered distiller", "Rectifier of spirits", "Compounder of liquors", "Repacker of wines or distilled spirit", or "Wholesale liquor dealer", as the case may be, and his assessment number.
Sign to be exhibited by manufacturer of products of tobacco.
SEC. 206. Sign to be exhibited by manufacturer of products of tobacco. — Every manufacturer of cigars, cigarettes, or tobacco, and every wholesale dealer in leaf tobacco or manufactured products of tobacco shall place and keep on the outside of the building wherein his business is carried on, so that it can be distinctly seen, a sign stating his full name and business in letters not less than six centimeters high and also giving his assessment number.
Exhibition of certificate of payment at place of business.
SEC. 207. Exhibition of certificate of payment at place of business. — The certificate or receipt showing payment of tax issued to a person engaged in a business or occupation subject to a privilege tax shall be kept conspicuously exhibited in plain view in or at the place where the business is conducted or occupation plied; and, in case of a peddler or other person not having a fixed place of business, shall be kept in the possession of the holder thereof, subject to production upon the demand of any internal-revenue officer.
CHAPTER IV - Penal Provisions Especially Applicable to Business and Occupation
Unlawful pursuit of business or occupation.
SEC. 208. Unlawful pursuit of business or occupation. — Any person who distills, rectifies, repacks, compounds, or manufactures any article subject to a specific tax, without having paid the privilege tax therefor as required by law, or who knowingly aids or abets in the conduct of illicit distilling, rectifying, repacking, compounding., or illicit manufacture of any article subject to a specific tax shall, in addition to being liable for the payment of such tax, be punished by a fine a sum not less than five hundred pesos nor more than five thousand pesos, or by imprisonment for a term of not less than six years, or both; and all articles distilled, rectified, repacked, compounded, or manufactured, and all personal property found at the distillery, repacking, rectifying, compounding, or manufacturing establishment or in any building, room, yard, or enclosure connected therewith and used with or constituting a part of the premises on which the distilling, repacking, rectifying, compounding, or manufacturing of said article is carried on, and all the right, title, and interest of such person in the lot or tract of land in which such distillery, repacking, rectifying, compounding, or manufacturing establishment is situated, and all the rights, title, and interest therein of every person who knowingly or with negligence has suffered or permitted the business of a distiller, repacker, rectifier, compounder, or manufacturer of any article subject to a specific tax to be there carried on or has connived at the same, shall be forfeited.
In case of reincidence, the offender under the first paragraph hereof shall be punished by a fine of not less than two thousand pesos nor more than fifteen thousand pesos, or by imprisonment of not less than two years nor more than twelve years, or both.
Any person who carries on any other business, or pursues any calling for which a fixed privilege tax is imposed without paying such tax as required by law or who knowingly aids or abets in the conduct of such business, shall in addition to being liable to the payment of such tax, be punished by a fine in a sum not exceeding one thousand pesos or by imprisonment for a term not exceeding six months, or both.
SEC. 209. Failure to make return of receipts, sales, or gross value of output removed, or pay the tax due there on. — Any person who, being required under this Title to make a return of the amount of his receipts, sales, business, or gross value of output actually removed, or pay the tax due thereon, shall fail or neglect to make such return or pay such tax within the time required, shall be punished by a fine not exceeding two thousand pesos or by imprisonment for a term not exceeding one year, or both.
Any such person who shall make a false or fraudulent return shall, besides being liable to the surcharge prescribed in section 183 of this Title, be punished by a fine of not less than five hundred pesos nor more than ten thousand pesos or by imprisonment of not less than six months but not more than six years, or both.
Source: Official Gazette of the Republic of the Philippines — Philippine laws are public documents (works of the government).
