AMENDING PARAGRAPH (f) OF SECTION 126 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED.

• Number: Presidential Decree No. 2009
• Sections: 4

Preamble

WHEREAS, there is need to provide additional safeguards for

the proper implementation of Presidential Decree No. 2007 which increased the

tax rates and maximum retail prices of cigarettes.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Republic of the Philippines, by virtue of the powers vested in me by the

Constitution, do hereby order and decree:

Section 1

SECTION 1. Paragraph (f) of Section 126 of the National

Internal Revenue Code, as amended, is further amended to read as follows:

"SECTION 126.-

"(f) Effect of Change of Rates & Classification. — A change in

specific tax rates and maximum retail prices of cigars and cigarettes per tax

bracket shall not allow a downward re-classification of the tax bracket of any

existing cigar or cigarette brand.

"In case a manufacturer introduces a new category of cigarettes using a

foreign brand or trademark under a licensing agreement, for tax purposes, the

maximum retail price of such cigarettes shall in no case be lower than the

prevailing maximum retail price of an existing category of cigarettes using a

foreign brand or trademark of comparable quality, blend, cost of production and

other relevant factors.

"Duly registered and/or existing brands of cigarettes packed in twenties

shall not be allowed to be packed in thirties."

Section 2

SEC. 2. Under P.D. No. 2007, the per bracket specific tax

rates, except on cigars, have been increased by 42% to 50%. Cigarettes taxed

under a particular tax bracket before the change in rates shall automatically be

subject to the new specific tax rate corresponding to the said bracket. No

cigarette manufacturer or producer shall be allowed to pay on their cigarette

brands an amount less than 142% of the applicable specific tax rates before the

change.

Section 3 Effectivity.

SEC. 3. Effectivity.—This Decree shall take effect

on January 6, 1986.

Done in the City of Manila, on this 11th day of January, in the year of Our

Lord, nineteen hundred and eighty-six.