Presidential Decree No. 750 (PD 750) — Providing Incentives and Protection to the Local Textile Industry and to Manufacturers of Certain Articles in Order to Encourage Exportation Thereof.
WHEREAS, the local textile industry has been experiencing
lately a depressed market brought about by global inflation and rising
production costs;
WHEREAS, the local textile industry may experience further
drops in its export sales which may be brought about by competition from
other countries which have rationalized their textile industries to
attain economies;
WHEREAS, in order to help and promote the local textile
industry, bail them out of distressed conditions and meet foreign
competition, certain tariff incentives must be provided to reduce its
production cost;
WHEREAS, for health reasons, there has been a growing
preference for filter-tipped cigarettes here and abroad as may be
readily noted in the very significant trend toward the production of
said type of cigarettes even in the local cigarette industry;
WHEREAS, the increasing demand for cigarette filter rods by
the local cigarette industry has encouraged local entrepreneurs to
engage in the local manufacture of said filter rods, thereby
contributing to the dollar conservation program of the government even
in a modest degree;
WHEREAS, the development and growth of the local cigarette
filter rod industry, whose major raw material, acetate tow, is derived
from wood pulp, will be in line with the government's objective to
accelerate the economic development of the country by utilizing local
indigenous materials in the manufacture of industrial products with the
use of Filipino skill and labor.
WHEREAS, under the prevailing system of taxation, local
cigarette manufacturers producing filter rods for their own use in the
production of their brands of cigarette enjoy an undue advantage over
other cigarette manufacturers who patronize locally-made filter rods as
the former are exempt from the payment of advance sales tax on their
importation of acetate tow and other raw materials and are further save
from additional costs of packing, delivery and the like incidental
expenses, which situation results not only in an unfair competition in
the procurement of raw materials vital to the local cigarette industry
but also serves as a disincentive for the local producers of filter rods
to produce more to meet local demands as well as a barrier to a
possible participation in the world market for filter rods as a means of
bolstering our foreign exchange revenues;
WHEREAS, the exemption from advance sales tax of imported
materials to be used by the importer himself in the manufacture of
articles subject to specific tax provided in Section 183(B) of the Tax
Code was granted starting only in 1951 by Republic Act No. 594 when
there were still no local manufacturers of said imported materials.
Considering that there are now several local manufacturers of the
imported materials covered by the exemption, the continued grant thereof
prejudices local manufacturers, hence, the need for the removal of such
exemption in order to place, taxwise, local manufacturers on equal
footing with manufacturer of articles subject to specific tax, and at
the same time encourage and promote local manufacture of said articles;
WHEREAS, the specific tax on cigarettes is now based on
selling price and no longer on the kind of tobacco fillers and length,
thus rendering inapplicable to cigarettes the philosophy of the
exemption from the sales tax of articles used in the manufacture of
articles subject to specific tax;
WHEREAS, in line with the goals and objectives of the New
Society, it has now become imperative for the government to take a hand
in stabilizing the situation to insure fair competition in the local
cigarette industry as well as stimulate the development and growth of
the local manufacturers of cigarette filter rods and ultimately
encourage the exportation of locally produced filter rods.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers in me vested by the Constitution do
hereby decree and order as part of the law of the land:
SECTION 1. Subsection (b) Section 183 of the National
Internal Revenue Code, as amended, is hereby further amended to read as
follows:
"(b) Sales tax on imported articles.—When the articles
are imported, the percentage taxes established in sections one hundred
eighty-four, one hundred eighty-four-A, one hundred eighty-five, one
hundred eighty-five-A, one hundred eighty-five-B, one hundred eighty-six
and one hundred eighty-six-B of this Code shall be paid in advance by
the importer, in accordance with the regulations promulgated by the
Secretary of Finance and prior to the release of such articles from
customs' custody, based on the import invoice value thereof, certified
to as correct under penalties of perjury by the Philippine Consul at the
port of origin if there is any, including freight, postage, insurance,
commission, customs duty and all similar charges, plus one hundred per
centum of such total value in the case of articles enumerated in Section
one hundred eighty-four; one hundred and eighty-four-A; fifty per
centum of such total value in the case of articles enumerated in
sections one hundred eighty-five, one hundred eighty-five-A and one
hundred eighty-five B; and twenty-five per centum in the case of
articles enumerated in section one hundred eighty-six and one hundred
eighty-six-B. The tax imposed in this section shall not apply to
articles to be used by the importer himself in the manufacture of motor
fuel oils and other fuels.
The provisions of this Act shall not be construed as nullifying
whatever interpretation the government has given to the word "importer"
heretofore.
In the case of tax-free articles brought or imported into the
Philippines by persons, entities or agencies exempt from the tax which
are subsequently sold, transferred, or exchanged in the Philippines to
non-exempt private persons or entities, the purchasers shall be
considered the importers thereof. The tax due on such articles shall
constitute a lien on the article itself superior to all other charges
or liens, irrespective of the possessor thereof.
Any percentage tax paid under Section 184, 184-A, 185, 185-A,
185-B, 186, 186-B on domestically manufactured or on imported raw
materials used in the manufacture of finished products exported shall be
allowed to be credited against other tax liabilities of the
manufacture-exporter; Provided, however, that said percentage
taxes paid are indicated as a separate item in the invoices."
SEC. 2. Heading Nos. 32.05, 32.06 and 32.07, Chapter 32 of
the Revised Tariff and Customs Code of the Philippines, as amended, are
hereby further amended to read as follows:
"32.05
Synthetic organic dyestuffs including pigment
dyestuffs); synthetic organic products of a kind used as luminophores;
products of the kind known as optical bleaching agents, substantive to
the fibre; natural indigo:
A.
When directly imported by textile mills under
prior joint authorization of the Tariff Commission and Board of
Investments
ad val. 10%
B.
Others
ad val. 30%
"32.06
Colour lakes:
A.
When imported directly by textile mills
under prior joint authorization of the Tariff Commission and Board of
Investments
ad val. 10%
B.
Others
ad val 30%
"32.07
Other colouring matter, inorganic products of a
kind used as luminophores:
A.
When imported directly by textile mills
under prior authorization of the Tariff Commission and Board of
Investments
ad val. 10%
B.
Others
ad val. 30%
SEC. 3. Heading No. 51.01, Chapter 51 of the Revised Tariff
and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:
"51.01
Yarn of man-made fibres (continuous), not put up
for retail sale:
A.
Articles not included in subheadings B and C
hereof
ad val. 30%
B.
Polyester yarn
ad val. 50%
C.
Polyester yarn and polyfil, when
imported directly by textile mills under prior joint authorization of
the Tariff Commission and Board of Investments
ad val. 10%
SEC. 4. Heading No. 55.01, Chapter 55 of the Revised Tariff
and Customs Code of the Philippines, as amended, is hereby further
amended to read as follows:
"55.01
Cotton, not carded or combed
ad val.,
Free"
SEC. 5. Heading No. 56.02, Chapter 56 of the Revised Tariff
and Customs Code of the Philippines, as amended by Presidential Decree
No. 34, is hereby further amended to read as follows:
"56.02
Continuous filament tow for
the manufacture of man-made fibres (discontinuous):
A.
Articles not included in subheading B hereof
ad val. 10%
Not included in subheading A above are acetate tow and such
other similar continuous filament tow, used as major raw material in the
manufacture of cigarette filter rods, imported by local producers
thereof with a total volume of sales of less than 3 billion filter rods
for the calendar year 1973 or less than 250 million filter rods monthly
sales average during the same period subject to
ad val. 100%
B.
Polyester filament tow, except when
imported directly by textile spinning mills under prior joint
authorization of the Tariff Commission and the Board of Investments
ad val. 30%
SEC. 6. Heading No. 59.01, Chapter 59 of the Revised Tariff
and Customs Code of the Philippines, as amended by Presidential Decree
No. 34, is hereby further amended to read as follows: "59.01 Wadding
and articles of wadding; textile flock and dust and mill neps
100%
SEC. 7. In accordance with the provisions of Section 160 of
the National Internal Revenue Code, as amended, governing the operations
and business transactions of persons or firms engaged in the
manufacture, importation, or sale of, among others, cigarette filter
tips or filter rods, the Commissioner of Internal Revenue shall, upon
the due verification of an application in writing, issue the necessary
certification to the local producer of cigarette filter rods concerned
attesting to the applicant's volume of sale of filter rods for the
calendar year 1973 or his average monthly sales thereof during the same
period for the purpose of determining the taxability or non-taxability
of the acetate tow or such other similar raw materials imported by him
for' the local manufacture of cigarette filter rods. No importation of
said acetate tow or such other similar raw materials shall be released
from Customs custody without a written authority to release the same to
be issued by the Commissioner of Internal Revenue upon written
application therefor filed by the local producer-importer concerned and
after a final tax determination shall have been made by the Bureau of
Customs and the Customs duties, fees and internal revenue taxes, if any,
due thereon shall have been paid.
SEC. 8. All laws, order and decrees as well as rules and
regulations inconsistent herewith are hereby repealed and/or modified
accordingly.
SEC. 9. This Decree take effect immediately.
Done in the City of Manila, this 21st day of July, in the year of
Our Lord, nineteen hundred and seventy-five.
(Sgd.)
FERDINAND E. MARCOS
President
Republic of the Philippines
By the President:
(Sgd.)
ALEJANDRO MELCHOR
Executive Secretary
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
