WHEREAS, the need for additional revenues for accelerated
national development has rendered it imperative for the government
to tap source from which the needed funds might be equitably
derived;
WHEREAS, an increase in the tax rates on cigarettes packed
in twenties is a good source of additional revenue; and
WHEREAS, in line with the goals of the New Society, the
time has come to promote our own local brands of cigarettes as a means
of attaining a real national identity for our own products and at the
same time, conserve our dollar resources by reducing to a minimum
foreign exchange remittances in the form of royalty payments to foreign
brand owners having licensing agreements with the local cigarette
manufacturers;
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 the following:
SECTION 1. Section 137 (b) of the National Internal Revenue
Code, as amended, is hereby further amended to read as follows:
"SEC. 137. Specific tax on Cigars and Cigarettes.—On
cigars and cigarettes, there shall be collected the following taxes:
"(a) Cigars—
"(b) Cigarettes—
"1. On cigarettes packed in thirties, the retail price of
which per pack does not exceed sixty centavos, on each thousand, three
pesos;
"2. On cigarettes packed in thirties, the retail price of
which per pack exceeds sixty centavos but does not exceed eighty
centavos, on each thousand, five pesos;
"3. On cigarettes packed in thirties, the retail price of
which per pack exceeds eighty centavos but does not exceed one peso and
ten centavos, on each thousand, eight pesos;
"4. On cigarettes packed in thirties, same shall be packed in
round shape only, consisting of thirty sticks for every package or seven
hundred fifty sticks for every roll, the latter wrapped in one
secondary container;
"5. On cigarettes packed in twenties, the retail price of
which per pack does not exceed one peso and ten centavos, on each
thousand, ten pesos;
"6. On cigarettes packed in twenties, the retail price of
which per pack exceeds one peso and ten centavos, but does not exceed
one peso and forty centavos, on each thousand, sixteen pesos;
"7. On cigarettes packed in twenties, the retail price of which
per pack exceeds one peso and forty centavos, but does not exceed one
peso and seventy centavos, on each thousand, eighteen pesos;
"8. On cigarettes packed in twenties, the retail price of which
per pack exceeds one peso and seventy centavos, but does not
exceed two pesos, on each thousand, twenty pesos;
"9. On cigarettes packed in twenties, the retail price of
which per pack exceeds two pesos, but does not exceed two pesos and
fifty centavos, on each thousand, thirty-two pesos;
"10. On cigarettes packed in twenties, the retail price of
which per pack exceeds two pesos and fifty centavos, but does not exceed
three pesos, on each thousand, forty pesos;
"11. On cigarettes packed in twenties, the retail price of
which per pack exceeds three pesos, on each thousand, fifty pesos;
"12. If the cigarettes of local manufacture are of foreign
brands or trade marks and being manufactured locally under licensing
agreements with the foreign brand or trade mark owners, the tax shall be
increased by fifty per centum per thousand;That any subsequent
transfer or alienation of title or right over a cigarette brand or trade
mark by a foreign owner to a local manufacturer in whatever manner,
form or description shall not affect the rates of tax then prevailing
after the effectivity of this Decree;
"13. If the cigarettes of local manufacture are mechanically
wrapped or packed, the tax shall be increased by one hundred twenty
per centum per thousand. Cigarettes shall be considered
mechanically wrapped or packed when at any stage of the wrapping or
packing thereof, a machine or any mechanical contrivance shall have
been used;
"14. If the cigarettes are of foreign manufacture, regardless
of the retail price per pack or the manner of wrapping or packing
thereof, on each thousand, eighty pesos.
"Cigarettes subject to tax at lower rates before the
effectivity of the new tax rates herein prescribed shall automatically
be subject to the corresponding higher rates and there is nothing under
this sub-section (b) which allows any downgrade re-classification of tax
rates for existing brands of cigarettes duly registered at the time
the herein rates become effective.
"Duly registered and/or existing brands of cigarettes packed
in 20's at the time of the effectivity of the new rates herein
prescribed shall not be allowed to be packed in 30's and neither shall
any new brand of cigarettes be registered nor allowed to be manufactured
if same shall be packed in 30's."
SECTION 2. This decree shall take effect immediately.
Done in the City of Manila, this 27th 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
