AMENDING SECTION SEVENTY-THREE OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, BY PRESCRIBING AN INCREASED PENALTY ON FILERS OF FALSE OR FRAUDULENT INCOME TAX RETURNS.

• Number: Presidential Decree No. 785
• Sections: 4

Preamble

WHEREAS, one of the objectives of the proclamation of

martial law is for the Government to institute much needed reforms in

the existing tax structure in order to promote the social and economic

well-being of our people;

WHEREAS, in order to insure the success of said reforms it

is imperative that our taxpayers be imbued with a profound sense of

discipline and awareness of the penal consequences of any infraction

committed by them against our internal Revenue laws, particularly acts

of tax evasion which undermine the economic stability of the nation;

WHEREAS, it has been found that the penalty prescribed under

existing laws for tax evasion, specifically that embodied in the second

paragraph of Section 73 of the National Internal Revenue Code which

penalizes the filing of false and fraudulent returns with intent to

evade payment of the correct income tax, is disproportionate to the

gravity of the offense, such that its efficacy as a penal sanction has

now become practically nil.

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

Philippines, by virtue of the powers vested in me by the Constitution do

hereby decree and order the amendment of the National Internal Revenue

Code as follows:

Section 1

SECTION 1. Section 73 of the National Internal Revenue Code

is hereby amended to read as follows:

"SEC. 73. Penalty for failure to file return or to pay

tax.—Any one liable to pay the tax, to make a return or to supply

information required under this Code, who refuses or neglects to pay

such tax, to make such return or to supply such information at the time

or times herein specified in each year, shall be punished by a fine of

not more than two thousand pesos or by imprisonment for not more than

six months, or both. "Any individual or any officer of any corporation,

or general co-partnership (compania colectiva), required by law to make,

render, sign, or verify any return or to supply any information, who

makes any false or fraudulent return or statement with intent to defeat

or evade the assessment required by this Code to be made, shall be

punished by a fine of not less than Five Thousand Pesos and imprisonment

of not less than two years.'

Section 2

SEC. 2. All laws, decrees, executive orders, rules and

regulations inconsistent with this Decree are hereby repealed and/or

modified accordingly.

Section 3

SEC. 3. This Decree shall take effect immediately.

Done in the City of Manila, this 29th day of August, in the year of

Our Lord, nineteen hundred and seventy-five.

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

ROBERTO V. REYES

Acting Executive Secretary