Section 15
SEC. 15. Section 261 of the same Code is further amended to read as follows: “SEC. 261. Tax on finance companies. – There shall be collected a tax of five per centum on the gross receipts derived by all finances companies as well as other financial intermediaries not performing quasi-banking functions, doing business in the Philippines from the interests, discounts, and all other items treated as gross income under this Code: Provided, That, interest, commissions and discounts from lending activities, as well as income from financial leasing shall be taxed, on the basis of remaining maturities of the instruments from which such receipts are derived in accordance with the following schedule: Short-term maturity - not in excess of two (2) years 5% Medium-term maturity over two(2) years but not exceeding four (4) years 3% Long-term maturity - (i) over four (4) years but not exceeding seven (7) years 1% (ii) Over seven (7) years 0% Provided, however, That in case the maturity period is shortened thru pretermination, then the maturity period shall be reckoned to end as of the date of pretermination for purposes of classifying the transaction as short, medium or long term and the correct rate of tax shall be applied accordingly. Nothing in this Code shall preclude the Commissioner from imposing the same tax herein provided on persons performing similar financing activities.”