Section 25
SEC. 25. Section 203 of the National Internal Revenue Code is hereby renumbered and amended to read as follows: “SEC. 168. Percentage tax upon proprietors or operators of rope factories, sugar centrals and mills, coconut oil mills, palm oil mills, cassava mills, and desiccated coconut factories. – Proprietors or operators of rope factories, sugar centrals and mills, coconut oil mills, palm oil mills, cassava mills, and desiccated coconut factories, shall pay a tax equivalent to three [3%] per cent of the gross value of money of all the rope, sugar, coconut oil, palm oil, cassava flour or starch, desiccated coconut, manufactured, processed or milled by them, including the by-product of the raw materials, from which said articles are produced, processed, or manufactured, such tax to be based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse: Provided, however, That this tax shall not apply to rope, coconut oil, palm oil and the by-product of copra from which it is produced or manufactured, and desiccated coconuts, if such rope, coconut oil, palm oil, copra by-products and desiccated coconuts, shall be removed for exportation by the proprietor or operator of the factory or mill himself, and are actually exported without returning to the Philippines, whether in their original state or as an ingredient or part of any manufactured article or products: Provided, further, That where the planter or the owner of the raw materials is the exporter of the aforementioned milled or manufactured products, he shall be entitled to a tax credit equivalent to the proportion of the miller’s taxes withheld by the proprietor or operator of the factory or mill, corresponding to the quantity exported, which may be used against any internal revenue tax directly due from him: and Provided, finally, That credit for any sales, miller’s or excise taxes paid on raw materials or supplies used in the milling process shall not be allowed against the miller’s tax due, except in the case of a proprietor or operator of a refined sugar factory as provided hereunder. “In case the raw materials are processed, manufactured or milled in pursuance of a contract where the factory, central, or mill receives a share of the finished products, the tax on the share pertaining to the planter or owner of the raw materials shall be charged to the planter or owner and withheld by the proprietor or operator of the factory, central, or mill and paid by him to the Commissioner. “A proprietor or operator of a refined sugar factory shall be subject to the tax imposed by this section but any miller’s tax paid under this section on the raw sugar shall be credited against the tax due on the refined sugar. “Where articles subject to manufacturer’s sales tax are manufactured out of materials subject to tax under this section, the miller’s tax paid herein shall be credited against the sales tax due on the finished products in the same manner as provided under Section 166 of this Code.”