Section 3
SEC. 3. Section 121 of the National Internal Revenue Code of 1997, as amended, is hereby restored with amendments to read as follows: "SEC. 121. Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions. - There shall be collected a tax on gross receipts derived from sources within the Philippines by all banks and non-bank financial intermediaries in accordance with the following schedule: On interest, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which such receipts are derived: Maturity period is five (5) years or less ..........................................5% Maturity periods is more than five (5) years ...................................1% On dividends and aquity shares in net income of subsidiaries ...............0% On royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income under Section 32 of this Code ......5% On net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments ................................5% Provided, however, That in case the maturity period referred to in paragraph (a) is shortened thru pretermination, then the maturity period shall be reckoned to end as of the date of pretermination for purpose of classifying the transaction and the correct rate shall be applied accordingly. Provided, finally, That the generally accepted accounting principles as may be prescribed by the Bangko Sentral ng Pilipinas for the bank or non-bank financial intermediary performing quasi-banking functions shall likewise be the basis for the calculation of gross receipts. Nothing in this Code shall preclude the Commissioner from imposing the same tax herein provided on persons performing similar banking activities."