An Act Amending Sections 5, 6, 24, 25, 27, 31, 32, 33, 34, 51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100, 101, 106, 107, 108, 109, 110, 112, 114, 116, 127, 128, 129, 145, 148, 149, 151, 155, 171, 174, 175, 177, 178, 179, 180, 181, 182, 183, 186, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 232, 236, 237, 249, 254, 264, 269, and 288; Creating New Sections 51-A, 148-A, 150-A, 150-B, 237-A, 264-A, 264-B, and 265-A; and Repealing Sections 35, 62, And 89; All Under Republic Act No. 8424, Otherwise Known as the National Internal Revenue Code of 1997, as Amended, and for Other Purposes

Seventeenth Congress
Second Regular Session

Begun and held in Metro Manila, on Monday, the twenty-fourth day of July, two thousand seventeen.

REPUBLIC ACT No. 10963

An Act Amending Sections 5, 6, 24, 25, 27, 31, 32, 33, 34, 51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91, 97, 99, 100, 101, 106, 107, 108, 109, 110, 112, 114, 116, 127, 128, 129, 145, 148, 149, 151, 155, 171, 174, 175, 177, 178, 179, 180, 181, 182, 183, 186, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 232, 236, 237, 249, 254, 264, 269, and 288; Creating New Sections 51-A, 148-A, 150-A, 150-B, 237-A, 264-A, 264-B, and 265-A; and Repealing Sections 35, 62, And 89; All Under Republic Act No. 8424, Otherwise Known as the National Internal Revenue Code of 1997, as Amended, and for Other Purposes

Be it enacted by the Senate and House of Representatives of the Philippine Congress Assembled:

Section 1. Title. - This Act shall be known as the "Tax Reform for Acceleration and Inclusion (TRAIN)".

Section 2. Declaration of Policy. - It is hereby declared the policy of the State:

Section 3. Section 5 of the National Internal Revenue Code of 1997 (NIRC), as amended, is hereby further amended to read as follows:

Section 4. Section 6 of the NIRC, as amended, is hereby further amended to read as follows:

Section 5. Section 24 of the NIRC, as amended, is hereby further amended to read as follows:

Section 6. Section 25 of the NIRC, as amended, is hereby further am.ended to read as follows:

Section 7. Section 27 of the NIRC, as amended, is hereby further amended to read as follows:

Section 8. Section 31 of the NIRC, as amended, is hereby further amended to read as follows:

Section 9. Section 32 of the NIRC, as amended, is hereby further amended to read as follows:

Section 10. Section 33 of the NIRC, as amended, is hereby further amended to read as follows:

Section 11. Section 34 of the NIRC, as amended, is hereby further amended to read as follows:

Section 12. Section 35 of the NIRC, as amended, is hereby repealed.

Section 13. Section 51 of the NIRC, as amended, is hereby further amended to read as follows:

Section 14. A new section designated as Section 51-A of the NIRC, as amended, is hereby inserted to read as follows:

Section 15. Section 52 of the NIRC, as amended, is hereby further amended to read as follows:

Section 16. Section 56 of the NIRC, as amended. is hereby further amended to read as follows:

Section 17. Section 57 of the NIRC, as amended, is hereby further amended to read as follows:

Section 18. Section 58 of the NIRC, as amended, is hereby further amended to read as follows:

Section 19. Section 62 of the NIRC, as amended, is hereby repealed.

Section 20. Section 74 of the NIRC, as amended. is hereby further amended to read as follows:

Section 21. Section 79 of the NIRC, as amended. is hereby further amended to read as follows:

Section 22. Section 84 of the NIRC, as amended, is hereby further amended to read as follows:

Section 23. Section 86 of the NIRC, as amended, is hereby further amended to read as follows:

Section 24. Section 89 of the NIRC, as amended, is hereby repealed.

Section 25. Section 90 of the NIRC, as amended, is hereby further amended to read as follows:

Section 26. Section 91 of the NIRC, as amended, is hereby further amended to read as follows:

Section 27. Section 97 of the NIRC, as amended, is hereby further amended to read as follows:

Section 28. Section 99 of the NIRC, as amended, is hereby further amended to read as follows:

Section 29. Section 100 of the NIRC, as amended, is hereby further amended to read as follows:

Section 30. Section 101 of the NIRC, as amended, is hereby further amended to read as follows:

Section 31. Section 106 of the NIRC, as amended, is hereby further amended to read as follows:

Section 32. Section 107 of the NIRC, as amended, is hereby further amended to read as follows:

Section 33. Section 108 of the NIRC, as amended, is hereby further amended to read as follows:

Section 34. Section 109 of the NIRC, as amended, is hereby further amended to read as follows:

Section 35. Section 110 of the NIRC, as amended, is hereby further amended to read as follows:

Section 36. Section 112 of the NIRC, as amended, is hereby further amended to read as follows:

Section 37. Section 114 of the NIRC, as amended, is hereby further amended to read as follows:

Section 38. Section 116 of the NIRC, as amended, is hereby further amended to read as follows:

Section 39. Section 127 of the NIRC, as amended, is hereby further amended to read as follows:

Section 40. Section 128 of the NIRC, as amended, is hereby further amended to read as follows:

Section 41. Section 129, Chapter 1 of Title VI of the NIRC, as amended, is hereby further amended to read as follows:

Section 42. Section 145 of the NIRC, as amended, is hereby further amended to read as follows:

Section 43. Section 148 of the NIRC, as amended, is hereby further amended to read as follows:

Section 44. A new section designated as Section 148-A under Chapter V of the NIRC, as amended, is hereby inserted to read as follows:

Section 45. Section 149, Chapter 6 of Title VI of the NIRC, as amended, is hereby further amended to read as follows:

Section 46. A new section designated as Section 150-A under Chapter VI, Title VI of the NIRC, as amended, is hereby inserted to read as follows:

Section 47. A new section designated as Section 150-B under Chapter VI, Title VI of the NIRC, as amended, is hereby inserted to read as follows:

Section 48. Section 151 of the NIRC, as amended,is hereby further amended to read as follows:

Section 49. Section 155 of the NIRC, as amended, is hereby further amended to read as follows:

Section 50. Section 171 of the NIRC, as amended, is hereby further amended to read as follows:

Section 51. Section 174 of the NIRC, as amended, is hereby further amended to read as follows:

Section 52. Section 175 of the NIRC, as amended, is hereby further amended to read as follows:

Section 53. Section 177 of the NIRC, as amended, is hereby further amended to read as follows:

Section 54. Section 178 of the NIRC, as amended, is hereby further amended to read as follows:

Section 55. Section 179 of the NIRC, as amended. is hereby further amended to read as follows:

Section 56. Section 180 of the NIRC, as amended, is hereby further amended to read as follows:

Section 57. Section 181 of the NIRC, as amended, is hereby further amended to read as follows:

Section 58. Section 182 of the NIRC, as amended, is hereby further amended to read as follows:

Section 59. Section 183 of the NIRC, as amended, is hereby further amended to read as follows:

Section 60. Section 186 of the NIRC, as amended, is hereby further amended to read as follows:

Section 61. Section 188 of the NIRC, as amended, is hereby further amended to read as follows:

Section 62. Section 189 of the NIRC, as amended, is hereby further amended to read as follows:

Section 63. Section 190 of the NIRC, as amended, is hereby further amended to read as follows:

Section 64. Section 191 of the same Code, as amended, is hereby further amended to read as follows:

Section 65. Section 192 of the NIRC, as amended, is hereby further amended to read as follows:

Section 66. Section 193 of the NIRC, as amended, is hereby further amended to read as follows:

Section 67. Section 194 of the NIRC, as amended, is hereby further amended to read as follows:

Section 68. Section 195 of the NIRC, as amended, is hereby further amended to read as follows:

Section 69. Section 196 of the NIRC, as amended, is hereby further amended to read as follows:

Section 70. Section 197 of the NIRC, as amended, is hereby further amended to read as follows:

Section 71. Section 232 of the NIRC, as amended, is hereby further amended to read as follows:

Section 72. Section 236 of the NIRC, as amended, is hereby further amended to read as follows:

Section 73. Section 237 of the NIRC, as amended, is hereby further amended to read as follows:

Section 74. A new section designated as Section 237-A under Chapter II, Title IX of the NIRC, as amended, is hereby inserted to read as follows:

Section 75. Section 249 of the NIRC, as amended, is hereby further amended to read as follows:

Section 76. Section 254 of the NIRC, as amended, is hereby further amended to read as follows:

Section 77. Section 264 of the NIRC, as amended, is hereby further amended to read as follows:

Section 78. A new section designated as Section 264-A under Chapter II, Title X of the NIRC, as amended, is hereby inserted as follows:

Section 79. A new section designated as Section 264-B under Chapter II, Title X of the NIRC, as amended, is hereby inserted to read as follows:

Section 80. A new section designated as Section 265-A under Chapter II, Title X of the NIRC, as amended, is hereby inserted to read as follows:

Section 81. Section 269 of the NIRC, as amended, is hereby further amended to read as follows:

Section 82. Section 288 of the NIRC, as amended, is hereby further amended to read as follows:

Section 83. Reportorial Requirements. - The interagency committee created and the concerned departments/agencies/beneficiaries under Section 82 of this Act shall submit to the President of the Senate of the Philippines, the Speaker of the House of Representatives, the Senate Committee on Finance and the House Committee on Appropriations a detailed report on the expenditure of the amounts earmarked hereon copy furnished the Chairpersons of the Committee on Ways and Means of both Houses of Congress. The report shall likewise be posted on the official website of the agencies concerned.

Section 84. Implementing Rules and Regulations. - Within thirty (30) days from the effectivity of this Act, the Secretary of Finance shall. upon the recommendation of the Commissioner of Internal Revenue, promulgate the necessary rules and regulations for its effective implementation.

Section 85. Separability Clause. - If any provision of this Act is subsequently declared invalid or unconstitutional, the other provisions hereof which are n~t affected thereby shall remain in full force and effect.

Section 86. Repealing Clause. - The following laws or provisions of laws are hereby repealed and the persons and/or transactions affected herein are made subject to the VAT provision of Title IV of the NIRC, as amended:

Provided, That the VAT obligations of government owned and-controlled corporations, state universities and colleges, and other government instrumentalities whose VAT exemption has been repealed under this Act shall be chargeable to the Tax Expenditure Fund (TEF) provided for in the annual General Appropriations Act: Provided, further, That VAT exemption, VAT zero-rating, and VAT credit granted to state universities and colleges on their purchases and importations are hereby repealed and the transactions affected herein are made subject to the VAT provisions of Title IV of the NIRC, as amended.

Provided, That, with respect to income tax, the following laws or provisions of laws are hereby repealed or amended:

Section 87. Effectivity. - This Act shall take effect on January 1, 2018 following its complete publication in the Official Gazette or in at least one (1) newspaper of general circulation.

Approved,

AQUILINO "KOKO" PIMENTEL
President of the Senate

PANTALEON D. ALVAREZ
Speaker of the House of Representatives

This Act which is a consolidation of House Bill No. 5636 and Senate Bill No. 1592 was passed by the House of Representatives and the Senate on December 13, 2017.

LUTGARDO BARBO
Secretary of the Senate

CESAR STRAIT PAREJA
Secretary General
House of Representatives

Approved: December 19, 2017

(Sgd.) RODRIGO ROA DUTERTE
President of the Philippines

"Sec. 5. Power of the Commissioner to Obtain Information, and to Summon, Examine, and Take Testimony of Persons. - In ascertaining the correctness of any return, or in making a return when none has been made, or in determining the liability of any person for any internal revenue tax, or in collecting any such liability, or in evaluating tax compliance, the Commissioner is authorized:

"x x x."

"Sec. 6. Power of the Commissioner to Make Assessments and Prescribe Additional Requirements for Tax Administration and Enforcement -

"Sec. 24. Income Tax Rates. -

"(A) Rates of Income Tax on Individual Citizen and Individual, Resident Alien of the Philippines -

"(B) Rate of Tax on Certain Passive Income.—

"(C) Capital Gains from Sale of Shares of Stock not Traded in the Stock Exchange. - The provisions of Section 39(B) notwithstanding, a final tax at the rate of fifteen percent (15%) is hereby imposed upon the net capital gains realized during the taxable year from the sale, barter, exchange or other disposition of shares of stock in a domestic corporation, except shares sold, or disposed of through the stock exchange.

"x x x."

"Sec. 25. Tax on Nonresident Alien Individual -

"Sec. 27. Rates of Income Tax on Domestic Corporations -

"Sec. 31. Taxable Income Defined. - The term ‘taxable income’ means the pertinent items of gross income specified in this Code, less deductions, if any, authorized for such types of income by this Code or other special laws."

"Sec. 32. Gross Income -

"Sec. 33. Special Treatment of Fringe Benefit. -

"Sec. 34. Deductions from Gross Income. - Except for taxpayers earning compensation income arising from personal services rendered under an employer-employee relationship where no deductions shall be allowed under this Section, in computing taxable income subject to income tax under Sections 24(A); 25(A); 26; 27(A), (B), and (C); and 28(A)(1), there shall be allowed the following deductions from gross income:

"Notwithstanding the provisions of the preceding Subsections, x x x."

"Sec. 51. Individual Returns -

"Sec. 51-A. Substituted Filing of Income Tax Returns by Employees Receiving Purely Compensation Income - Individual taxpayers receiving purely compensation income, regardless of amount, from only one employer in the Philippines for the calendar year, the income tax of which has been withheld correctly by the said employer (tax due equals tax withheld) shall not be required to file an annual income tax return. The certificate of withholding filed by the respective employers, duly stamped ‘received’ by the BIR, shall be tantamount to the substituted filing of income tax returns by said employees."

"Sec. 52. Corporation Returns -

"(A) Requirements. - Every corporation subject to the tax herein imposed, except foreign corporations not engaged in trade or business in the Philippines, shall render, in duplicate, a true and accurate quarterly income tax return and final or adjustment return in accordance with the provisions of Chapter XII of this Title. The income tax return shall consist of a maximum of four (4) pages in paper form or electronic form, be filed by the president, vice president or other principal officer, shall be sworn to by such officer and by the treasurer or assistant treasurer, and shall only contain the following information:

Provided, That the foregoing provisions shall not affect the implementation of Republic Act No. 10708 or TIMTA.

"x x x."

"Sec. 56. Payment and Assessment of Income Tax for Individuals and Corporations -

"(A) Payment of Tax -

"Sec. 57. Withholding of Tax at Source. -

"Sec. 58. Return and Payment of Taxes Withheld at Source. -

"(A) x x x

"x x x

"The return for final and creditable withholding taxes shall be filed and the payment made not later than the last day of the month following the close of the quarter during which withholding was made."

"Sec. 74. Declaration of Income Tax for Individuals. -

"Sec. 79. Income Tax Collected at Source. -

"x x x

"(C) Refunds or Credits. -

"(D) Withholding on Basis of Average Wages. - x x x

"(E) Nonresident Aliens - x x x

"(F) Year-end Adjustment. - x x x."

"Sec. 84. Rate of Estate Tax. - There shall be levied, assessed, collected and paid upon the transfer of the net estate as determined in accordance with Sections 85 and 86 of every decedent, whether resident or nonresident of the Philippines, a tax at the rate of six percent (6%) based on the value of such net estate."

"Sec. 86. Computation of Net Estate.— For the purpose of the tax imposed in this Chapter, the value of the net estate shall be determined:

"(A) Deductions Allowed to the Estate of a Citizen or a Resident - In the case of a citizen or resident of the Philippines, by deducting from the value of the gross estate—

"(B) Deductions Allowed to Nonresident Estates - In the case of a nonresident not a citizen of the Philippines, by deducting from the value of that part of his gross estate which at the time of his death is situated in the Philippines:

"(C) Share in the Conjugal Property - The net share of the surviving spouse in the conjugal partnership property as diminished by the obligations properly chargeable to such property shall, for the purpose of this Section, be deducted from the net estate of the decedent.

"(D) Tax Credit for Estate Taxes Paid to a Foreign Country -

"One hundred percent (100%) of the value, if the prior decedent died within one (1) year prior to the death of the decedent, or if the property was transferred to him by gift, within the same period prior to his death;

"Eighty percent (80%) of the value, if the prior decedent died more than one (1) year but not more than two (2) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

"Sixty percent (60%) of the value, if the prior decedent died more than two (2) years but not more than three (3) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death;

"Forty percent (40%) of the value, if the prior decedent died more than three (3) years but not more than four (4) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death; and

"Twenty percent (20%) of the value, if the prior decedent died more than four (4) years but not more than five (5) years prior to the death of the decedent, or if the property was transferred to him by gift within the same period prior to his death.

"These deductions shall be allowed only where a donor’s tax, or estate tax imposed under this Title was finally determined and paid by or on behalf of such donor, or the estate of such prior decedent, as the case may be, and only in the amount finally determined as the value of such property in determining the value of the gift, or the gross estate of such prior decedent, and only to the extent that the value of such property is included in the decedent’s gross estate, and only if in determining the value of the estate of the prior decedent, no deduction was allowable under paragraph (5) in respect of the property or properties given in exchange therefor. Where a deduction was allowed of any mortgage or other lien in determining the donor’s tax, or the estate tax of the prior decedent, which was paid in whole or in part prior to the decedent’s death, then the deduction allowable under said Subsection shall be reduced by the amount so paid. Such deduction allowable shall be reduced by an amount which bears the same ratio to the amounts allowed as deductions under paragraphs (2), (3), (4), and (6) of this Subsection as the amount otherwise deductible under said paragraph (5) bears to the value of the decedent’s estate. Where the property referred to consists of two or more items, the aggregate value of such items shall be used for the purpose of computing the deduction.

"Sec. 90. Estate Tax Returns. -

"(A) Requirements. - In all cases of transfers subject to the tax imposed herein, or regardless of the gross value of the estate, where the said estate consists of registered or registrable property such as real property, motor vehicle, shares of stock or other similar property for which a clearance from the Bureau of Internal Revenue is required as a condition precedent for the transfer of ownership thereof in the name of the transferee, the executor, or the administrator, or any of the legal heirs, as the case may be, shall file a return under oath in duplicate, setting forth:

"Provided, however, That estate tax returns showing a gross value exceeding Five million pesos (₱5,000,000) shall be supported with a statement duly certified to by a Certified Public Accountant containing the following:

"x x x

"(B) Time for Filing - For the purpose of determining the estate tax provided for in Section 84 of this Code, the estate tax return required under the preceding Subsection (A) shall be filed within one (1) year from the decedent’s death.

"x x x."

"Sec. 91. Payment of Tax. -

"x x x

"Sec. 97. Payment of Tax Antecedent to the Transfer of Shares, Bonds or Rights - x x x.

"If a bank has knowledge of the death of a person, who maintained a bank deposit account alone, or jointly with another, it shall allow any withdrawal from the said deposit account, subject to a final withholding tax of six percent (6%). For this purpose, all withdrawal slips shall contain a statement to the effect that all of the joint depositors are still living at the time of withdrawal by any one of the joint depositors and such statement shall be under oath by the said depositors."

"Sec. 99. Rate of Tax Payable by Donor -

"Sec. 100. Transfer for Less Than Adequate and Full Consideration - Where property, other than real property referred to in Section 24(D), is transferred for less than an adequate and full consideration in money or money’s worth, then the amount by which the fair market value of the property exceeded the value of the consideration shall, for the purpose of the tax imposed by this Chapter, be deemed a gift, and shall be included in computing the amount of gifts made during the calendar year: Provided, however, That a sale, exchange, or other transfer of property made in the ordinary course of business (a transaction which is a bona fide, at arm’s length, and free from any donative intent), will be considered as made for an adequate and full consideration in money or money’s worth."

"Sec. 101. Exemption of Certain Gifts - The following gifts or donations shall be exempt from the tax provided for in this Chapter:

"(A) In the Case of Gifts Made by a Resident -

"x x x."

"Sec. 106. Value-added Tax on Sale of Goods or Properties -

"(A) Rate and Base of Tax - There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, a value-added tax equivalent to twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor.

"Provided, That subparagraphs (3), (4), and (5) hereof shall be subject to the twelve percent (12%) value-added tax and no longer be considered export sales subject to zero percent (0%) VAT rate upon satisfaction of the following conditions:

"Provided, That the Department of Finance shall establish a VAT refund center in the Bureau of Internal Revenue (BIR) and in the Bureau of Customs (BOC) that will handle the processing and granting of cash refunds of creditable input tax.

"An amount equivalent to five percent (5%) of the total VAT collection of the BIR and the BOC from the immediately preceding year shall be automatically appropriated annually and shall be treated as a special account in the General Fund or as trust receipts for the purpose of funding claims for VAT refund: Provided, That any unused fund, at the end of the year shall revert to the General Fund.

"Provided, further, That the BIR and the BOC shall be required to submit to the Congressional Oversight Committee on the Comprehensive Tax Reform Program (COCCTRP) a quarterly report of all pending claims for refund and any unused fund.

"(b) Sales to persons or entities whose exemption under special laws or international agreements to which the Philippines is a signatory effectively subjects such sales to zero rate.

"x x x."

"Sec. 107. Value-added Tax on Importation of Goods. - "(A) In General. - There shall be levied, assessed and collected on every importation of goods a value-added tax equivalent to twelve percent (12%) based on the total value used by the Bureau of Customs in determining tariff and customs duties, plus customs duties, excise taxes, if any, and other charges, such tax to be paid by the importer prior to the release of such goods from customs custody: Provided, That where the customs duties are determined on the basis of the quantity or volume of the goods, the value-added tax shall be based on the landed cost plus excise taxes, if any.

"(B) Transfer of Goods by Tax-exempt Persons. - x x x."

"Sec. 108. Value-added Tax on Sale of Services and Use or Lease of Properties.—

"(A) Rate and Base of Tax. - There shall be levied, assessed and collected, a value-added tax equivalent to twelve percent (12%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties.

"The phrase ‘sale or exchange of services’ means the performance of all kinds of services in the Philippines for others for a fee, remuneration or consideration, including those performed or rendered by construction and service contractors; stock, real estate, commercial, customs and immigration brokers; lessors of property, whether personal or real; warehousing services; lessors or distributors of cinematographic films; persons engaged in milling, processing, manufacturing or repacking goods for others; proprietors, operators or keepers of hotels, motels, resthouses, pension houses, inns, resorts; proprietors or operators of restaurants, refreshment parlors, cafes and other eating places, including clubs and caterers; dealers in securities; lending investors; transportation contractors on their transport of goods or cargoes, including persons who transport goods or cargoes for hire and other domestic common carriers by land relative to their transport of goods or cargoes; common carriers by air and sea relative to their transport of passengers, goods or cargoes from one place in the Philippines to another place in the Philippines; sales of electricity by generation companies, transmission by any entity, and distribution companies, including electric cooperatives; services of franchise grantees of electric utilities, telephone and telegraph, radio and television broadcasting and all other franchise grantees except those under Section 119 of this Code and non-life insurance companies (except their crop insurances), including surety, fidelity, indemnity and bonding companies; and similar services regardless of whether or not the performance thereof calls for the exercise or use of the physical or mental faculties. The phrase ‘sale or exchange of services’ shall likewise include:

"Lease of properties shall be subject to the tax herein imposed irrespective of the place where the contract of lease or licensing agreement was executed if the property is leased or used in the Philippines.

"The term ‘gross receipts’ means the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services and deposits and advanced payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person, excluding value-added tax.

"(B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT registered persons shall be subject to zero percent (0%) rate:

"Provided, That subparagraphs (B)(1) and (B)(5) hereof shall be subject to the twelve percent (12%) value-added tax and no longer be subject to zero percent (0%) VAT rate upon satisfaction of the following conditions:

"Provided, That the Department of Finance shall establish a VAT refund center in the Bureau of Internal Revenue (BIR) and in the Bureau of Customs (BOC) that will handle the processing and granting of cash refunds of creditable input tax.

"An amount equivalent to five percent (5%) of the total value-added tax collection of the BIR and the BOC from the immediately preceding year shall be automatically appropriated annually and shall be treated as a special account in the General Fund or as trust receipts for the purpose of funding claims for VAT Refund: Provided, That any unused fund, at the end of the year shall revert to the General Fund.

"Provided, further, That the BIR and the BOC shall be required to submit to the COCCTRP a quarterly report of all pending claims for refund and any unused fund."

"Sec. 109. Exempt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following transactions shall be exempt from the value-added tax:

"Sec. 110. Tax Credits. - "(A) Creditable Input Tax. - "(1) x x x

"(2) x x x

"Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code shall be spread evenly over the month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (₱1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, further, That the amortization of the input VAT shall only be allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, finally, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.

"x x x."

"Sec. 112. Refunds or Tax Credits of Input Tax -

"In case of full or partial denial of the claim for tax refund, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim, appeal the decision with the Court of Tax Appeals: Provided, however, That failure on the part of any official, agent, or employee of the BIR to act on the application within the ninety (90)-day period shall be punishable under Section 269 of this Code.

"x x x."

"Sec. 114. Return and Payment of Value-added Tax. - "(A) In General. - Every person liable to pay the value-added tax imposed under this Title shall file a quarterly return of the amount of his gross sales or receipts within twenty-five (25) days following the close of each taxable quarter prescribed for each taxpayer: Provided, however, That VAT-registered persons shall pay the value-added tax on a monthly basis: Provided, finally, That beginning January 1, 2023, the filing and payment required under this Subsection shall be done within twenty-five (25) days following the close of each taxable quarter.

"x x x

"(B) x x x

"(C) Withholding of Value-added Tax. - The Government or any of its political subdivisions, instrumentalities or agencies, including government-owned or -controlled corporations (GOCCs) shall, before making payment on account of each purchase of goods and services which are subject to the value-added tax imposed in Sections 106 and 108 of this Code, deduct and withhold the value-added tax imposed in Sections 106 and 108 of this Code, deduct and withhold a final value-added tax at the rate of five percent (5%) of the gross payment thereof: Provided, That beginning January 1, 2021, the VAT witholding system under this Subsection shall shift from final to a creditable system: Provided, further, That the payment for lease or use of properties or property rights to nonresident owners shall be subject to twelve percent (12%) withholding tax at the time of payment: Provided, finally, That payments for purchases of goods and services arising from projects funded by Official Development Assistance (ODA) as defined under Republic Act No. 8182, otherwise known as the ‘Official Development Assistance Act of 1996’, as amended, shall not be subject to the final withholding tax system as imposed in this Subsection. For purposes of this Section, the payor or person in control of the payment shall be considered as the withholding agent.

"Sec. 116. Tax on Persons Exempt from Value-added Tax (VAT). - Any person whose sales or receipts are exempt under Section 109(BB) of this Code from the payment of value-added tax and who is not a VAT-registered person shall pay a tax equivalent to three percent (3%) of his gross quarterly sales or receipts: Provided, That cooperatives, and beginning January 1, 2019, self-employed and professionals with total annual gross sales and/or gross receipts not exceeding Five hundred thousand pesos (₱500,000) shall be exempt from the three percent (3%) gross receipts tax herein imposed."

"Sec. 127. Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the Local Stock Exchange or through Initial Public Offering -

"(A) Tax on Sale, Barter or Exchange of Shares of Stock Listed and Traded through the Local Stock Exchange.— There shall be levied, assessed and collected on every sale, barter, exchange or other disposition of shares of stock listed and traded through the local stock exchange other than the sale by a dealer in securities, a tax at the rate of six-tenths of one percent (6⁄10 of 1%) of the gross selling price or gross value in money of the shares of stock sold, bartered, exchanged or otherwise disposed which shall be paid by the seller or transferor.

"x x x."

"Sec. 128. Returns and Payment of Percentage Taxes -

"(A) x x x

"x x x."

"TITLE VI–EXCISE TAXES ON CERTAIN GOODS AND SERVICES

"CHAPTER 1—GENERAL PROVISIONS

"Sec. 129. Goods and Services Subject to Excise Taxes. - Excise taxes apply to goods manufactured or produced in the Philippines for domestic sales or consumption or for any other disposition and to things imported as well as services performed in the Philippines. The excise tax imposed herein shall be in addition to the value-added tax imposed under Title IV.

"For purposes of this Title, excise taxes herein imposed and based on weight or volume capacity or any other physical unit of measurement shall be referred to as ‘specific tax’ and an excise tax herein imposed and based on selling price or other specified value of the good or service performed shall be referred to as ‘ad valorem tax.’"

"Sec. 145. Cigars and Cigarettes -

"The rates of tax imposed under this Subsection shall be increased by four percent (4%) every year thereafter effective on January 1, 2024, through revenue regulations issued by the Secretary of Finance."

"Sec. 148. Manufactured Oils and Other Fuels. - There shall be collected on refined and manufactured mineral oils and motor fuels, the following excise taxes which shall attach to the goods hereunder enumerated as soon as they are in existence as such:

"Effective January 1, 2018

"Effective January 1, 2019

"Effective January 1, 2020

"Petroleum products, including naphtha, LPG, petroleum coke, refinery fuel and other products of distillation, when used as input, feedstock or as raw material in the manufacturing of petrochemical products, or in the refining of petroleum products, or as replacement fuel for natural-gas-fired-combined cyclepower plant in lieu of locally-extracted natural gas during the non-availability thereof, subject to the rules and regulations to be promulgated by the Secretary of Finance, per liter of volume capacity, zero (₱0.00): Provided, That the by-product including fuel oil, diesel fuel, kerosene, pyrolysis gasoline, liquefied petroleum gases, and similar oils having more or less the same generating power, which are produced in the processing of naphtha into petrochemical products shall be subject to the applicable excise tax specified in this Section, except when such by-products are transferred to any of the local oil refineries through sale, barter or exchange, for the purpose of further processing or blending into finished products which are subject to excise tax under this Section.

"For the period covering 2018 to 2020, the scheduled increase in the excise tax on fuel as imposed in this Section shall be suspended when the average Dubai crude oil price based on Mean of Platts Singapore (MOPS)for three (3) months prior to the scheduled increase of the month reaches or exceeds Eighty dollars (USD 80) per barrel.

"Provided, That the Department of Finance shall perform an annual review of the implementation of the excise tax on fuel and shall, based on projections provided and recommendations of the Development Budget Coordination Committee, as reconciled from the conditions as provided above, recommend the implementation or suspension of the excise tax on fuel: Provided, further, That the recommendation shall be given on a yearly basis: Provided, finally, That any suspension of the increase in excise tax shall not result in any reduction of the excise tax being imposed at the time of the suspension."

"Sec. 148-A. Mandatory Marking of All Petroleum Products. - In accordance with rules and regulations to be issued by the Secretary of Finance, in consultation with the Commissioner of Internal Revenue and Commissioner of Customs and in coordination with the Secretary of Energy, the Secretary of Finance shall require the use of an official fuel marking or similar technology on petroleum products that are refined, manufactured, or imported into the Philippines, and that are subject to the payment of taxes and duties, such as but not limited to, unleaded premium gasoline, kerosene, and diesel fuel oil after the taxes and duties thereon have been paid. The mandatory marking of all petroleum products shall be in accordance with the following:

"The term ‘confirmatory tests’ shall refer to the accurate and precise analytical test of the tested unmarked, adulterated, or diluted fuel using a device, tool or equipment which will validate and confirm the result of the field test, that is immediately conducted in an accredited testing facility that is certified to ISO 17025."

"CHAPTER VI – EXCISE TAX ON MISCELLANEOUS ARTICLES

"Sec. 149. Automobiles. - There shall be levied, assessed and collected an ad valorem tax on automobiles based on the manufacturer’s or importer’s selling price, net of excise and value-added tax, in accordance with the following schedule:

"Effective January 1, 2018

"Provided, That hybrid vehicles shall be subject to fifty percent (50%) of the applicable excise tax rates on automobiles under this Section: Provided, further, That purely electric vehicles and pick-ups shall be exempt from excise tax on automobiles.

"As used in this Section—

"Provided, That in the case of imported automobiles not for sale, the tax imposed herein shall be based on the total landed value, including transaction value, customs duty and all other charges.

"Automobiles used exclusively within the freeoort zone shall be exempt from. excise tax."

"Sec. 150-A. Non-essential Services.— There shall be levied, assessed, and collect a tax equivalent to five percent (5%) based on the gross receipts derived from the performance of services, net of excise tax and value-added tax, on invasive cosmetic procedures, surgeries, and body enhancements directed solely towards improving, altering, or enhancing the patient’s appearance and do not meaning fully promote the proper function of the body or prevent or treat illness or disease: Provided, That this tax shall not apply to procedures necessary to ameliorate a deformity arising from, or directly related to, a congenital or developmental defect or abnormality, a personal injury resulting from an accident or trauma, or disfiguring disease, tumor, virus or infection: Provided, further, That cases or treatments covered by the National Health Insurance Program shall not be subject to this tax."

"Sec. 150-B. Sweetened Beverages -

"(A) Rate and Base of Tax. - Effective January 1, 2018:

"(B) Definition of Terms. - As used in this Act:

"(C) Exclusions. - The following products, as described in the food category system from Codex Alimentarius Food Category Descriptors (Codex Stan 192-1995, Rev. 2017 or the latest) as adopted by the FDA, are excluded from the scope of this Act:

"(D) Filing of Return and Payment of Excise Tax and Penalty -

"Any corporation, association or partnership liable for any of the acts or omissions in violation of this Section shall be fined treble the amount of deficiency taxes, surcharges, and interest which may be assessed pursuant to this Section.

"Any person liable for any of the acts or omissions prohibited under this Section. shall be crirninal1y liable and penalized under Section 254 of the NIRC, as amended. Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal.

"If not a citizen of the Philippines, the offender shall be deported immediately after serving the sentence without further proceedings for deportation.

"(E) Specific Responsibility of the Food and Drug Administration (FDA). - Starting June 1, 2018, the FDA shall require all manufacturers and importers of sweetened beverages covered by this Act to indicate on the label the type of sweetener used, and on sweetened beverages in powder form to indicate on the label the equivalent of each serving per liter of volume capacity.

"The FDA shall also conduct post marketing surveillance of the sweetened beverages on display in supermarkets, groceries or retail stores and/or inspection of manufacturing sites to determine compliance with the requirements of this Section. Violations of the provisions of this Act, including but not limited to, mislabeling or misbranding, shall, to the extent applicable, be punishable under existing laws.

"(F) Duty of the Commissioner to Ensure Payment of Taxes. - It shall be the duty of the Commissioner, among other things, to prescribe a materially unique, secure and non removable identification, such as codes, stamps or other markings, to be firmly and conspicuously affixed on and form part of the label of all excisable sweetened beverages.

"For this purpose, the above mentioned control measure shall be caused by the Commissioner to be printed with adequate security features to ensure the payment of excise tax on sweetened beverages.

"(G) Review of Implementation of the Sweetened Beverage Tax. - At the start of the implementation of the sugar sweetened beverage tax and every year thereafter, the Department of Health, Department of Science and Technology, and Department of Finance shall review the impact of these provisions on its health objectives with the view to making recommendations on the tax rate on these beverages."

"Sec. 151. Mineral Products -

"x x x."

"Sec. 155. Manufacturers and/or Importers to Provide Themselves with Counting or Metering Devices to Determine Volume of Production and Importation. - Manufacturers of cigarettes, alcoholic products, oil products, and other articles subject to excise tax that can be similarly measured shall provide themselves with such necessary number of suitable counting or metering devices to determine as accurately as possible the volume, quantity or number of the articles produced by them under rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner: Provided, That the Department of Finance shall maintain a registry of all petroleum manufacturers and/or importers and the articles being manufactured and/or imported by them: Provided, further, That the Department of Finance shall mandate the creation of a real-time inventory of petroleum articles being manufactured, imported or found in storage depots of such petroleum manufacturers and/or importers: Provided, finally, That importers of finished petroleum products shall also provide themselves with Bureau-accredited metering devices to determine as accurately as possible the volume of petroleum products imported by them.

This requirement shall be complied with before commencement of operations."

"Sec. 171. Authority of Internal Revenue Officer in Searching for and Testing Taxable Articles. - Any internal revenue officer may, in the discharge of his official duties, enter any house, building or place where articles subject to tax under this Title are produced or kept, or are believed by him upon reasonable grounds to be produced or kept, so far as may be necessary to examine, test, discover or seize the same.

"He may also stop and search any vehicle or other means of transportation when upon reasonable grounds he believes that the same carries any article on which the excise tax has not been paid.

"Subject to rules and regulations to be issued by the Secretary of Finance, the Commissioner of Internal Revenue or his authorized representatives may conduct periodic random field tests and confirmatory tests on fuel required to be marked under Section 148-A found in warehouses, storage tanks, gas stations and other retail outlets, and in such other properties of persons engaged in the sale, delivery, trading, transportation, distribution, or importation of fuel intended for the domestic market: Provided, "(a) Random field testing shall be conducted in the presence of revenue or customs officers, fuel marking provider, and the authorized representative of the owner of the fuel to be tested: Provided, That an employee assigned or working at the place where the random field tests conducted shall be deemed an authorized representative of the owner;

"Provided, further, That confirmatory fuel test certificates issued by fuel testing facilities shall be valid for any legal purpose from the date of issue, and shall constitute admissible and conclusive evidence before any court."

"Sec. 174. Stamp Tax on Original Issue of Shares of Stock. - On every original issue, whether on organization, reorganization or for any lawful purpose, of shares of stock by any association, company, or corporation; there shall be collected a documentary stamp tax of Two pesos (₱2.00) on each Two hundred pesos (₱200), or fractional part thereof, of the par value, of such shares of stock: Provided, That in the case of the original issue of shares of stock without par value, the amount of the documentary stamp tax herein prescribed shall be based upon the actual consideration for the issuance of such shares of stock: Provided, further, That in the case of stock dividends, on the actual value represented by each share."

"Sec. 175. Stamp Tax on Sales, Agreements to Sell, Memoranda of Sales, Deliveries or Transfer of Shares or Certificates of Stock - On all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfer of shares or certificates of stock in any association, company, or corporation, or transfer of such securities by assignment in blank, or by delivery, or by any paper or agreement, or memorandum or other evidences of transfer or sale whether entitling the holder in any manner to the benefit of such stock, or to secure the future payment of money, or for the future transfer of any stock, there shall be collected a documentary stamp tax of One peso and fifty centavos (₱1.50) on each Two hundred pesos (₱200), or fractional part thereof, of the par value of such stock: Provided, That only one tax shall be collected on each sale or transfer of stock from one person to another, regardless of whether or not a certificate of stock is issued, indorsed, or delivered in pursuance of such sale or transfer: and Provided, further, That in the case of stock without par value the amount of the documentary stamp tax herein prescribed shall be equivalent to fifty percent (50%) of the documentary stamp tax paid upon the original issue of said stock."

"Sec. 177. Stamp Tax on Certificates of Profits or Interest in Property or Accumulations. - On all certificates of profits, or any certificate or memorandum showing interest in the property or accumulations of any association, company or corporation, and on all transfers of such certificates or memoranda, there shall be collected a documentary stamp tax of One peso (₱1.00) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of such certificates or memorandum."

"Sec. 178. Stamp Tax on Bank Checks, Drafts, Certificates of Deposit not Bearing Interest, and Other Instruments. - On each bank check, draft, or certificate of deposit not drawing interest, or order for the payment of any sum of money drawn upon or issued by any bank, trust company, for any person or persons, companies or corporations, at sight or on demand there shall be collected a documentary stamp tax of Three pesos (₱3.00)."

"Sec. 179. Stamp Tax on All Debt Instruments. - On every original issue of debt instruments, there shall be collected a documentary stamp-tax of One peso and fifty centavos (₱1.50) on each Two hundred pesos (₱200), or fractional part thereof, of the issue price of any such debt instruments: Provided, That for such debt instruments with terms of less than one (1) year, the documentary stamp tax to be collected shall be of a proportional amount in accordance with the ratio of its term in number of days to three hundred sixty-five (365) days: Provided, further, That only one documentary stamp tax shall be imposed on either loan agreement, or promissory notes issued to secure such loan.

"x x x."

"Sec. 180. Stamp Tax on All Bills of Exchange or Drafts. - On all bills of exchange (between points within the Philippines) or drafts, there shall be collected a documentary stamp tax of Sixty centavos (₱0.60) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of any such bill of exchange or draft."

"Sec. 180. Stamp Tax Upon Acceptance of Bills of Exchange and Others. - Upon any acceptance or payment of any bill of exchange or order for the payment of money purporting to be drawn in a foreign country but payable in the Philippines, there shall be collected a documentary stamp tax of Sixty centavos (₱0.60) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of any such bill of exchange, or order, or the Philippine equivalent of such value, if expressed in foreign currency."

"Sec. 182. Stamp Tax on Foreign Bills of Exchange and Letters of Credit. - On all foreign bills of exchange and letter of credit (including orders, by telegraph or otherwise, for the payment of money issued by express or steamship companies or by any person or persons) drawn in but payable out of the Philippines in a set of three (3) or more according to the custom of merchants and bankers, there shall be collected a documentary stamp tax of Sixty centavos (₱0.60) on each Two hundred pesos (₱200), or fractional part thereof, of the face value of any such bill of exchange or letter of credit, or the Philippine equivalent of such face value, if expressed in foreign

"Sec. 183. Stamp Tax on Life Insurance Policies.— On all policies of insurance or other instruments by whatever name the same may be called, whereby any insurance shall be made or renewed upon any life or lives, there shall be collected a one-time documentary stamp tax at the following rates:

"Sec. 186. Stamp Tax on Policies ofAnnuities and Pre-Need Plans. - On all policies of annuities, or other instruments by whatever name the same may be called, whereby an annuity may be made, transferred or redeemed, there shall be collected a documentary stamp tax of One peso (₱1.00) on each Two hundred pesos (₱200), or fractional part thereof, of the premium or installment payment on contract price collected. On pre-need plans, the documentary stamp tax shall be Forty centavos (₱0.40) on each Two hundred pesos (₱200), or fractional part thereof of the premium or contribution collected."

"Sec. 188. Stamp Tax on Certificates. - On each certificate of damage or otherwise, and on every other certificate or document issued by any customs officer, marine surveyor, or other person acting as such, and on each certificate issued by a notary public, and on each certificate of any description required by law or by rules or regulations of a public office, or which is issued for the purpose of giving information, or establishing proof of a fact, and not otherwise specified herein, there shall be collected a documentary stamp tax of Thirty pesos (₱30.00)."

"Sec. 189. Stamp Tax on Warehouse Receipts. - On each warehouse receipt for property held in storage in a public or private warehouse or yard for any person other than the proprietor of such warehouse or yard, there shall be collected a documentary stamp tax of Thirty pesos (₱30.00): Provided, That no tax shall be collected on each warehouse receipt issued to any one person in any one calendar month covering property the value of which does not exceed Two hundred pesos (₱200)."

"Sec. 190. Stamp Tax on Jai-alai, Horse Race, Tickets, Lotto or Other Authorized Numbers Games. - On each jai-alai, horse race ticket, lotto, or other authorized numbers games, there shall be collected a documentary stamp tax of Twenty centavos (₱0.20): Provided, That if the cost of the ticket exceed One peso (₱1.00), an additional tax of Twenty centavos (₱0.20) on every One peso (₱1.00), or fractional part thereof, shall be collected."

"Sec. 191. Stamp Tax on Bills of Lading or Receipts. - On each set of bills of lading or receipts (except charter party) for any goods, merchandise or effects shipped from one port or place in the Philippines (except on ferries across rivers), or to any foreign port, there shall be collected a documentary stamp tax of Two pesos (₱2.00), if the value of such goods exceeds One hundred pesos (₱100) and does not exceed One thousand pesos (₱1,000); Twenty pesos (₱20.00), if the value exceeds One thousand pesos (₱1,000): Provided, however, That freight tickets covering goods, merchandise or effects carried as accompanied baggage of passengers on land and water carriers primarily engaged in the transportation of passengers are hereby exempt."

"Sec. 192. Stamp Tax on Proms. - On each proxy for voting at any election of officers of any company or association, or for any other purpose, except proxies issued affecting the affairs of associations or corporations organized for religious, charitable or literary purposes, there shall be collected a documentary stamp tax of Thirty pesos (₱30.00)."

"Sec. 193. Stamp Tax on Powers of Attorney. - On each power of attorney to perform any act whatsoever, except acts connected with the collection of claims due from or accruing to the Government of the Republic of the Philippines, or the government of any province, city or municipality, there shall be collected a documentary stamp tax of Ten pesos (₱10.00)."

"Sec. 194. Stamp Tax on Leases and Other Hiring Agreements. - On each lease, agreement, memorandum, or contract for hire, use or rent of any lands or tenements, or portions thereof, there shall be collected a documentary stamp tax of Six pesos (₱6.00) for the first Two thousand pesos (₱2,000), or fractional part thereof, and an additional Two pesos (₱2.00) for every One thousand pesos (₱1,000) or fractional part thereof, in excess of the first Two thousand pesos (₱2,000) for each year of the term of said contract or agreement."

"Sec. 195. Stamp Tax on Mortgages, Pledges and Deeds of Trust. - On every mortgage or pledge of lands, estate, or property, real or personal, heritable or movable, whatsoever, where the same shall be made as a security for the payment of any definite and certain sum of money lent at the time or previously due and owing or forborne to be paid, being payable, and on any conveyance of land, estate, or property whatsoever, in trust or to be sold, or otherwise converted into money which shall be and intended only as security, either by express stipulation or otherwise, there shall be collected a documentary stamp tax at the following rates:

"(a) When the amount secured does not exceed Five thousand pesos (₱5,000), Forty pesos (₱40.00).

"(b) On each Five thousand pesos (₱5,000), or fractional part thereof in excess of Five thousand pesos (₱5,000), an additional tax of Twenty pesos (₱20.00).

"x x x."

"Sec. 196. Stamp Tax on Deeds of Sale, Conveyances and Donation of Real Property. - On all conveyances, donations, deeds, instruments, or writings, other than grants, patents or original certificates of adjudication issued by the Government, whereby any land, tenement, or other realty sold shall be granted, assigned, transferred, donated or otherwise conveyed to the purchaser, or purchasers, or to any other person or persons designated by such purchaser or purchasers, or donee, there shall be collected a documentary stamp tax, at the rates herein below prescribed, based on the consideration contracted to be paid for such realty or on its fair market value determined in accordance with Section 6(E) of this Code, whichever is higher: Provided, That when one of the contracting parties is the Government, the tax herein imposed shall be based on the actual consideration:

"Transfers exempt from donor’s tax under Section 101(a) and (b) of this Code shall be exempt from the tax imposed under this Section.

"When it appears that the amount of the documentary stamp tax payable hereunder has been reduced by an incorrect statement of the consideration in any conveyance, deed, instrument or writing subject to such tax the Commissioner, provincial or city Treasurer, or other revenue officer shall. from the assessment rolls or other reliable source of information, assess the property of its true market value and collect the proper tax thereon."

"Sec. 197. Stamp Tax on Charter Parties and Similar Instruments. - On every charter party, contract or agreement for the charter of any ship, vessel or streamer, or any letter or memorandum or other writing between the captain, master or owner or other person acting as agent of any ship, vessel or steamer, and any other person or persons for relating to the charter of any such ship, vessel or streamer, and on any renewal or transfer of such charter, contract, agreement, letter or memorandum there shall be collected a documentary stamp tax the following rates:

"Sec. 232. Keeping of Books of Accounts.—

"(A) Corporations, Companies, Partnerships or Persons Required to Keep Books of Accounts.— All corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep and use relevant and appropriate set of bookkeeping records duly authorized by the Secretary of Finance wherein all transactions and results of operations are shown and from which all taxes due the Government may readily and accurately be ascertained and determined any time of the year: Provided, That corporations, companies, partnerships or persons whose gross annual sales, earnings, receipts or output exceed Three million pesos (₱3,000,000), shall have their books of accounts audited and examined yearly by independent Certified Public Accountants and their income tax returns accompanied with a duly accomplished Account Information Form (AIF) which shall contain, among others, information lifted from certified balance sheets, profit and loss statements, schedules listing income-producing properties and the corresponding income therefrom and other relevant statements.

"x x x."

"Sec. 236. Registration Requirements -

"Provided, That any person taxed under Section 24(A)(2)(b) and 24(A)(2)(c)(2)(a) of the NIRC who elected to pay the eight percent (8%) tax on gross sales or receipts shall not be allowed to avail of this option.

"For purposes of Title IV of this Code, any person who has registered value-added tax as a tax type in accordance with the provisions of Subsection (C) hereof shall be referred to as a ‘VAT-registered person’ who shall be assigned only one Taxpayer Identification Number (TIN).

"x x x."

"Sec. 237. Issuance of Receipts or Sales or Commercial Invoices.—

"(A) Issuance. - All persons subject to an internal revenue tax shall, at the point of each sale and transfer of merchandise or for services rendered valued at One hundred pesos (₱100) or more, issue duly registered receipts or sale or commercial invoices, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: Provided, however, That where the receipt is issued to cover payment made as rentals, commissions, compensation or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer or client: Provided, further, That where the purchaser is a VAT-registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer Identification Number (TIN) of the purchaser.

"Within five (5)years from the effectivity of this Act and upon the establishment of a system capable of storing and processing the required data. the Bureau shall require taxpayers engaged in the export of goods and services, taxpayers engaged in e-commerce, and taxpayers under the jurisdiction of the Large Taxpayers Service to issue electronic receipts or sales or commercial invoices in lieu of manual receipts or sales or commercial invoices subject to rules and regulations to be issued by th; Secretary of Finance upon recommendation of the Commissioner and after a public hearing shall have been held for this purpose: Provided, That taxpayers not covered by the mandate of this provision may issue electronic receipts or, sales or commercial invoices, in lieu of manual receipts, and sales and commercial invoices.

"The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the same in his place of business for a period of three (3) years from the close of the taxable year in which such invoice or receipt was issued, while the duplicate shall be kept and preserved by the issuer, also in his place of business, for a like period: Provided, That in case of electronic receipts or sales or commercial invoices, the digital records of the same shall be kept by the purchaser, customer or client and the issuer for the same period above stated.

"The Commissioner may, in meritorious cases, exempt any person subject to internal revenue tax from compliance with the provisions of this Section."

"Sec. 237-A. Electronic Sales Reporting System.— Within five (5) years from the effectivity of this Act and upon the establishment of a system capable of storing and processing the required data, the Bureau shall require taxpayers engaged in the export of goods and services, and taxpayers under the jurisdiction of the Large Taxpayers Service to electronically report their sales data to the Bureau through the use of electronic point of sales systems, subject to rules and regulations to be issued by the Secretary of Finance as recommended by the Commissioner of Internal Revenue: Provided, That the machines, fiscal devices, and fiscal memory devices shall be at the expense of the taxpayers.

"The data processing of sales and purchase data shall comply with the provisions of Republic Act No. 10173, otherwise known as the "Data Privacy Act" and Section 270 of the NIRC, as amended, on unlawful divulgence of taxpayer information and such other laws relating to the confidentiality of information.

"The Bureau shall also establish policies, risk management approaches, actions, trainings, and technologies to protect the cyber environment, organization, and data in compliance with Republic Act No. 10175 or the "Cybercrime Prevention Act of 2012."

"Sec. 249. Interest -

"x x x."

"Sec. 254. Attempt to Evade or Defeat Tax. - Any person who willfully attempts in any manner to evade or defeat any tax imposed under this Code or the payment thereof shall, in addition to other penalties provided by law, upon conviction thereof, be punished with a fine of not less than Five hundred thousand pesos (₱500,000) but not more than Ten million pesos (₱10,000,000), and imprisonment of not less than six (6) years but not more than ten (10) years: Provided, That the conviction or acquittal obtained under this Section shall not be a bar to the filing of a civil suit for the collection of taxes."

"Sec. 264. Failure or Refusal to Issue Receipts or Sales or Commercial Invoices, Violations Related to the Printing of such Receipts or Invoices and Other Violations -

"(a) x x x

"(b) Any person who commits any of the acts enumerated hereunder shall be penalized with a fine of not less than Five hundred thousand pesos (₱500,000) but not more than Ten million pesos (₱10,000,000), and imprisonment of not less than six (6) years but not more than ten (10) years:

"Sec. 264-A. Failure to Transmit Sales Data Entered on Cash Register Machine (CRM)/Point of Sales System (POS) Machines to the BIR’s Electronic Sales Reporting System. - Any taxpayer required to transmit sales data to the Bureau’s electronic sales reporting system but fails to do so, shall pay, for each day of violation, a penalty amounting to one-tenth of one percent (1⁄10 of 1%) of the annual net income as reflected in the taxpayer’s audited financial statement for the second year preceding the current taxable year for each day of violation or Ten thousand pesos (₱10,000), whichever is higher: Provided, That should the aggregate number of days of violation exceed one hundred eighty (180) days within a taxable year, an additional penalty of permanent closure of the taxpayer shall be imposed: Provided, further, That if the failure to transmit is due to force majeure or any causes beyond the control of the taxpayer the penalty shall not apply."

"Sec. 264-B. Purchase, Use, Possession, Sale or Offer to Sell, Installment, Transfer, Update, Upgrade, Keeping or Maintaining of Sales Suppression Devices.— Any person who shall purchase, use, possess, sell or offer to sell, install, transfer, update, upgrade, keep, or maintain any software or device designed for, or is capable of: (a) suppressing the creation of electronic records of sale transactions that a taxpayer is required to keep under existing tax laws and/or regulations; or (b) modifying, hiding, or deleting electronic records of sales transactions and providing a ready means of access to them, shall be punished by a fine of not less than Five hundred thousand pesos (₱500,000) but not more than Ten million pesos (₱10,000,000), and suffer imprisonment of not less than two (2) years but not more than four (4) years: Provided, That a cumulative suppression of electronic sales record in excess of the amount of Fifty million pesos (₱50,000,000) shall be considered as economic sabotage and shall be punished in the maximum penalty provided for under this provision."

"Sec. 265-A. Offenses Relating to Fuel Marking.— All offenses relating to fuel marking shall, in addition to the penalties imposed under Title X of the NIRC, as amended, Section 1401 of Republic Act No. 10863, otherwise known as the ‘Customs Modernization and Tariff Act (CMTA)’,and other relevant laws, be punishable as follows:

"The additional penalties of revocation of the license to practice his profession in case of a practitioner, and the closure of the fuel testing facility, may also be imposed at the instance of the court."

"Sec. 269. Violations Committed by Government Enforcement Officers. - x x x

"Provided, That the provisions of the foregoing paragraph notwithstanding, any internal revenue officer for which a prima facie case of grave misconduct has been established shall, after due notice and hearing of the administrative case and subject to Civil Service Laws, be dismissed from the revenue service: Provided, further, That the term ‘grave misconduct’, as defined in the Civil Service Law, shall include the issuance of fake letters of authority and receipts, forgery of signature, usurpation of authority and habitual issuance of unreasonable assessments.

"Sec. 288. Disposition of Incremental Revenue -

"Notwithstanding any provisions herein to the contrary, the incremental revenues from the tobacco taxes under this Act shall be subject to Section 3 of Republic Act No. 7171, otherwise known as ‘An Act to Promote the Development of the Farmer in the Virginia Tobacco Producing Provinces’, and Section 8 of Republic Act No. 8240, otherwise known as ‘An Act Amending Sections 138, 139, 140 and 142 of the National Internal Revenue Code, as Amended, and for Other Purposes’.

"An interagency committee, chaired by the Department of Budget and Management (DBM) and co-chaired by DOF and DSWD, and comprised of the National Economic and Development Authority (NEDA), Department of Transportation (DOTr), Department of Education (DepEd), Department of Health (DOH), Department of Labor and Employment (DOLE), National Housing Authority (NHA), Sugar Regulatory Administration (SRA), Department of the Interior and Local Government (DILG), Department of Energy (DOE), NFA, and TESDA, is hereby created to oversee the identification of qualified beneficiaries and the implementation of these projects and programs: Provided, That qualified beneficiaries under Subsection (c) hereof shall be identified using the National ID System which may be enacted by Congress.

"Within sixty (60) days from the end of the three (3)-year period from the effectivity of this Act, the interagency committee and respective implementing agencies for the above programs shall submit corresponding program assessments to the COCCTRP. The National Expenditure Program from 2019 onwards shall provide line items that correspond to the allocations mandated in the provisions above.

"At the end of five (5) years from the effectivity of this Act, all earmarking provisions under Subsection (F), shall cease to exist and all incremental revenues derived under this Act shall accrue to the General Fund of the government."