Amending Sections 187 And 202 Of The National Internal Revenue Code, As Amended, And Providing For The Registration Of Export Produces And Trades With The Philippine Export Councils.

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PRESIDENTIAL DECREE No. 1469

AMENDING SECTIONS 187 AND 202 OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND PROVIDING FOR THE REGISTRATION OF EXPORT PRODUCES AND TRADES WITH THE PHILIPPINE EXPORT COUNCILS.

WHEREAS, the development and promotion of Philippine export is essential to economic growth;

WHEREAS, there are many export producers which lack the facilities and expertise necessary for direct exports;

WHEREAS, it is necessary to encourage these producers to sell to export traders by extending to them the tax benefits available to direct exporters under the National Internal Revenue Code, As amended:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the republic of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree:

Section 1. Section 187 of the National Internal Revenue Code, as amended, is hereby amended by adding the following definition of words and phrases:

"(y) 'Registered export producer' shall mean any person, corporation, partnership, or other entity doing business in the...

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Summary of Presidential Decree No. 1469

Definitions (Section 1):
- "Registered export producer" is defined as an entity engaged in manufacturing, production, or processing of export products, registered with Philippine Export Councils, and directly exporting or selling to registered export traders, other export producers, or foreign tourists.
- "Registered export trader" is defined as an entity engaged in buying Philippine-made products and subsequently exporting them, registered with Philippine Export Councils.
- "Export sales" is defined as the Philippine port F.O.B. value of exported products, or the net selling price of export products sold by a registered export producer to another export producer, registered export trader, or foreign tourists.

Tax Exemption (Section 2):
- Articles sold by "registered export producers" to (1) other "registered export producers", (2) "registered export traders", or (3) foreign tourists or travelers, which are considered as "export sales", are not subject to percentage tax on sales.

Registration Requirements (Sections 3 and 4):
- To avail of tax benefits for indirect exports, export producers and export traders must register with the Philippine Export Councils.
- Export producers must show proof of:
    1. Engagement in manufacturing, processing, or production of export articles or products (Section 4(a)(1)).
    2. Products meeting quality standards set by the Bureau of Standards (Section 4(a)(2)).
- Export traders must show proof of export operations, including products for export, expected revenues, and selling and administrative costs (Section 4(b)).

Certificate of Registration and Revocation (Section 5):
- Upon qualification, the Philippine Export Councils will issue a certificate of registration to the export producer or export trader.
- The certificate can be revoked on the following grounds:
    1. Violation of the provisions of this Decree or its implementing rules and regulations (Section 5(1)).
    2. Violation of laws relating to taxation, currency, immigration, national economy, or security (Section 5(2)).
    3. Failure to meet the quality standards set by the Bureau of Standards (Section 5(3)).

Implementation (Section 6):
- The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue in consultation with the Chairman/President of the Philippine Export Councils, shall promulgate the necessary rules and regulations for the effective implementation of this Decree.

Effectivity (Section 7):
- This Decree shall take effect upon approval.