Amending The National Internal Revenue Code Of 1977, As Amended, By Adding New Sections To Title Vii And Title Viii Thereof

MALACAÑANG
M a n i l a

PRESIDENTIAL DECREE No. 1724

AMENDING THE NATIONAL INTERNAL REVENUE CODE OF 1977, AS AMENDED, BY ADDING NEW SECTIONS TO TITLE VII AND TITLE VIII THEREOF

WHEREAS, mineral and forest products have been greatly affected by changes in international market conditions; and

WHEREAS, in order to provide a mechanism which is responsive to such changes in international market conditions, and which could also be a tool for economic and industrial policies, it is necessary that the National Internal Revenue Code of 1977, as amended, be further amended accordingly.

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

Section 1. A new Section 259-A is hereby added to Title VII of the National Internal Revenue Code of 1977, as amended, which shall read as follows:

"Sec. 259(a). Flexibility Clause. In the interest of the national economy and general welfare, the President, upon recommendation of the Minister of both...

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Flexibility Clause for Mineral and Forest Products Taxation

- Empowers the President to revise tax rates and classification of mineral products [Section 1, 259-A]
- Empowers the President to revise tax rates and classification of forest products [Section 2, 281-A]

Conditions for exercising the authority:
• Where economic development requires redirecting expenditures or consumption patterns [Sections 259-A, 281-A(a)]
• When currency fluctuations or inflation/deflation make existing tax base and rates unrealistic [Sections 259-A, 281-A(b)]
• To counter adverse actions by other countries or adverse international market conditions [Sections 259-A, 281-A(c)]
• To obviate unemployment and economic/social dislocation [Sections 259-A, 281-A(d)]

Procedure:
• President acts upon recommendation of Ministers of Finance and Natural Resources [Sections 259-A, 281-A]
• Public hearing shall be held whenever practicable, and interested parties shall be given reasonable opportunity to be heard [Sections 259-A, 281-A]