MALACAÑANG
M a n i l aPRESIDENTIAL DECREE No. 1393
AMENDING TITLE IV (SPECIFIC TAXES) OF THE NATIONAL INTERNAL REVENUE CODE OF 1977, BY ADDING A NEW SECTION THERETO PROVIDING FOR A FLEXIBILITY CLAUSE, AND FURTHER AMENDING SECTION 193 (c). TITLE V (TAXES ON BUSINESS), BY PROVIDING FOR ADDITIONAL CONDITIONS AND SPECIFIC LIMITATIONS ON THE EXERCISE OF THE POWER UNDER THE FLEXIBILITY CLAUSE.
WHEREAS, it is necessary to give flexibility to the tax system in order to improve and optimize its sensitiveness and conformity to the rapidly changing patterns of the economic, and political environment;
WHEREAS, the President is equipped with relevant data for the formulation of immediate, timely and effective measures to make the tax system more responsive to current conditions;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree the following:
Section 1. Title IV (Specific Taxes) of the National Internal Revenue Code of 1977 is hereby amended by adding a new section...
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Presidential Decrees
Amending Title Iv (Specific Taxes) Of The National Internal Revenue Code Of 1977, By Adding A New Section Thereto Providing For A Flexibility Clause, And Further Amending Section 193 (C). T
Presidential Decree No. 1393
Summary of Presidential Decree No. 1393
Flexibility Clause for Specific Taxes (Section 158-A):
- Empowers the President, upon recommendation of the Secretary of Finance and the National Economic and Development Authority (NEDA), to revise the rates of specific taxes.
- Conditions for exercising this authority:
• Where economic development requires redirecting expenditure or consumption patterns. (Section 158-A(a)(1))
• When currency fluctuations and/or inflation/deflation make existing taxable base and rates unrealistic or inconsistent with current price levels. (Section 158-A(a)(2))
• When necessary to counter adverse action by another country. (Section 158-A(a)(3))
- Limitations:
• Existing rates of specific taxes may be increased by not more than 50%, or decreased by not more than 10%. (Section 158-A(b)(1))
• Public hearing shall be held whenever practicable, and interested parties shall be given a reasonable opportunity to be heard. (Section 158-A(b)(2))
Flexibility Clause for Percentage Taxes (Section 193(c)):
- Empowers the President, upon recommendation of the Secretary of Finance and NEDA, to:
• Revise the rates of percentage taxes. (Section 193(c)(1)(a))
• Change the classification of articles enumerated in Sections 194, 195, 196, 197, 198, 199, and 201. (Section 193(c)(1)(b))
• Revise the taxable base levels in Sections 195 and 197. (Section 193(c)(1)(c))
- Conditions for exercising this authority:
• Where economic development requires redirecting expenditure or consumption patterns. (Section 193(c)(1)(1))
• Where technological and social changes necessitate changing the classification of certain articles based on essentiality or degree of manufacturing. (Section 193(c)(1)(2))
• When currency fluctuations and/or inflation/deflation make existing taxable base and/or price levels unrealistic or inconsistent with current price levels. (Section 193(c)(1)(3))
• When necessary to counter adverse action by another country. (Section 193(c)(1)(4))
- Limitations:
• Existing rates of percentage taxes may be increased by not more than 50%, or decreased by not more than 10%. (Section 193(c)(2)(a))
• Existing price levels may be increased or decreased by not more than 50%. (Section 193(c)(2)(b))
• Public hearing shall be held whenever practicable, and interested parties shall be given a reasonable opportunity to be heard. (Section 193(c)(2)(c))
Flexibility Clause for Specific Taxes (Section 158-A):
- Empowers the President, upon recommendation of the Secretary of Finance and the National Economic and Development Authority (NEDA), to revise the rates of specific taxes.
- Conditions for exercising this authority:
• Where economic development requires redirecting expenditure or consumption patterns. (Section 158-A(a)(1))
• When currency fluctuations and/or inflation/deflation make existing taxable base and rates unrealistic or inconsistent with current price levels. (Section 158-A(a)(2))
• When necessary to counter adverse action by another country. (Section 158-A(a)(3))
- Limitations:
• Existing rates of specific taxes may be increased by not more than 50%, or decreased by not more than 10%. (Section 158-A(b)(1))
• Public hearing shall be held whenever practicable, and interested parties shall be given a reasonable opportunity to be heard. (Section 158-A(b)(2))
Flexibility Clause for Percentage Taxes (Section 193(c)):
- Empowers the President, upon recommendation of the Secretary of Finance and NEDA, to:
• Revise the rates of percentage taxes. (Section 193(c)(1)(a))
• Change the classification of articles enumerated in Sections 194, 195, 196, 197, 198, 199, and 201. (Section 193(c)(1)(b))
• Revise the taxable base levels in Sections 195 and 197. (Section 193(c)(1)(c))
- Conditions for exercising this authority:
• Where economic development requires redirecting expenditure or consumption patterns. (Section 193(c)(1)(1))
• Where technological and social changes necessitate changing the classification of certain articles based on essentiality or degree of manufacturing. (Section 193(c)(1)(2))
• When currency fluctuations and/or inflation/deflation make existing taxable base and/or price levels unrealistic or inconsistent with current price levels. (Section 193(c)(1)(3))
• When necessary to counter adverse action by another country. (Section 193(c)(1)(4))
- Limitations:
• Existing rates of percentage taxes may be increased by not more than 50%, or decreased by not more than 10%. (Section 193(c)(2)(a))
• Existing price levels may be increased or decreased by not more than 50%. (Section 193(c)(2)(b))
• Public hearing shall be held whenever practicable, and interested parties shall be given a reasonable opportunity to be heard. (Section 193(c)(2)(c))