REPUBLIC ACT No. 6125
AN ACT IMPOSING A STABILIZATION TAX ON CONSIGNMENTS ABROAD TO ACCELERATE THE ECONOMIC DEVELOPMENT OF THE PHILIPPINES AND FOR OTHER PURPOSES.
Section 1. There shall be imposed, assessed and collected a stabilization tax on the gross F.O.B. peso proceeds, based on the rate of exchange prevailing at the time of receipt of such proceeds, whether partial or total, of any exportation of the following products in accordance with the following schedule:
a. In the case of logs, copra, centrifugal sugar, and copper ore and concentrates:
Ten per centum of the F.O.B. peso proceeds of exports received on or after the date of effectivity of this Act to June thirty, nineteen hundred seventy-one;
Eight per centum of the F.O.B. peso proceeds of exports received from July first, nineteen hundred seventy-one to June thirty, nineteen hundred seventy-two;
Six per centum of the F.O.B. peso proceeds of exports received from July first, nineteen hundred seventy-two to June thirty, nineteen hundred seventy-three; and
Four per centum of the...
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Republic Acts
AN ACT IMPOSING A STABILIZATION TAX ON CONSIGNMENTS ABROAD TO ACCELERATE THE ECONOMIC DEVELOPMENT OF THE PHILIPPINES AND FOR OTHER PURPOSES.
Republic Act No. 6125
Summary of Republic Act No. 6125:
Imposition of Stabilization Tax on Exports
- A stabilization tax is imposed on the gross F.O.B. peso proceeds of exports of certain products, based on the prevailing exchange rate at the time of receipt. (Section 1)
- The tax rates vary depending on the product and the period of export, ranging from 2% to 10%. (Section 1)
- The tax applies to logs, copra, centrifugal sugar, copper ore and concentrates, molasses, coconut oil, desiccated coconut, iron ore and concentrates, chromite ore and concentrates, copra meal or cake, unmanufactured abaca, unmanufactured tobacco, veneer core and sheets, plywood, lumber, canned pineapples, and bunker fuel oil. (Section 1)
- Any export product with an aggregate annual F.O.B. value exceeding $5 million in any calendar year during the effectivity of the Act shall also be subject to the tax rates. (Section 1)
- No exemptions from the tax are allowed. (Section 1)
Collection and Payment of Tax
- The Central Bank of the Philippines, through authorized agent banks, shall assess and collect the tax within 10 banking hours from the realization of the F.O.B. proceeds. (Section 2)
- Exporters are required to convert all foreign exchange proceeds into pesos through authorized agent banks. (Section 2)
- Penalties for non-payment or deficiency include a surcharge of 25% plus 1% for every banking day of delay, or 50% in case of false or fraudulent statements. (Section 3)
Use of Tax Proceeds
- 50% of the collection shall be deposited in a Special Account with the Central Bank for servicing domestic and foreign debts, retiring existing debts held by the Central Bank, and amortizing the existing budgetary deficit. (Section 4a)
- 25% shall be deposited in a Special Account with the Central Bank for counterpart requirements of projects financed by international agencies and bilateral agreements. (Section 4b)
- 25% shall be deposited with the Development Bank of the Philippines in a Special Account for granting loans to export industries, agricultural development projects, and industries affected by Central Bank Circular 289, with priority given to loans for processing raw materials for export. (Section 4c)
Central Bank Reporting and Monitoring
- The Central Bank shall submit an inventory of its holdings of government securities, securities of government-owned entities, and its own issued evidences of indebtedness within 10 days of the Act's approval. (Section 5a)
- The Central Bank shall not add to its holdings of government securities and securities of government-owned entities, and shall endeavor to reduce or sell its own issued evidences of indebtedness if inflationary dangers exist. (Section 5b)
- The Central Bank shall submit quarterly reports on its holdings, issues, money supply, and rate of increase or decrease. (Section 5c)
Rules and Regulations
- The Central Bank shall promulgate rules and regulations for carrying out the provisions of the Act, which shall take effect 15 days after publication in three newspapers, one of which shall be in the national language. (Section 6)
Penalties
- Violations of the Act or its rules and regulations shall be punishable by a fine of not less than ₱10,000 and imprisonment of 3 to 6 years. (Section 7a)
- For corporations, partnerships, or associations, the president, directors, managers, agents, and representatives shall be held liable as principals. (Section 7b)
- For commercial banks, the principal offenders shall be permanently disqualified from holding any office or position in any bank or financial institution. (Section 7c)
- For Central Bank officers or employees, they shall suffer perpetual disqualification from holding public office or employment in any private bank or financial institution. (Section 7d)
- For alien offenders, they shall be deported after serving their sentence. (Section 7e)
Civil Actions and Enforcement
- Any Filipino citizen of age and not suffering from legal disqualification shall be considered a real party in interest in civil actions or proceedings for enforcing the Act. (Section 8)
- Suits shall not be dismissed on mere technical grounds, and collusion between parties or nuisance suits shall be prevented. (Section 8)
- Multiple suits based on the same cause of action shall be consolidated before the court where the first suit was assigned. (Section 8)
- Criminal actions can also be initiated by any Filipino citizen to enforce the provisions of the Act. (Section 8)
Uniform Exchange Rate
- During the effectivity of the Act, the prevailing exchange rate shall apply uniformly to all receipts from all export products. (Section 9)
Repealing Clause and Separability Clause
- All laws, executive orders, regulations, and circulars inconsistent with the Act are repealed or modified accordingly. (Section 10)
- If any provision of the Act is held unconstitutional, the validity of other provisions shall not be affected. (Section 11)
Effectivity
- The Act shall take effect upon its approval. (Section 12)
Imposition of Stabilization Tax on Exports
- A stabilization tax is imposed on the gross F.O.B. peso proceeds of exports of certain products, based on the prevailing exchange rate at the time of receipt. (Section 1)
- The tax rates vary depending on the product and the period of export, ranging from 2% to 10%. (Section 1)
- The tax applies to logs, copra, centrifugal sugar, copper ore and concentrates, molasses, coconut oil, desiccated coconut, iron ore and concentrates, chromite ore and concentrates, copra meal or cake, unmanufactured abaca, unmanufactured tobacco, veneer core and sheets, plywood, lumber, canned pineapples, and bunker fuel oil. (Section 1)
- Any export product with an aggregate annual F.O.B. value exceeding $5 million in any calendar year during the effectivity of the Act shall also be subject to the tax rates. (Section 1)
- No exemptions from the tax are allowed. (Section 1)
Collection and Payment of Tax
- The Central Bank of the Philippines, through authorized agent banks, shall assess and collect the tax within 10 banking hours from the realization of the F.O.B. proceeds. (Section 2)
- Exporters are required to convert all foreign exchange proceeds into pesos through authorized agent banks. (Section 2)
- Penalties for non-payment or deficiency include a surcharge of 25% plus 1% for every banking day of delay, or 50% in case of false or fraudulent statements. (Section 3)
Use of Tax Proceeds
- 50% of the collection shall be deposited in a Special Account with the Central Bank for servicing domestic and foreign debts, retiring existing debts held by the Central Bank, and amortizing the existing budgetary deficit. (Section 4a)
- 25% shall be deposited in a Special Account with the Central Bank for counterpart requirements of projects financed by international agencies and bilateral agreements. (Section 4b)
- 25% shall be deposited with the Development Bank of the Philippines in a Special Account for granting loans to export industries, agricultural development projects, and industries affected by Central Bank Circular 289, with priority given to loans for processing raw materials for export. (Section 4c)
Central Bank Reporting and Monitoring
- The Central Bank shall submit an inventory of its holdings of government securities, securities of government-owned entities, and its own issued evidences of indebtedness within 10 days of the Act's approval. (Section 5a)
- The Central Bank shall not add to its holdings of government securities and securities of government-owned entities, and shall endeavor to reduce or sell its own issued evidences of indebtedness if inflationary dangers exist. (Section 5b)
- The Central Bank shall submit quarterly reports on its holdings, issues, money supply, and rate of increase or decrease. (Section 5c)
Rules and Regulations
- The Central Bank shall promulgate rules and regulations for carrying out the provisions of the Act, which shall take effect 15 days after publication in three newspapers, one of which shall be in the national language. (Section 6)
Penalties
- Violations of the Act or its rules and regulations shall be punishable by a fine of not less than ₱10,000 and imprisonment of 3 to 6 years. (Section 7a)
- For corporations, partnerships, or associations, the president, directors, managers, agents, and representatives shall be held liable as principals. (Section 7b)
- For commercial banks, the principal offenders shall be permanently disqualified from holding any office or position in any bank or financial institution. (Section 7c)
- For Central Bank officers or employees, they shall suffer perpetual disqualification from holding public office or employment in any private bank or financial institution. (Section 7d)
- For alien offenders, they shall be deported after serving their sentence. (Section 7e)
Civil Actions and Enforcement
- Any Filipino citizen of age and not suffering from legal disqualification shall be considered a real party in interest in civil actions or proceedings for enforcing the Act. (Section 8)
- Suits shall not be dismissed on mere technical grounds, and collusion between parties or nuisance suits shall be prevented. (Section 8)
- Multiple suits based on the same cause of action shall be consolidated before the court where the first suit was assigned. (Section 8)
- Criminal actions can also be initiated by any Filipino citizen to enforce the provisions of the Act. (Section 8)
Uniform Exchange Rate
- During the effectivity of the Act, the prevailing exchange rate shall apply uniformly to all receipts from all export products. (Section 9)
Repealing Clause and Separability Clause
- All laws, executive orders, regulations, and circulars inconsistent with the Act are repealed or modified accordingly. (Section 10)
- If any provision of the Act is held unconstitutional, the validity of other provisions shall not be affected. (Section 11)
Effectivity
- The Act shall take effect upon its approval. (Section 12)