REPUBLIC ACT No. 594
AN ACT TO AMEND CERTAIN SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE RELATING TO PRIVILEGE TAXES ON BUSINESS
Section 1. Paragraph (B) of section one hundred eighty-three of Commonwealth Act Numbered Four hundred sixty-six, otherwise known as the National Internal Revenue Code, as amended by Republic Act Numbered Two hundred fifty-three, is hereby further amended to read as follows:
"(B) Sales tax on imported articles. - When the articles are imported, the percentage taxes established in sections one hundred eighty-four, one hundred eighty-five, and one hundred eighty-six of this Code shall be paid in advance by the importer, in accordance with regulations promulgated by the Secretary of Finance and prior to the release of such articles form customs' custody, based on the import invoice value thereof, certified to as correct by the Philippine Consul at the port of origin if there is any, including freight, postage, insurance, commission, customs duty, and all similar charges, plus one hundred per centum of such total value in the case of articles...
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Republic Acts
AN ACT TO AMEND CERTAIN SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE RELATING TO PRIVILEGE TAXES ON BUSINESS.
Republic Act No. 594
Summary of Republic Act No. 594
Amendments to the National Internal Revenue Code on Privilege Taxes on Business
- Sales Tax on Imported Articles (Section 1)
• Percentage taxes on imported articles under Sections 184, 185, and 186 shall be paid in advance by the importer before release from customs custody.
• The tax is based on the import invoice value, including freight, postage, insurance, commission, customs duty, and similar charges, plus:
•• 100% of the total value for articles under Section 184.
•• 50% of the total value for articles under Section 185.
•• 25% of the total value for articles under Section 186.
• The tax does not apply to articles used by the importer for manufacturing taxable goods or for consignment abroad.
- Percentage Tax on Sales of Jewelry, Automobiles, Toilet Preparations, and Others (Section 2)
• 50% tax on the gross value of the following articles sold by the manufacturer or producer (Section 184):
•• Automobile chassis and bodies with selling price exceeding ₱5,000 but not exceeding ₱7,000 (75% tax if selling price exceeds ₱7,000).
•• Jewelry, pearls, precious and semi-precious stones, and imitations thereof.
•• Perfumes, cosmetics, hair products (except tooth and mouth washes, dentifrices, tooth paste, and talcum or medicated toilet powders).
•• Dice and mahjong sets.
•• Beauty parlor equipment and accessories.
•• Polo mallets and balls, golf bags, clubs and balls, chess and checker boards and pieces.
• Cost of taxable materials used in manufacturing is deductible from the gross selling price.
- Percentage Tax on Sales of Automobiles, Sporting Goods, Refrigerators, and Others (Section 3)
• 30% tax on the gross selling price of the following articles sold by the manufacturer or producer (Section 185):
•• Automobile chassis and bodies with selling price not exceeding ₱5,000.
•• Watches and clocks valued over ₱50, marine glasses, field glasses, binoculars, and cinematographic films up to 8mm width.
•• Fishing rods and reels.
•• Celluloid and bakelite.
•• Refrigerators over 7 cubic feet (20% tax for 7 cubic feet or less).
•• Beverage coolers, ice cream cabinets, water coolers, food and beverage storage cabinets, ice making machines, and mild cooler cabinets with mechanical refrigeration.
•• Phonographs, radios, phonograph records, juke boxes, gramophones, and similar music reproduction devices.
•• Firearms, parts, accessories, and ammunition (except .22-caliber firearms and ammunition sold to Armed Forces and government agencies).
•• Electric fans and air circulators (except industrial use), electric water heaters, electric flat irons (20% tax if selling price does not exceed ₱50), electric cooking appliances, electric mixers, whippers, juicers, and household vacuum cleaners.
•• Unexposed photographic films, plates, papers, apparatus, and equipment (20% tax).
•• Neon-tube signs, electric signs, and electric advertising devices.
•• Washing machines of all types.
•• Air-conditioning units and parts or accessories.
•• Mechanical lighters.
•• Upholstered furniture (except rattan), tables, desks, chairs, showcases, bookcases, lockers, and cabinets (except filing cabinets and iron or steel chairs and tables costing not more than ₱6 each).
•• Textiles made of silk, wool, linen or nylon, wool and silk hats, and furs and manufactures thereof.
•• Fountain pens and parts or accessories with gross selling price exceeding ₱15 (taxed under Section 186 if selling price does not exceed ₱15).
• Cost of taxable materials used in manufacturing is deductible from the gross selling price.
- Percentage Tax on Sales of Other Articles (Section 4)
• 7% tax on the gross selling price of articles not enumerated in Sections 184 and 185, sold by the manufacturer or producer (Section 186).
• 5% tax on the selling price of all forest products, whether manufactured or in original form.
• For sawmill operators, the tax is computed on 33.33% of the gross cost of logs purchased during a quarter, including freight, insurance, and similar charges up to the mill site.
• Cost of taxable materials used in manufacturing is deductible from the gross selling price.
- Transactions and Persons Not Subject to Percentage Tax (Section 5)
• Transactions excluded from the percentage tax (Section 188):
•• Things subject to tax under Title IV of the National Internal Revenue Code.
•• Agricultural products and ordinary salt sold by the producer or owner of the land where produced.
•• Minerals and mineral products sold by the lessee, concessionaire, or owner of the mineral land.
•• Articles subject to tax under Section 189 of the National Internal Revenue Code.
• Persons exempt from the percentage tax:
•• Persons whose gross quarterly sales or receipts do not exceed ₱450.
•• Persons engaged in public market places exclusively in the retail sale of domestic meat, fruits, vegetables, game, poultry, fish, and other domestic food products.
•• Peddlers and sellers at fixed stands engaged exclusively in the retail sale of domestic meat, fruits, vegetables, game, poultry, fish, and similar domestic food products, whose total stock in trade in any one day does not reach a retail value of ₱50.
•• Producers of commodities working in their own homes, consisting of parents and children living as one family, when the value of each day's production by each person capable of working is not in excess of ₱5.
•• Persons importing articles under the contract for the exclusive use of the Armed Forces of the Philippines.
- Date of Effectivity (Section 6)
• This Act shall take effect upon its approval on February 16, 1951.
Amendments to the National Internal Revenue Code on Privilege Taxes on Business
- Sales Tax on Imported Articles (Section 1)
• Percentage taxes on imported articles under Sections 184, 185, and 186 shall be paid in advance by the importer before release from customs custody.
• The tax is based on the import invoice value, including freight, postage, insurance, commission, customs duty, and similar charges, plus:
•• 100% of the total value for articles under Section 184.
•• 50% of the total value for articles under Section 185.
•• 25% of the total value for articles under Section 186.
• The tax does not apply to articles used by the importer for manufacturing taxable goods or for consignment abroad.
- Percentage Tax on Sales of Jewelry, Automobiles, Toilet Preparations, and Others (Section 2)
• 50% tax on the gross value of the following articles sold by the manufacturer or producer (Section 184):
•• Automobile chassis and bodies with selling price exceeding ₱5,000 but not exceeding ₱7,000 (75% tax if selling price exceeds ₱7,000).
•• Jewelry, pearls, precious and semi-precious stones, and imitations thereof.
•• Perfumes, cosmetics, hair products (except tooth and mouth washes, dentifrices, tooth paste, and talcum or medicated toilet powders).
•• Dice and mahjong sets.
•• Beauty parlor equipment and accessories.
•• Polo mallets and balls, golf bags, clubs and balls, chess and checker boards and pieces.
• Cost of taxable materials used in manufacturing is deductible from the gross selling price.
- Percentage Tax on Sales of Automobiles, Sporting Goods, Refrigerators, and Others (Section 3)
• 30% tax on the gross selling price of the following articles sold by the manufacturer or producer (Section 185):
•• Automobile chassis and bodies with selling price not exceeding ₱5,000.
•• Watches and clocks valued over ₱50, marine glasses, field glasses, binoculars, and cinematographic films up to 8mm width.
•• Fishing rods and reels.
•• Celluloid and bakelite.
•• Refrigerators over 7 cubic feet (20% tax for 7 cubic feet or less).
•• Beverage coolers, ice cream cabinets, water coolers, food and beverage storage cabinets, ice making machines, and mild cooler cabinets with mechanical refrigeration.
•• Phonographs, radios, phonograph records, juke boxes, gramophones, and similar music reproduction devices.
•• Firearms, parts, accessories, and ammunition (except .22-caliber firearms and ammunition sold to Armed Forces and government agencies).
•• Electric fans and air circulators (except industrial use), electric water heaters, electric flat irons (20% tax if selling price does not exceed ₱50), electric cooking appliances, electric mixers, whippers, juicers, and household vacuum cleaners.
•• Unexposed photographic films, plates, papers, apparatus, and equipment (20% tax).
•• Neon-tube signs, electric signs, and electric advertising devices.
•• Washing machines of all types.
•• Air-conditioning units and parts or accessories.
•• Mechanical lighters.
•• Upholstered furniture (except rattan), tables, desks, chairs, showcases, bookcases, lockers, and cabinets (except filing cabinets and iron or steel chairs and tables costing not more than ₱6 each).
•• Textiles made of silk, wool, linen or nylon, wool and silk hats, and furs and manufactures thereof.
•• Fountain pens and parts or accessories with gross selling price exceeding ₱15 (taxed under Section 186 if selling price does not exceed ₱15).
• Cost of taxable materials used in manufacturing is deductible from the gross selling price.
- Percentage Tax on Sales of Other Articles (Section 4)
• 7% tax on the gross selling price of articles not enumerated in Sections 184 and 185, sold by the manufacturer or producer (Section 186).
• 5% tax on the selling price of all forest products, whether manufactured or in original form.
• For sawmill operators, the tax is computed on 33.33% of the gross cost of logs purchased during a quarter, including freight, insurance, and similar charges up to the mill site.
• Cost of taxable materials used in manufacturing is deductible from the gross selling price.
- Transactions and Persons Not Subject to Percentage Tax (Section 5)
• Transactions excluded from the percentage tax (Section 188):
•• Things subject to tax under Title IV of the National Internal Revenue Code.
•• Agricultural products and ordinary salt sold by the producer or owner of the land where produced.
•• Minerals and mineral products sold by the lessee, concessionaire, or owner of the mineral land.
•• Articles subject to tax under Section 189 of the National Internal Revenue Code.
• Persons exempt from the percentage tax:
•• Persons whose gross quarterly sales or receipts do not exceed ₱450.
•• Persons engaged in public market places exclusively in the retail sale of domestic meat, fruits, vegetables, game, poultry, fish, and other domestic food products.
•• Peddlers and sellers at fixed stands engaged exclusively in the retail sale of domestic meat, fruits, vegetables, game, poultry, fish, and similar domestic food products, whose total stock in trade in any one day does not reach a retail value of ₱50.
•• Producers of commodities working in their own homes, consisting of parents and children living as one family, when the value of each day's production by each person capable of working is not in excess of ₱5.
•• Persons importing articles under the contract for the exclusive use of the Armed Forces of the Philippines.
- Date of Effectivity (Section 6)
• This Act shall take effect upon its approval on February 16, 1951.