AN ACT TO AMEND CERTAIN SECTIONS OF TITLE V OF COMMONWEALTH ACT NUMBERED FOUR HUNDRED SIXTY-SIX

REPUBLIC ACT No. 1612

AN ACT TO AMEND CERTAIN SECTIONS OF TITLE V OF COMMONWEALTH ACT NUMBERED FOUR HUNDRED SIXTY-SIX, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES.

Section 1. Section one hundred seventy-eight of Commonwealth Act Numbered Four hundred sixty-six, as amended, is hereby further amended to read as follows:

"Sec. 178. Payment of privilege taxes. A privilege tax must be paid before any business or occupation hereinafter specified can be lawfully begun or pursued. The tax on business is payable for every separate or distinct establishment or place where business subject to the tax is conducted; and one line of business or occupation does not become exempt by being conducted with some other business or occupation for which such tax has been paid.

"The tax on a business must be paid by the person, firm, or company conducting the same; the occupation tax, by each individual engaged in a calling subject thereto."

Section 2. Section one hundred eighty of Commonwealth Act Numbered Four hundred sixty-six,...

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Summary of Republic Act No. 1612

Privilege Taxes
- Privilege tax must be paid before starting any business or occupation (Section 1)
- Fixed taxes are due on or before January 20 each year, or before starting a new business (Section 2)
- Fixed taxes for various businesses and occupations are specified (Section 4)
- Exemptions from fixed taxes are listed (Section 4)

Percentage Taxes
- Percentage tax on sales of jewelry, automobiles, toilet preparations, etc. at 50% of gross value (Section 6)
- Percentage tax on sales of sporting goods, refrigerators, etc. at 30% of gross value (Section 7)
- Percentage tax on sales of other articles at 7% of gross value (Section 8)
- Percentage tax on proprietors of rope factories, sugar centrals, rice mills, etc. at 2% of gross value (Section 10)
- Compensating tax on purchases from outside the Philippines equivalent to percentage taxes (Section 11)
- Percentage tax on contractors, proprietors of dockyards, etc. at 3% of gross receipts (Section 12)
- Percentage tax on restaurants, bars, cafes, etc. ranging from 3% to 20% of gross receipts (Section 12)

Other Provisions
- Transactions and persons not subject to percentage tax are listed (Section 9)
- Definitions of terms like "real estate broker" and "real estate dealer" are provided (Section 14)
- Continuation of business after death of owner is allowed without additional payment (Section 15)
- Revocation of privilege for liquor or tobacco dealers in certain cases (Section 16)
- Registration of business name and details with revenue agent (Section 17)
- Requirement to issue sales invoices or receipts (Section 18)
- Penalties for unlawful pursuit of business or occupation (Section 18)
- Penalties for failure to make returns or pay taxes (Section 20)