EXECUTIVE ORDER NO. 36 August 1, 1986
FURTHER AMENDING CERTAIN SECTIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED
WHEREAS, there is a need to simplify the sales tax structure to effect better compliance and administration;
WHEREAS, to recoup the differential arising from the simplification of the sales tax structure with respect to automobiles, there is a need to impose an additional excise tax on certain automobiles.
NOW THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order:
Sec. 1. Section 162, subparagraph (c), of the National Internal Revenue Code, as amended, is hereby further amended to read as follows:
"(c) Imported Articles. When the articles are imported, the percentage taxes established in Section 163 of this Code shall be paid in advance by the importer prior to the release of such articles from customs custody, based on the total value used by the Bureau of Customs in determining tariff and customs duties, including customs duties and other charges. On the original sale, barter, exchange or transfer of such...
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Executive Orders
Further Amending Certain Sections Of The National Internal Revenue Code, As Amended
Executive Order No. 36
Summary of Executive Order No. 36
Simplification of Sales Tax Structure and Additional Excise Tax on Automobiles
- Amends Section 162(c) of the National Internal Revenue Code (NIRC) to clarify the sales tax treatment of imported articles. (Sec. 1)
• Imported articles are subject to percentage taxes under Section 163 upon importation, paid in advance by the importer.
• On the original sale by the importer, a sales tax at the same rate is levied on the gross value, with a credit for the tax paid in advance.
• Exemption for articles used by the importer in manufacturing excise tax-exempt products (except automobiles).
- Amends Section 163 of the NIRC to revise the sales tax rates on original sales. (Sec. 2)
• 30% tax on non-essential articles like jewelry, perfumes, playing cards, automobiles (except trucks, jeeps, utility vehicles), yachts, musical instruments, firearms, vacuum cleaners, washing machines, silk/wool textiles, beauty equipment, toys, electronics, and air conditioners.
• 10% tax on essential articles like processed food, dairy products, bread, cooking oil, beverages, wheat flour, clothing, medicines, soap, stationery, construction materials, animal feeds, fertilizers, pesticides, and motor vehicle spare parts (except tires).
• 0% tax on agricultural products in their original state, including salt, fish, and milled rice/corn.
• 20% tax on other articles not covered by the above categories.
- Introduces a new Section 164 to impose a 1.5% tax on every subsequent sale of articles, except agricultural products in their original state which are taxed at 0%. (Sec. 3)
- Repeals Section 165 of the NIRC. (Sec. 4)
- Amends Section 166 of the NIRC to allow tax credits for excise, sales, or miller's tax paid on raw materials used in manufacturing finished products, with provisions for excess tax credits. (Sec. 5)
- Amends Section 167 of the NIRC to exempt certain articles and transactions from sales tax, including original sales by manufacturers of excise tax-exempt products (except automobiles), subsequent sales of fuels (except lubricating oil), newspapers/magazines, exported articles, and sales between registered exporters. (Sec. 6)
- Amends Section 169 of the NIRC to impose a compensating tax on imported goods at the rates prescribed in Section 163, based on the total value used for customs duties. (Sec. 7)
- Introduces a new Section 135-A to impose an ad valorem tax on automobiles based on engine displacement and the manufacturer's/importer's selling price, net of excise and sales taxes. The tax rates range from 5% to 20% for gasoline and diesel vehicles. (Sec. 8)
- Repeals or modifies inconsistent laws, orders, issuances, rules, and regulations. (Sec. 9)
- Effective date: August 1, 1986. (Sec. 10)
Simplification of Sales Tax Structure and Additional Excise Tax on Automobiles
- Amends Section 162(c) of the National Internal Revenue Code (NIRC) to clarify the sales tax treatment of imported articles. (Sec. 1)
• Imported articles are subject to percentage taxes under Section 163 upon importation, paid in advance by the importer.
• On the original sale by the importer, a sales tax at the same rate is levied on the gross value, with a credit for the tax paid in advance.
• Exemption for articles used by the importer in manufacturing excise tax-exempt products (except automobiles).
- Amends Section 163 of the NIRC to revise the sales tax rates on original sales. (Sec. 2)
• 30% tax on non-essential articles like jewelry, perfumes, playing cards, automobiles (except trucks, jeeps, utility vehicles), yachts, musical instruments, firearms, vacuum cleaners, washing machines, silk/wool textiles, beauty equipment, toys, electronics, and air conditioners.
• 10% tax on essential articles like processed food, dairy products, bread, cooking oil, beverages, wheat flour, clothing, medicines, soap, stationery, construction materials, animal feeds, fertilizers, pesticides, and motor vehicle spare parts (except tires).
• 0% tax on agricultural products in their original state, including salt, fish, and milled rice/corn.
• 20% tax on other articles not covered by the above categories.
- Introduces a new Section 164 to impose a 1.5% tax on every subsequent sale of articles, except agricultural products in their original state which are taxed at 0%. (Sec. 3)
- Repeals Section 165 of the NIRC. (Sec. 4)
- Amends Section 166 of the NIRC to allow tax credits for excise, sales, or miller's tax paid on raw materials used in manufacturing finished products, with provisions for excess tax credits. (Sec. 5)
- Amends Section 167 of the NIRC to exempt certain articles and transactions from sales tax, including original sales by manufacturers of excise tax-exempt products (except automobiles), subsequent sales of fuels (except lubricating oil), newspapers/magazines, exported articles, and sales between registered exporters. (Sec. 6)
- Amends Section 169 of the NIRC to impose a compensating tax on imported goods at the rates prescribed in Section 163, based on the total value used for customs duties. (Sec. 7)
- Introduces a new Section 135-A to impose an ad valorem tax on automobiles based on engine displacement and the manufacturer's/importer's selling price, net of excise and sales taxes. The tax rates range from 5% to 20% for gasoline and diesel vehicles. (Sec. 8)
- Repeals or modifies inconsistent laws, orders, issuances, rules, and regulations. (Sec. 9)
- Effective date: August 1, 1986. (Sec. 10)