Department Order No. 12-78, Prescribing the Rules and Regulations for the Implementation of Presidential Decree No. 1352

May 16, 1978 REVENUE MEMORANDUM CIRCULAR NO. 037-78 SUBJECT : Department Order No. 1 2-7 8, Prescribing the Rules and Regulations for the Implementation of Presidential Decree No. 1 35 2 TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, quoted hereunder is Department Order No. 12-78, dated May 12, 1978 of the Department of Finance, prescribing the rules and regulations to implement Presidential Decree No. 1352: "DEPARTMENT ORDER NO. 12-78 "SUBJECT : Rules and Regulations to Implement Presidential Decree No. 1352, entitled, IMPOSING A FIVE PERCENT CUSTOMS DUTY AND FIVE PERCENT INTERNAL REVENUE TAX IN LIEU OF THE DUTY AND/OR TAX-FREE IMPORTATION PRIVILEGE. "TO : The Commissioner of Customs "In view of the issuance of Presidential Decree No. 1352 on April 21, 1978, the following rules and regulations are hereby issued for the effective implementation of the provisions of the Decree. "Section 1. As a general rule, all importations which are presently exempted fully or partially from the payment of customs duties and/or internal revenue taxes under the provisions of general or special laws; those made under special charters granting franchises and/or similar provisions of general and special laws, shall be subject to five percent customs duty and five percent internal revenue tax. "Section 2. The five percent customs duty shall be based on the Home Consumption Value of the imported article as determined under Section 201 of the Tariff and Customs Code, as amended. In case of reappraisement, the reappraised value of the imported article as found by the appraiser and approved by the Collector shall be the basis of the duty imposable under the Decree. "Section 3. The five percent internal revenue tax shall be levied, assessed and collected in accordance with the pertinent provisions of the National Internal Revenue Code, as amended. "Section 4. The customs duty and internal revenue tax imposed under the Decree shall be applied to importations whether they enjoy total or partial exemptions and shall be paid before release of the shipment from customs duty. This, however, is without prejudice to the power of the Board of Investments to authorize the deferred payment of taxes and duties on importations of BOI-registered enterprises. "In case of partial exemptions, the 5% customs duty and 5% internal revenue tax as the case may be shall be assessed and collected provided that the partial exemption requires payment of duties/taxes less than the minimum prescribed in PD 1352. "Section 5. For purposes of determining lawful entry under tariff and customs laws, all the requisites, limitations and conditions prescribed in the general or special law or charter granting the exemption or privilege and under which the importation was made, and all other customs requirements for entry shall continue to be observed and complied with. "Section 6. All the present and existing procedures on the approval, documentation, processing, examination and release of shipments enjoying duty and tax exemptions or franchise privileges, shall continue to be in force and effect and shall be followed and complied with. "Section 7. The five percent customs duty and the five percent internal revenue tax shall not apply to the following: "(a) Those importations made under laws or decrees enumerated in the second paragraph of Section 1 of the Decree, namely: "1. Those which are exempt in pursuance of or in compliance with international treaties or commitments, such as the ADB-RP Host Agreement (1966); the 1947 Convention on Privileges and Immunities of the United Nations and its specialized agencies; the United States Agency for International Development-RP Agreement; the 1947 Military Bases Agreement; and other similar treaties or commitments; "2. Those which are exempt under Section 17 of Presidential Decree No. 66; "3. Those which are exempt under Section 12 of Presidential Decree No. 87; "4. Those which are exempt under Presidential Decree No. 215; "5. Those which are exempt under Section 1 of Presidential Decree No. 292; "6. Those which are exempt under Presidential Decree No. 529; "7. Those which are exempt under Section 15 of Presidential Decree No. 572; "8. Those which are exempt under Presidential Decree No. 604; "9. Those which are exempt under Presidential Decree No. 666; "10. Those Which are exempt under Section 76 of Presidential Decree No. 768; "11. Those which are exempt under Presidential Decree No. 783; "12. Those which are exempt under Presidential Decree No. 972; and "13. Those which are exempt under Section 18 of Republic Act No. 6234. "(b) Those importations granted duty exemption not as incentives under the provisions of Section 105 of the Tariff and Customs Code, as amended, except those specifically excepted under Section 2 of the Decree and those importations the internal revenue tax of which has been reduced by some incentives laws below the 5% minimum. "(c) Those which may be excepted by the President pursuant to Section 3 of the Decree. "(d) Importations by persons, firms or associations, whose tax exemption privileges have been withdrawn by P.D. Nos. 34, 69, 1177 and other related laws. "Section 8. The five percent customs duty and the five percent internal revenue tax imposed under the Decree shall apply to all importations entered or withdrawn for consumption on or after April 21, 1978. "Section 9. Any situation not covered by the foregoing shall be resolved on a case-to-case basis by the Commissioner of Customs in consultation with the Secretary of Finance. "Section 10. All existing customs and revenue rules and regulations or parts thereof inconsistent with this Order are hereby repealed and/or modified accordingly. "Section 11. This Order shall take effect immediately. (SGD.) CESAR VIRATA Secretary "May 12, 1978" All internal revenue officers and others concerned are hereby enjoined to be guided accordingly and to give this circular as wide a publicity as possible. aisa dc EFREN I. PLANA Acting Commissioner of Internal Revenue TAN-P4519-F2828-A-8