Publishing the Amendments Effected by R.A. No. 6110 to Sections 180, 182, 183, 184, 185, 185-A, 185-B, 186, 189, 191, 192, 194(g) and 208, of Title V of the Tax Code and the Creation of New Sections Therein (Sections 191-A and 195-B) Relative to Privilege Taxes on Business and Occupation

January 2, 1970 REVENUE MEMORANDUM CIRCULAR NO. 08-70 SUBJECT : Publishing the Amendments Effected by R.A. No. 6110 to Sections 180, 182, 183, 184, 185, 185-A, 185-B, 186, 189, 191, 192, 194(g) and 208, of Title V of the Tax Code and the Creation of New Sections Therein (Sections 191-A and 195-B) Relative to Privilege Taxes on Business and Occupation TO : All Internal Revenue Officers and Others Concerned For the information and guidance of all concerned, there is published below the pertinent provisions of Republic Act No. 6110 amending certain sections of Title V of the Tax Code, viz.: "SEC. 27. Section one hundred and eighty of the same Act is hereby amended to read as follows: "SEC. 180. Time for payment of fixed taxes . All fixed taxes shall be payable, at the option of the taxpayer, annually, on or before the twentieth of January or semi-annually, on or before the twentieth of January and July. But any person first beginning a business or occupation must pay the tax before engaging therein. "If the privilege tax is not paid within the time specified, the amount of the tax shall be increased by twenty-five per centum, the increment to be part of the tax." "SEC. 28. Section one hundred and eighty-two of the same Act is hereby amended to read as follows: "SEC. 182. Fixed taxes . (A) On business . (1) Persons subject to percentage tax . Unless otherwise provided, every person engaging in a business on which the percentage tax is imposed shall pay a fixed annual tax of fifty pesos. (2) Persons not subject to percentage tax . Every person who is not required to pay the percentage tax prescribed in Sections one hundred eighty-four, one hundred eighty-five and one hundred eighty-six shall pay for each calendar year or fraction thereof in which the person shall engage in business a fixed annual tax based upon his gross annual sales during the preceding calendar year, as follows: "Ten pesos, if the amount of the gross annual sales exceeds two thousands four hundred pesos but does not exceed ten thousand pesos; "Forty pesos, if the amount of the gross annual sales exceeds ten thousand pesos but does not exceed thirty thousand pesos; "Eighty pesos, if the amount of the gross annual sales exceeds thirty thousand pesos but does not exceed fifty thousand pesos; "One hundred thirty pesos, if the amount of the gross annual sales exceeds fifty thousand pesos but does not exceed seventy-five thousand pesos; "One hundred seventy-five pesos, if the amount of the gross annual sales exceeds seventy-five thousand pesos but does not exceed one hundred thousand pesos; "Two hundred fifty pesos, if the amount of the gross annual sales exceeds one hundred thousand pesos but does not exceed one hundred fifty thousand pesos; "Four hundred fifty pesos, if the amount of the gross annual sales exceeds one hundred fifty thousand pesos but does not exceed three hundred thousand pesos; "Eight hundred pesos, if the amount of the gross annual sales exceeds three hundred thousand pesos but does not exceed five hundred thousand pesos; "One thousand five hundred pesos, if the amount of the gross annual sales exceeds five hundred thousand pesos but does not exceed one million pesos; "Two thousand pesos if the amount of the gross annual sales exceeds one million pesos. If a merchant is engaged in two or more businesses, one or more of which is subject to, and the others exempt from, the percentage tax he shall pay the graduated fixed annual tax provided above, based on the individual sales of his business not subject to the percentage tax under this Title. The initial graduated fixed annual tax to be paid by the person first engaging in business subject to the said tax shall be ten pesos. (3) Other fixed taxes . The following fixed taxes shall be collected as follows, the amount stated being for the whole year, when not otherwise specified; "(a) Brewers, five thousand pesos; "(b) Distillers of spirits, one thousand pesos, if the annual production does not exceed one hundred thousand gauge liters; two thousand pesos if the annual production exceeds one hundred thousand gauge liters but does not exceed two hundred thousand gauge liters; three thousand pesos, if the annual production exceeds two hundred thousand gauge liters but does not exceed three hundred thousand gauge liters; four thousand pesos, if the annual production exceeds three hundred thousand gauge liters but does not exceed five hundred thousand gauge liters; and five thousand pesos, if the annual production exceeds five hundred thousand gauge liters: Provided, That if the annual production does not exceed ten thousand gauge liters, only one hundred pesos shall be collected. "(c) Rectifiers of distilled spirits, compounders, and repackers of wines or distilled spirits, one thousand pesos. "(d) Wholesale dealers of distilled spirits and wines. 1. In the City of Manila, one thousand pesos; 2. In chartered cities other than Manila, six hundred pesos; 3. In any other place, two hundred pesos. "(e) Wholesale dealers in fermented liquors, except basi, tuba and tapuy, two hundred pesos. "(f) Wholesale peddlers of distilled spirits and wines, two hundred pesos. "(g) Wholesale peddlers of fermented liquors, two hundred pesos. "(h) Retail liquor dealers, two hundred pesos. "(i) Retail vino dealers, twenty pesos. "(j) Retail dealers in fermented liquors, fifty pesos. "(k) Retail peddlers of distilled spirits, wine, and fermented liquors, fifty pesos. "(l) Wholesale leaf tobacco dealers, four hundred pesos. "(m) Wholesale dealers of cigars, cigarettes and other manufactured tobacco products, one hundred pesos. "(n) Wholesale peddlers of manufactured tobacco products, one hundred pesos. "(o) Retail leaf tobacco dealers, thirty pesos. "(p) Retail dealers of cigars, cigarettes and other manufactured tobacco products, twenty pesos. "(q) Retail peddlers of cigars, cigarettes and other manufactured tobacco products, twenty pesos. "(r) Manufacturers, importers or exporters of cigars, cigarettes and other manufactured tobacco products. 1. In the cities of Manila, Quezon, Pasay and Caloocan and in the Province of Rizal, one thousand pesos; 2. In any other place, five hundred pesos. "(s) Importers or exporters of leaf tobacco, scrap tobacco and other partially manufactured tobacco products, one thousand pesos. "(t) Manufacturers or importers of cigarette paper in bobbins or rolls, cigarette tipping paper or cigarette filter tips, one thousand pesos. "(u) Manufacturers or importers of playing cards, saccharine or sodium saccharinate or any of its other derivatives and salts and other artificial sweetening agents, lighter fluid in liquid or gaseous form, matches, firecrackers, denatured alcohol for motive power, five hundred pesos. "(v) Manufacturers, importers or exporters of petroleum or other manufactured oils and fuels from petroleum, two thousand pesos. "(w) Manufacturers, producers or importers of soft drinks or other mineral waters, four hundred pesos. "(x) Wholesale dealers of soft drinks or other mineral waters, fifty pesos. "(y) Wholesale peddlers of soft drinks, or other mineral waters, fifty pesos. "(z) Dealers in securities, one hundred and fifty pesos. "(aa) Real estate dealers, one hundred and fifty pesos, if the annual income from buying, selling, exchanging, leasing or renting property (whether on their own account as principals or as owners of rental property or properties) is over four thousand pesos but not exceeding ten thousand pesos; "Three hundred pesos, if the annual income exceeds ten thousand pesos but does not exceed thirty thousand pesos; "Five hundred pesos, if the annual income exceeds thirty thousand pesos but does not exceed fifty thousand pesos; and "One thousand pesos, if the annual income exceeds fifty thousand pesos. "(bb) Stock brokers, real estate brokers, commercial brokers, customs brokers and immigration brokers, three hundred pesos. "(cc) Owners of race tracks for each day on which races are run on any track, one thousand pesos. "(dd) Lending investors 1. In chartered cities and first class municipalities, five hundred pesos; 2. In second and third class municipalities, two hundred and fifty pesos; 3. In fourth and fifth class municipalities and municipal districts, one hundred and twenty-five pesos; Provided, That lending investors who do business as such in more than one province shall pay a tax of five hundred pesos. "(ee) Cinematographic film owners, lessors or distributors, three hundred pesos. "(ff) Pawnshops, five hundred pesos. "(gg) Banks, insurance companies, finance and investment companies doing business in the Philippines and franchise granties, five hundred pesos. "(hh) Operators, proprietors or lessees of theaters and cinema houses: first run, five hundred pesos; second run, two hundred pesos. "(ii) Operators, proprietors or lessees of boxing arenas, swimming pools, resorts, skating rinks, golf links and other places of amusement, one hundred pesos. "(jj) Night clubs and day clubs, one thousand pesos. "(kk) Cockpits and cabarets, five hundred pesos. "(ll) Jai-alai, for each day on which games are played, two hundred and fifty pesos. "(mm) Operators or owners of rice or corn mills shall be subject to an annual graduated fixed tax based upon total capacity per machine in accordance with the following schedule: Corn mill, not exceeding one hundred cavans per twelve hour capacity P30.00 Corn mill, exceeding one hundred cavans per twelve hour capacity 45.00 '"Kiskisan" type, not exceeding one hundred cavanes of palay per twelve hour capacity 50.00 '"Kiskisan" type, exceeding one hundred cavanes of palay per twelve hour capacity 75.00 '"Cono", of not exceeding one hundred cavanes of palay per twelve hour capacity 200.00 '"Cono", of not exceeding two hundred cavanes of palay per twelve hour capacity 400.00 '"Cono", of not exceeding three hundred cavanes of palay per twelve hour capacity 600.00 '"Cono", of not exceeding four hundred cavanes of palay per twelve hour capacity 900.00 '"Cono", of not exceeding five hundred cavanes of palay per twelve hour capacity 1,300.00 '"Cono", of not exceeding six hundred cavanes of palay per twelve hour capacity 1,800.00 '"Cono", of not exceeding seven hundred cavanes of palay per twelve hour capacity 2,500.00 '"Cono", of not exceeding eight hundred cavanes of palay per twelve hour capacity 3,200.00 '"Cono", of not exceeding nine hundred cavanes of palay per twelve hour capacity 4,000.00 '"Cono", of over one thousand cavanes of palay per twelve hour capacity 4,800.00 (B) On Occupation. Annual taxes on occupation shall be collected as follows: "(1) Seventy-five pesos: "(a) Lawyers, medical practitioners, architects, interior decorators, certified public accountant, civil, electrical, chemical, mechanical, mining, or sanitary engineers, insurance agents and sub-agents, customs brokers, marine surveyors, actuaries, registered master plumbers, veterinarians, dental surgeons, opticians, commercial aviators, professional appraisers or connoisseurs, of tobacco and other domestic or foreign products, licensed ship masters and marine chief engineers; "(b) Mechanical plant engineers, junior mechanical engineers and certified plant mechanics, unless he or she is a professional mechanical engineer and has paid the corresponding fixed tax for mechanical engineers. "The term 'mechanical engineers', as used herein, means professional mechanical engineers as defined in Commonwealth Act Numbered Two hundred and ninety-four. "(2) Fifty pesos: "(a) Land surveyors, chief mates, marine second engineer, pharmacists, registered nurses, chiropodist, tattooers, masseurs, pelotaries, jockeys, professional actors or actresses, stage performers, hostesses, statisticians, dietitians, commercial stewards and stewardesses, flight attendants, insurance adjusters and embalmers; "(b) Midwives, unless he or she is a registered nurse and has paid the corresponding fixed tax for nurses; "(c) Chemist, unless he or she is registered chemical engineer and has paid the corresponding fixed tax for chemical engineers; "(d) Associate electrical engineers, unless he or she is a professional electrical engineer and has paid the corresponding fixed tax for electrical engineers; "(e) Marine officer, unless he is a marine engineer or second engineer and has paid the corresponding fixed tax for marine engineers or second engineers. "Every professional legally authorized to practice his profession, who has paid the corresponding annual privilege tax on professions as herein imposed, shall be entitled to practice the profession for which he has been duly qualified under the law, in all parts of the Philippines without being subject to any other national tax, license or fee for the practice of the profession, if they have paid to the office concerned the registration fees required by their respective profession. "Any professional subject to the foregoing taxes shall write or print in deeds, receipts, prescriptions, reports, books of account, plans and designs, surveys and maps, as the case may be, his privilege tax receipt number. "Any individual or corporation employing a person subject to tax under Section one hundred eighty-two (B) shall require payment by that person of the privilege tax on occupation before employment and annually thereafter. (C) Exception. The following shall be exempt from the tax imposed under this section: "(1) Persons whose gross monthly sales or receipts do not exceed two hundred pesos. "(2) All Filipinos in public market places selling at retail all forms or kinds of food products, meats, fruits, vegetables, game, poultry, fish and other raw or cooked food products whose stock in trade on any one day does not exceed a retail value of one hundred pesos. The term 'public market' includes tabu, talipapa, and other barrio markets. "(3) Peddlers and sellers at fixed stands and other similar selling places engaged exclusively in the sale at retail of domestic meat, fruits, vegetables, game, poultry, fish, and similar domestic food products, whose stock in trade, on any one day does not exceed a retail value of one hundred pesos. "(4) Producers of commodities of all classes 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 six pesos. "(5) Owners of animal drawn two-wheeled vehicles. "(6) Owners of bancas. "(7) Electric plants owned by municipalities and municipal districts." "SEC. 29. Section one hundred and eighty-three of the same Act is hereby amended to read as follows: "SEC. 183. Payment of percentage taxes . (a) In general . It shall be the duty of every person conducting a business on which a percentage tax is imposed under this title, to make a true and complete return of the amount of his, her or its gross monthly sales, receipts or earnings or gross value of output actually removed from the factory or mill warehouse and within twenty days after the end of each month, pay the tax due thereon: Provided, That any person retiring from a business subject to the percentage tax shall notify the nearest internal revenue officer thereof, file his return or declaration, and pay the tax due thereon within twenty days after closing his business. "For purposes of this section, sales on consignment shall be considered actually sold on the day of sale or sixty days after the date consigned, whichever is earlier: Provided, however, That the corresponding adjustment shall be allowed for consigned goods actually returned to the consignor. "If the percentage tax in any business is not paid within the time specified above, the amount of the tax shall be increased by twenty-five per centum, the increment to be a part of the tax. "In case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the falsity or fraud, in which case the amount so added shall be collected in the same manner as the tax. "(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 the regulations promulgated by the Secretary of Finance and prior to the release of such articles from customs' custody, based on import invoice value thereof, certified to as correct under penalties of perjury 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 enumerated in section one hundred and eighty-four; fifty per centum of such total value in the case of articles enumerated in section one hundred eighty-five; one hundred eighty-five-A and one hundred eighty-five-B; and twenty-five per centum in the case of articles enumerated in section one hundred and eighty-six. The tax imposed in this section shall not apply to articles to be used by the importer himself in the manufacture or preparation of articles subject to specific tax or those for consignment abroad and are to form part thereof. "The tax herein imposed shall be collected in all cases where the original importer sold, transferred, or negotiated the imported articles to third persons before release thereof from customs' custody, regardless of the tax status of the original importer and the indorsee or transferee, the same to be paid by the transferee and/or indorsee. "The provisions of this Act shall not be construed as nullifying whatever interpretation the government has given to the word "importer" heretofore. "In the case of tax-free articles brought or imported into the Philippines by person, entities or agencies exempt from tax which are subsequently sold, transferred, or exchanged in the Philippines to non-exempt private persons or entities, the purchasers shall be considered the importers thereof. The tax due on such articles shall constitute a lien on the article itself superior to all other charges or liens, irrespective of the possessor thereof. "(c) Sales tax on articles manufactured locally and sold on installment basis . When the articles are manufactured locally and sold on installment term of at least twelve months, the percentage taxes established in sections one hundred eighty-four, one hundred eighty-five, and one hundred eighty-six of this Code shall be based on the cash prices of the articles, cash price being defined as the price at which an article is offered for sale on cash term to the public without any discount and/or rebate whatsoever during the tax period." SEC. 30. Section one hundred and eighty-four of the same Act is hereby amended to read as follows: "SEC. 184. Percentage tax on sales of jewelry, automobiles, toilet preparations and others . There shall be levied, assessed, and collected once only on every original sale, barter, exchange, or similar transaction for nominal or valuable considerations intended to transfer ownership of, or title to, the articles herein below enumerated a tax equivalent to seventy per centum of the gross value in money of the articles so sold, bartered, exchanged, or transferred, such tax to be paid by the manufacturer or producer: Provided, That where the articles enumerated hereinbelow are manufactured out of materials subject to tax under this section, the total cost of such materials, as duly established, shall be deductible from the gross selling price or gross value in money of such manufactured articles: "(a) Automobile chassis and bodies, the selling price of which does not exceed ten thousand pesos shall be taxed at the rate of one hundred per centum of such selling price: Provided, That where the selling price of an automobile exceeds ten thousand pesos but does not exceed fifteen thousand pesos the same shall be taxed at the rate of one hundred twenty-five per centum of such selling price: And provided, further, That where the selling price of an automobile exceeds fifteen thousand pesos but does not exceed twenty thousand pesos the same shall be taxed at the rate of one hundred and fifty per centum of such selling price: And provided, still further, That where the selling price of an automobile exceeds twenty thousand pesos, the same shall be taxed at the rate of two hundred per centum of such selling price. A sale of an automobile shall, for the purpose of this section, be considered to be a sale of the chassis and of the body together with parts and accessories with which the same are usually equipped: Provided, however, That parts and accessories of automobiles imported as replacements or as completely knocked down parts as well as locally manufactured parts and accessories for the assembly of automobiles shall be subject to tax under section one hundred and eighty-six: And provided, further, That the total cost of such materials or parts on which tax has already been paid under section one hundred and eighty-six, as duly established, shall be deductible from the gross selling price or gross value in money of the assembled or manufactured articles: And provided, still further, That for the purposes of this deduction locally manufactured parts shall be considered as if they had been subjected to twenty-five per cent mark-up. The term 'automobile' used herein shall not include motor vehicles classified as trucks. "The provisions of existing general and special laws to the contrary notwithstanding, there shall be no exemption from the tax in this subsection. "(b) All articles commonly or commercially known as jewelry, whether real or imitation; pearls, precious and semi-precious stones, and imitations thereof; articles made of, or ornamented, mounted or fitted with, precious metals or imitations thereof or ivory (not including surgical instruments, silver-plated wares, frames or mountings for spectacles or eyeglasses, and dental gold or gold alloys and other precious metals used in filling, mounting or fitting of the teeth); opera glasses, and lorgnettes. The term "precious metals" shall include platinum, gold, silver, and other metals of similar or greater value. The term "imitations thereof" shall include plantings and alloys of such metals. "(c) Perfumes, essences, extracts, toilet waters, cosmetics, petroleum jellies, hair oils, pomades, hair dressings, hair restoratives, hair dyes, aromatic cachous, toilet powders, and any similar substance, article, or preparations by whatsoever name known or distinguished; and any of the above which are used or applied or intended to be used or applied for toilet purposes; except tooth and mouth washes, dentifrices, tooth paste; and talcum or medicated toilet powders. "(d) Dice and mahjong sets; "(e) Beauty parlor equipment and accessories; and "(f) Pollo mallets and balls; golf bags, clubs and balls; and chess and checker boards and pieces. "Any part of accessory of the above-mentioned articles shall be taxed at the same rate as the finished articles." SEC. 31. Section one hundred and eighty-five of the same Act is hereby amended to read as follows: "SEC. 185. Percentage tax on sales of sporting goods , and others . There shall be levied, assessed, and collected once only on every original sale, barter, exchange, or similar transaction intended to transfer ownership of, or title to, the articles hereinbelow enumerated, a tax equivalent to forty per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged or transferred, such tax to be paid by the manufacturer or producer: Provided, That where the articles enumerated hereinbelow are manufactured out of materials subject to tax under this section, the total cost of such materials, as duly established, shall be deductible from the gross selling price or gross value in money of such manufactured articles. "(a) Luggage, trunks, valises, traveling bags, suitcases, satchels, overnight bags, hat boxes for use by travelers, beach bags, bathing suit bags, brief cases made of leather or imitation leather, and salesman's sample and display cases; purses, handbags, pocketbooks, wallets, billfolds and card, pass, and key cases; toilet cases and other cases, bags, and kits (without regard to size, shape, construction or material from which made) for use in carrying toilet articles or articles of wearing apparel; "(b) Watches and clocks and cases and movements therefor; "(c) Fishing rods and reels; "(d) Articles of which celluloid is the component material of chief value; "(e) (Repealed by Sec. 1, Republic Act No. 3029); "(f) (Repealed by Sec. 1, Republic Act No. 3029); "(g) Pianos; phonograph records (except those locally manufactured and those used for educational purposes); juke boxes; "(h) Firearms and cartridges or other forms of ammunition, except those locally manufactured: Provided, however, That no tax shall be collected on .22 caliber firearms and cartridges as well as other forms of ammunition sold or delivered directly to the Armed Forces of the Philippines or to any government instrumentality or agency as well as to any organization and persons engaged in maintaining peace and order for their use or issue. "(i) Electric fans and air circulators (except those locally manufactured and those specially adapted for industrial use); electric, gas or oil water heaters; electric flat irons, electric, gas or oil appliances of the type used for cooking, warming, or keeping warm food or beverage for consumption on the premises (except those locally manufactured); electric mixers, whippers, and juicers; and household type of electric vacuum cleaners; "(j) (Repealed by this Act); "(k) Neon-tube signs, electric signs, and electric advertising devices; "(l) Washing machines of all types; "(m) (Repealed by Sec. 1, Republic Act No. 3029); "(n) Mechanical lighters; "(o) Upholstered furniture, tables, desks, chairs, showcases, bookcases, lockers, and cabinets (other than filing cabinets) of which wood, rattan or bamboo is not the component material of chief value (except those locally manufactured), but not including iron or steel chairs and tables costing not more than six pesos each and medical or dental equipment or apparatus; "(p) Textiles, wholly or in chief value of silk, wool, linen, or nylon or other synthetic and/or chemical fabrics (except those locally manufactured); wool and silk hats; and furs and manufactures thereof; "(q) Fountain pens the gross selling price of which exceeds fifteen pesos: Provided, That if their selling price does not exceed fifteen pesos, they shall be taxes at the rate prescribed in Section one hundred and eighty-six hereof; "(r) Toys and playthings of all sorts (without regard to material from which made), except those locally manufactured. Any part or accessory of the above-mentioned articles shall be taxed at the same rate as the finished articles. SEC. 32. Section one hundred and eighty-five-A of the same Act is hereby amended to read as follows: "SEC. 185-A. Percentage tax on sales of refrigerators , air-conditioners , beverage coolers , ice cream cabinets , and others . There shall be levied, assessed and collected once only on every original sale, barter, exchange, or similar transaction intended to transfer ownership of, or title to, the articles hereinbelow enumerated a tax equivalent to forty per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged or transferred, such tax to be paid by the manufacturer or producer: Provided, however, That where the articles hereinbelow enumerated are locally manufactured and come under the classification of non-integrated manufactured products as hereinafter defined, the tax shall be fifteen per centum: Provided, further, That where the articles hereinbelow enumerated are locally manufactured and come under the classification of integrated manufactured products as hereinafter defined, the tax shall be seven per centum: Provided, still further, That where the articles enumerated hereinbelow are manufactured out of materials subject to tax under this section, the total cost of such materials, as duly established, shall be deductible from the gross selling price or gross value in money of such manufactured articles: "(a) Refrigerators of all types; "(b) Beverage coolers, ice cream cabinets, water coolers food and beverage storage cabinets, ice-making machines, and mild cooler cabinets, each such article having, or being primarily designated for use with, a mechanical refrigerating unit operated by electricity, gas, kerosene, or other means; and "(c) Air-conditioning units. "Any part or accessory of the above-mentioned articles shall be taxed at the same rate as the finished articles. "The words 'integrated manufactured products' mean articles manufactured in a manufacturing enterprise which undertakes the operations of processing and/or physically converting raw materials such as metal sheets, plastic pellets, wires, rods, extrusion tubings, castings, forgings and chemical compounds into various intermediate components and parts, and subsequently assembling or fitting them together into completed and finished articles: Provided, however, That not less than eighty per centum of the total quantity, including the compressor unit, if any, of all the aforementioned intermediate components and parts of said products are manufactured by and within the said manufacturing enterprise. "The words 'non-integrated manufactured products' mean articles manufactured in a manufacturing enterprise which undertakes the operations of a manufacturing plant as defined in the preceding paragraph: Provided, however, That not less than fifty per centum of the total quantity of all the aforementioned intermediate components and parts of said products are manufactured by and within the said manufacturing enterprise." SEC. 33. Section one hundred and eighty-five-B of the same Act is hereby amended to read as follows: "SEC. 185-B. Percentage tax on sales of phonographs , combination radio and phonograph sets of all types , television sets , combination radio and television sets , combination radio-phonograph-television sets , gramophones , and similar articles . There shall be levied, assessed and collected once only on every original sale, barter, exchange, or similar transaction intended to transfer ownership of, or title to, the articles hereinbelow enumerated a tax equivalent to forty per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged or transferred, such tax to be paid by the manufacturer or producer: Provided, however, That where the articles hereinbelow enumerated are locally manufactured articles as hereinafter defined, the tax shall be seven per centum: Provided, further, That where the articles enumerated hereinbelow are manufactured from materials subject to tax under this section the total cost of such materials shall be deducted from the gross selling price or gross value in money of such manufactured articles: "(a) Phonographs; "(b) Combination radio and phonograph sets of all types; "(c) Television sets; "(d) Combination radio and television sets; "(e) Combination radio-phonograph-television sets; "(f) Gramophones, and "(g) Similar articles for reproducing and/or recording music and sound, like tape recorders, etc. "The words 'locally manufactured articles' mean articles manufactured in a manufacturing enterprise which processes physically and/or chemically raw materials such as copper clad boards, silicon, steel laminations, other metal sheets, wires plastic powder and/or pallets, fiber boards, wood, metallic and non-metallic tubes, rods, special paper, etc., into the various intermediate components and parts, and subsequently assembling of fitting them together with other imported collaterals or intermediate components and parts into such completed and finished articles: Provided, however, That if the following parts are intermediate components of a finished article, except as used in the tuner assembly, they must be locally manufactured within the manufacturing enterprise or any other local manufacturing enterprise: "1. Printed circuit roads; "2. Transformers; "3. Coils, except yoke and flyback, and sheet metalware attached hereto except the mask; "4. Cabinets; and "5. Chassis." SEC. 34. Section one hundred and eighty-six of the same Act is hereby amended to read as follows: "SEC. 186. Percentage tax on sales of other articles . There shall be levied, assessed and collected once only on every original sale, barter, exchange, and similar transaction either for nominal or valuable considerations, intended to transfer ownership of, or title to, the articles not enumerated in sections one hundred and eighty-four, one hundred and eighty-five, one hundred and eighty-five-A, and one hundred eighty-five-B, a tax equivalent to seven per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged, or transferred, such tax to be paid by the manufacturer, or producer: Provided, That where the articles subject to tax under this section are manufactured out of materials likewise subject to tax under this section and section one hundred and eighty-nine, the total cost of such materials as duly established, shall be deductible from the gross selling price or gross value in money of such manufactured articles." SEC. 35. Section one hundred and eighty-nine of the same Act is hereby amended to read as follows: "SEC. 189. Percentage tax upon processors of pineapple , proprietors or operators of rope factories , sugar centrals , coconut oil mills , cassava mills and desiccated coconut factories . Processors of pineapple, proprietors or operators of rope factories, sugar centrals, coconut oil mills, cassava mills and desiccated coconut factories shall pay a tax equivalent to two per centum of the gross value in money of all the pineapple, rope, sugar, coconut oil, cassava flour or starch, and desiccated coconut manufactured, processed or milled by them, including the by-products of the raw materials from which said articles are produced, processed, or manufactured, such tax to be based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse: Provided, however, That this tax shall not apply to pineapple, ropes, coconut oil, and the by-product of copra from which it is produced or manufactured, and desiccated coconuts, if such pineapple, ropes, oil, copra by-products and desiccated coconuts shall be removed for exportation and are actually exported without returning to the Philippines, whether so exported in their original state, or as an ingredient or part of any manufactured article or product. "In case the raw materials are processed, manufactured or milled in pursuance of a contract where the factory, central, or mill receives a share of the finished products, the tax on the share pertaining to the planter or owner of the raw materials shall be charged to the planter or owner and withheld by the proprietor or operator of the factory, central or mill and paid by him to the Commissioner of Internal Revenue. "A proprietor or operator of a refined sugar factory shall be subject to the tax imposed by this Section but shall be permitted to deduct from the actual selling price or market value of the refined sugar the total cost, as duly established, of the raw sugar upon which the tax under this section has previously been paid. "Where articles are manufactured out of materials subject to tax under this section, the total cost, as duly established, of the said materials shall be deductible from the gross selling price or gross value in money of the manufactured articles." SEC. 36. Section one hundred and ninety-one of the same Act is hereby amended to read as follows: "SEC. 191. Contractors , proprietors or operators of dockyards , and others . A contractor's tax of three per cent of gross receipts is hereby imposed on the following: "(1) General engineering, general building, and specialty contractors as defined in Republic Act Numbered Four Thousand five hundred sixty-six; "(2) Filling, demolition and salvage work contractors; and proprietors or operators of mine drilling apparatus; "(3) Proprietors or operators of dockyard; "(4) Persons engaged in the installation of water system, and gas or electric light, heat, or power; "(5) Persons selling water, light, heat, or power, except those paying a franchise tax and electric plants owned by municipalities and municipal districts; "(6) Proprietors or operators of smelting plants, engraving plants, plating establishments, and plastic lamination establishments; "(7) Proprietors or operators of establishments for upholstering, washing or greasing of motor vehicles, vulcanizing, recapping and battery charging; "(8) Proprietors or operators of establishments for planing or surfacing and recutting of lumber, and sawmills under contract to saw or cut logs belonging to others; "(9) Proprietors or operators of dry-cleaning or dyeing establishments, steam laundries, and laundries using washing machines; "(10) Proprietors or owners of shops for the repair of any kind of bicycles or vehicles, mechanical and electrical devices, instruments, apparatus, or furniture and shoe repairing by machine or any mechanical contrivance; "(11) Proprietors or operators of establishments or lots for parking purposes; "(12) Proprietors or operators of telephone or telegraph lines or exchanges, broadcasting or wireless station, except those paying a franchise tax; "(13) Proprietors or operators of tailorshops, dress shops, milliners and hatters, beauty parlors, barbershops, massage clinics, photographic studios, and funeral parlors; "(14) Proprietors or operators of hotels, motels, and lodging houses; "(15) Proprietors or operators of arrastre and stevedoring, warehousing, or forwarding establishments; "(16) Registered master plumbers, smiths, and house or sign painters; "(17) Printers, bookbinders, lithographers and publishers except those engaged in the publication or printing and publication of any newspaper, magazine, review or bulletin which appears at regular intervals, with fixed prices for subscription and sale and which is not devoted principally to the publication of advertisements; "(18) Business agents and other independent contractors except persons, associations and corporations under contract for embroidery and apparel for export, as well as their agents and contractors and except gross receipts of or from a pioneer industry registered with the Board of Investments under the provisions of Republic Act Numbered Five thousand one hundred and eighty-six." SEC. 37. A new section is hereby inserted between sections one hundred and ninety-one and one hundred ninety-two, to be known as Section one hundred and ninety-one-A which shall read as follows: "SEC. 191-A. Caterers . A caterer's tax is hereby imposed as follows: "(1) On proprietors or operators of restaurants, refreshment parlors and other eating places, including clubs, and caterers, three per cent of their gross receipts; "(2) On proprietors or operators of restaurants, bars, cafes and other eating places, including clubs, where distilled spirits, fermented liquors, or wines are served, three per cent of their gross receipts from sale of food or refreshments and seven per cent of their gross receipts from sale of distilled spirits, fermented liquors or wines. Two sets of commercial invoices or receipts serially numbered in duplicates shall be separately prepared and issued, one for each sale of food or refreshment served and another for each sale of distilled spirits, fermented liquors or wines served, the originals of the invoices or receipts to be issued to the purchaser or customer. "(3) On proprietors or operators of restaurants, refreshment parlors, bars, cafes and other eating places which are maintained within the premises or compound of a cockpit, race track, jai-alai, cabaret, night or day club or which are accessible to patrons of such cockpit, race track, jai-alai, cabaret, night or day club by means of a connecting door or passage, twenty per cent of their gross receipts. "Where the establishments enumerated above are operated or maintained by clubs of any kind or nature (irrespective of the disposition of their net income and whether or not they cater exclusively to members or their guests) the keepers of the establishments shall pay the corresponding tax at the rates fixed above." SEC. 38. Section one hundred and ninety-two of the same Act is hereby amended to read as follows: "Sec. 192. Percentage tax on carriers and keepers of garages . Keepers of garages, cars for rent or hire driven by the lessee, transportation contractors, persons who transport passengers or freight for hire, and common carriers by land, air, or water, except owners of bancas, and owners of animal-drawn two-wheeled vehicles, shall pay a tax equivalent to two per centum of their monthly gross receipts. "In computing the percentage tax provided in this section, the following shall be considered the minimum monthly gross receipts in each particular case: Jeepney for hire 1. Manila and other cities 400 2. Provincial 200 Public utility bus Not exceeding 30 passengers P600.00 Exceeding 30 but not exceeding 50 passengers 1,000.00 Exceeding 50 passengers 1,200.00 Taxis 1. Manila and other cities 600 2. Provincial 400 Car for hire (with chauffeur) 500.00 Car for hire (without chauffeur) 300.00" SEC. 39. Section one hundred and ninety-four (g) of the same Act is hereby amended to read as follows: "SEC. 194 (g). "Wholesale dealer of distilled spirits and wines' comprehends every person who for himself or on commission sells or offers for sale wines or distilled spirits in larger quantities than five liters at any one time, or who sells or offers the same for sale for the purpose of resale, irrespective of quantity." SEC. 40. A new section is hereby inserted between Section one hundred and ninety-five and one hundred and ninety-six to be known as Section one hundred and ninety-five-A, which shall read as follows: "SEC. 195-A. Percentage tax on dealers in securities ; lending investors . Dealers in securities and lending investors shall pay a tax equivalent to three per centum on their gross income". SEC. 41. Section two hundred and eight of the same Act is hereby amended to read as follows: "SEC. 208. Unlawful pursuit of business or occupation . Any person who distills, rectifies, repacks, compounds, or manufactures any article subject to a specific tax, without having paid the privilege tax therefor, or who aids or abets in the conduct of illicit distilling, rectifying, repacking, compounding or illicit manufacture of any article subject to a specific tax shall, in addition to being liable for the payment of the tax, be fined not less than two thousand pesos nor more than ten thousand pesos and imprisoned for not less than six months nor more than six years, and all articles distilled, rectified, repacked, compounded or manufactured, and all personal property found at the distilling, repacking, rectifying, compounding or manufacturing establishment or in any building, room, yard, or inclosure connected therewith and used with or constituting a part of the premises on which distilling, repacking, rectifying, compounding, or manufacturing of those articles is carried on, and the right, title, and interest of the person in the lot or tract of land in which the distilling, repacking, rectifying, compounding, or manufacturing establishment is situated, and the right, title and interest therein of every person who knowingly or with negligence has suffered or permitted the business of a distiller, repacker, rectifier, compounder, or manufacturer of any article subject to a specific tax to be there carried on or has connived at the business, shall be forfeited. Provided, further, That in the case of a corporation, partnership or association, the official and/or employee who caused the violation shall be responsible: Provided, finally, That if the violation is committed by a public official or employee, he shall be dismissed and permanently disqualified from holding any public office. "In case of repetition of offense, the offender shall be fined not less than five thousand pesos nor more than fifteen thousand pesos and imprisoned for not less than two years nor more than twelve years. "Any person who carries on any other business, or pursues any occupation for which a privilege tax is imposed without paying the tax as required by law or who aids or abets in the conduct of the business or occupation shall, in addition to being liable to the payment of the tax, be fined not exceeding one thousand pesos or imprisoned for a term of not exceeding six months, or both. "Any individual who has not paid his annual privilege tax for the current year shall be fined not less than two hundred pesos and not more than five hundred pesos. "Any person subject to the occupation tax who fails without justifiable cause to indicate his privilege tax receipt number in deeds, receipts, prescriptions, reports, books of accounts, plans and designs, surveys and maps, or the like, shall be fined not exceeding five hundred pesos." Features of the Amendments I. Amendment to Section 180 . Late payment of the privilege tax is now penalized by the addition thereto of 25% surcharge, the increment to form part of the tax. II. Amendments to Section 182 . A. Fixed taxes on business : (1) Persons subject to percentage taxes . The rate is increased from P20.00 to P50.00 per annum. (2) Persons not subject to percentage tax . The rates of tax, except the first bracket, were increased as follows: Sales Bracket Before RA 6110 After RA 6110 P2,000 and below Exempt Exempt 2,001 P10,000 P10.00 P10.00 10,001 30,000 20.00 40.00 30,001 50,000 30.00 80.00 50,001 75,000 50.00 130.00 75,001 100,000 75.00 175.00 100,001 150,000 100.00 250.00 150,001 300,000 150.00 450.00 300,001 500,000 300.00 800.00 500,001 up 500.00 (see next bracket) 500,001 1,000,000 500.00 1,500.00 1,000,001 up 500.00 2,000.00 The last paragraph of this subsection (2) of subsection (A) of Section 182 which provides for the payment of the tax within the regulation period in the month of January had been deleted. On account of this deletion, the tax in this subsection commonly known as the graduated fixed annual tax (C-13) may now be paid annually or semi-annually as provided for by Section 180. (3) Other fixed taxes . The rates of tax were generally increased and new businesses embraced. The old and new rates are comparatively indicated below. New businesses are marked with an asterisk. Business Before RA 6110 After RA 6110 (a) Brewers P1,000.00 P5,000.00 (b) Distillers of spirits Production: (1) Before RA 6110 (a) Not exceeding 50,000 g.l. 100.00 (b) 50,001 100,000 g.l. 200.00 (c) 100,001 250,000 g.l. 400.00 (d) 250,001 up 600.00 (2) After RA 6110 (a) Not exceeding 10,000 g.l 100.00 (b) 10,001 100,000 g.l. 1,000.00 (c) 100,001 200,000 g.l. 2,000.00 (d) 200,001 300,000 g.l. 3,000.00 (e) 300,001 500,000 g.l. 4,000.00 (f) 500,001 up 5,000.00 (c) Rectifiers of distilled spirits compounders, and repackers of wines or distilled spirits 450.00 1,000.00 (d) Wholesale dealers of distilled spirits and wines 1. In the City of Manila 600.00 1,000.00 2. In chartered cities other than Manila 400.00 600.00 3. In any other place 150.00 200.00 (e) Wholesale dealers in fermented liquors, except basi, tuba and tapuy 150.00 200.00 (f) Wholesale peddlers of distilled spirits and wines * 100.00 200.00 (g) Wholesale peddlers of fermented liquors 100.00 200.00 (h) Retail liquor dealers 100.00 (i) Retail vino dealers 20.00 (j) Retail dealers in fermented liquors P50.00 P50.00 (k) Retail peddlers of distilled spirits, wine * and fermented liquors 150.00 50.00 (l) Wholesale leaf tobacco dealers 100.00 (m) Wholesale dealers of cigars, cigarettes and other manufactured tobacco products 60.00 100.00 (n) Wholesale peddlers of manufactured tobacco products 50.00 100.00 (o) Retail leaf tobacco dealers 30.00 (p) Retail dealers of cigars, cigarettes and other manufactured tobacco products 16.00 20.00 (q) Retail peddlers of cigars, cigarettes and other manufactured tobacco products 16.00 20.00 (r) Manufacturers, importers * or exporters * of cigars, cigarettes and other manufactured tobacco products 1. In the cities of Manila 400.00 1,000.00 Pasay, Quezon, and (Manila) Caloocan and in the Province of Rizal 100.00 1,000.00 2. In any other place 100.00 500.00 (s) Importers or exporters of leaf tobacco, scrap tobacco and partially manufactured tobacco products * 1,000.00 (t) Manufacturers or importers of cigarette paper in bobbins or rolls, cigarette tipping, paper or cigarette filter tips * 1,000.00 (u) Manufacturers or importers of playing cards, saccharine or sodium saccharinate or any of its other derivatives and salts and other artificial sweetening agents, lighter fluids in liquid or gaseous form matches, firecrackers, denatured alcohol for motive power * 500.00 (v) Manufacturers, importers or exporters of petroleum or other manufactured oils and fuels from petroleum * 2,000.00 (w) Manufacturers, producers or importers of soft drinks or other mineral waters P100.00 P400.00 (x) Wholesale dealers of soft drinks, or other mineral waters * 50.00 (y) Wholesale peddlers of soft drinks, or other mineral waters * 50.00 (z) Dealers in securities 150.00 150.00 (aa) Real estate dealers: Income bracket P4,001.00 P10,000 150.00 150.00 10,001 30,000 300.00 300.00 30,001 50,000 500.00 500.00 50,001 up 500.00 1,000.00 (bb) Stockbrokers, real estate brokers, commercial brokers, customs brokers and immigration brokers 150.00 300.00 (cc) Owners of race tracks for each day on which races are run on any track 500.00 1,000.00 (dd) Lending investors (1) In chartered cities and first class municipalities 300.00 500.00 (2) In second and third class municipalities 150.00 250.00 (3) In fourth and fifth class municipalities and municipal districts 75.00 125.00 (4) Those who do business in more than one province 300.00 500.00 (ee) Cinematographic film owners, lessors or distributors 200.00 300.00 (ff) Pawnshop * 500.00 (gg) Banks, insurance companies, finance and investment companies doing business in the Philippines and franchise grantees * 500.00 (hh) Operators, proprietors or lessees of theaters and cinema houses: * (1) First run 500.00 (2) Second run 200.00 (ii) Operators, proprietors, or lessees of boxing arenas, swimming pools, resorts, skating rinks, golf links and other places of amusement * P100.00 (jj) Night clubs and day clubs * 1,000.00 (kk) Cockpits and cabarets * 500.00 (ll) Jai-alai for each day on which games are played * 250.00 (mm) Operators or owners of rice or corn mills same same * New Businesses The provision imposing the privilege tax of P75.00 on business agents has been repealed. However, having been placed under the category of "contractors" (see Section 191 (18), as amended), business agents are now subject to a fixed tax of P50.00, pursuant to Section 182(A)(1). B. On occupation : There are no changes in rates of tax and covered occupations. The amendments consist of the following: (1) The 2nd proviso in the last paragraph of this subsection, providing for the refund of any amount collected in excess of the rates in effect prior to January, 1957, was deleted, said proviso having outlived its purpose. (2) The exemption of a professional who pays the privilege tax under this section from the payment of other tax or fees for the practice of his profession is now limited to national tax, license fees or fees and therefore, he is no longer exempt from the payment of privilege tax or license fee which local governments may impose. (3) Professionals are now required to indicate by writing or printing the number of their privilege tax receipts on certain papers, such as deeds, receipts, prescription reports, books of accounts, plans and designs and maps in the preparation or accomplishment of which they have participated in their professional capacity. (4) It is now the duty of employers to require payment of the occupation tax before employing any professional and to require the latter to pay such tax annually thereafter. (5) The exemption previously granted to a professional who is employed and performing duties in such professional capacity, but without practising his profession outside of his employment, has been repealed. Accordingly, a professional who is employed by a private person or firm and performing duties in such professional capacity is subject to the occupation tax. C. Exceptions : (1) The exemption in favor of Filipino public market vendors is now limited to those whose stock in trade on any one day does not exceed a retail value of P100.00. (2) The valuation basis of the day's production of each member of a home industry working as one family is increased from five pesos to six pesos. (3) The exemption from the professional tax of persons employed in the government service or in religious, educational, or charitable association, or hospital, sanitarium or to any similar establishment not conducted for private gain has also been repealed. (4) Electric plants owned by municipalities and municipal districts are now exempt from the fixed tax on business. III. Amendments to Section 183 . Subsection (a) This subsection was amended by the insertion of a new paragraph between the first and second paragraphs thereof providing for the reckoning date of sales on consignment. The amendment provides that the reckoning date is the actual date of sale by the consignee or sixty days' after the date of consignment whichever is earlier. Thus, if consigned articles are not sold within 60 days from the date consigned, the articles are considered sold by the consignor after the lapse of the 60-day period and should be declared by him for sales tax purposes. The amendment, however, allows adjustment for consigned goods actually returned to the consignor. For example, if consigned goods had been considered sold and declared for sales tax purposes on account of the lapse of the 60-day period and were thereafter returned by the consignee to the consignor on account of failure of the former to sell the goods, the consignor may deduct from his monthly gross sales the value of the returned articles for the month when return thereof is made. Subsection (b) There are two amendments to this subsection, namely: (1) The certification by the Philippine Consul at the port of origin as to the correctness of the import invoice value of the imported articles is made under penalties of perjury; and (2) Articles taxable under Section 185-A and Section 185-B are now among the articles whose tax base, for advance sales tax purposes, shall be increased by the addition of 50% mark-up. IV. Amendments to Section 184 . The amendments to this Section are the following: (1) The rate of tax is increased from 50% to 70%. (2) The rates of tax on automobiles are increased, viz.: Selling Price Rate of tax Not exceeding P10,000 100% P10,001 15,000 125% P15,001 20,000 150% P20,001 up 200% (3) Locally manufactured automobile parts and accessories are now expressly made subject to only 7% sales tax. (4) For purposes of deduction, locally manufactured parts shall be considered as if they had been subjected to twenty-five percent mark-up. (5) Added to subsection (a) of this Section is a provision stating that "the provisions of general and special laws to the contrary notwithstanding, there shall be no exemption from the tax in this subsection". V. Amendments to Section 185 . (1) The rate of tax is increased from 30% to 40%. (2) Locally manufactured phonograph records are no longer within the purview of subsection (g) of this Section. They are now, therefore, subject to only 7% sales tax imposed by Section 186. (3) Locally manufactured electric fans, air circulators, electric, gas or oil water heaters; electric flat irons, electric, gas or oil appliances of the type used for cooking, warming, or keeping warm food or beverage for consumption on the premises have likewise been removed from the purview of subsection (i) of this Section and therefore, are also subject to only 7% sales tax. (4) Subsection (j) is repealed. All of the articles previously taxed under this subsection are now, therefore, also subject to only 7% sales tax. (5) Subsection (o) has brought about a totally different tax treatment of the articles therein enumerated. The difference between the old and new provisions is hereunder explained: A. Before the amendment, all upholstered furniture (except rattan) whether locally manufactured or imported were subject to 30% (now 40%) tax. This rate was imposed even if the upholstery was not the component material of chief value. However, under the new law, as amended, upholstered furniture are not subject to the higher rate of tax when wood, rattan, or bamboo constitute the component material of chief value thereof. B. The amendment exempts from the higher rate of tax locally manufactured furniture regardless of class thereof and of the materials of which made. cdt (6) Subsection (p) has been amended by inserting the words "and/or" between the terms "synthetic" and "chemical" in order to make it clear than a synthetic fabric need not be a chemical fabric, although the latter is necessarily synthetic. In other words, the term "synthetic fabric" should be understood as broad enough as to include fabrics other than chemical fabrics. Another amendment to this subsection is the exemption of locally manufactured textiles from the 40% tax, regardless of the material of which such textiles are made. In other words locally manufactured textiles are taxable under Section 186. V. Amendment to Section 185-A . The amendment to this Section consists purely of the increase of the rate of tax from 30% to 40%. VI. Amendment to Section 185-B . The amendment to this Section also consists purely of the increase of the rate of tax from 30% to 40%. VII. Amendments to Section 186 . The first paragraph of this Section was amended to exclude therefrom articles subject to tax under Section 185-A and 185-B. This is purely remedial, the latter being newly created and providing for a different rate of tax. The second paragraph of this Section has been deleted. This paragraph provided for a special tax treatment of operators or proprietors of sawmills whose sales tax liability is computed on 33 1/3% of the gross cost of logs purchased during any given month intended for manufacture into lumber. By virtue of the deletion, the sales tax payable by this class of taxpayers shall now be computed as provided for in the first and only remaining paragraph of the section. IX. Amendments to Section 189 . Processors of pineapple are now taxable under Section 189. However, processed pineapple exported by them are exempt from the 2% tax prescribed in this Section. For purposes of this amendment, processors of pineapple include those who apply certain processes on the pineapple, as peeling and slicing and/or cutting said product into chunks and/or any other process and preparing the same for the market either by canning and/or any other manner of preservation, whether or not they are the producers of the pineapple thus processed. X. Amendments to Section 191 . The second paragraph of this Section was deleted therefrom and transposed to a new section denominated Section 191-A which includes new provisions (see Item XI). The first paragraph has been reconstructed and the coverage thereof expanded as to include other specific classes of contractors, viz: (1) General engineering contractors as defined by Republic Act No. 4566; In conjunction with this amendment, road, irrigation, artesian well and other construction work contractors have been deleted from the specific enumeration of contractors, being comprised within the term "general engineering contractors." (2) General building contractors as defined by Republic Act No. 4566; (Since the term is broad enough as to include building contractors, the latter are no longer in the enumeration) (3) Specialty contractors as defined by Republic Act No. 4566; (4) Proprietors or operators of establishments for upholstering; (5) Proprietors or owners of shops for the repair of electrical devices; (6) Proprietors or operators of establishments or lots for parking purposes; (7) Barbershops; (8) Massage clinics; (9) Forwarding establishments; (10) Registered master plumbers; Before the amendment, plumbers in general were expressly enumerated. However, a registered master plumber has a distinct meaning. A plumber who is not a holder of the corresponding certificate, and consequently is not registered as a master plumber, cannot be considered under this classification. However, he can be subjected to tax as an independent contractor; and (11) Dress-shops Before the amendment, this section speaks of dressmakers. As "dressmaker" has a distinct and separate meaning from "dress-shop", this may be considered a new classification. A dressmaker may still be considered an independent contractor which determination essentially rests on facts. For ready reference, the pertinent provisions of Republic Act No. 4566 are quoted immediately hereunder, viz.: "(c) A "general engineering contractor" is a person whose principal contracting business is in connection with fixed works requiring specialized engineering knowledge and skill, including the following divisions or subjects: irrigation, drainage, water power, water supply, flood control, inland waterways, harbors, docks and wharves, shipyards and ports, dams, hydroelectric projects, levees, river control and reclamation works, railroads, highways, streets and roads, tunnels, airports and airways, waste reduction plants, bridges, overpasses, underpasses and other similar works, pipelines and other system for the transmission of petroleum and other liquid or gaseous substances, land leveling and earth moving projects, excavating, grading, trenching, paving and surfacing work. "(d) A "general building contractor" is a person whose principal contracting business is in connection with any structure built, being built, or to be built, for the support, shelter and enclosure of persons, animals, chattels or movable property of any kind, requiring in its construction the use of more than two unrelated building trades or crafts, or to do or superintend the whole or any part thereof. Such structure includes sewers and sewerage disposal plants and systems, parks, playgrounds and other recreational works, refineries, chemical plants and similar industrial plants requiring specialized engineering knowledge and skill, powerhouses, power plants and other utility plants and installation, mines and metallurgical plants, cement and concrete works in connection with the abovementioned fixed works. "A person who merely furnishes materials or supplies under section eleven without fabricating them into, or consuming them in the performance of the work of the general building contractor does not necessarily fall within this definition. "(e) A "specialty contractor" is a person whose operations pertain to the performance of construction work requiring special skill and whose principal contracting business involves the use of specialized building trades or crafts." Finally, the amendment to Section 191 exempts the following from the tax therein prescribed, viz.: (1) The gross receipts of contractors registered as a pioneer industry with the Board of Investments under the provisions of Republic Act No. 5186 as well as the gross receipts derived by contractors from any pioneer industry registered with the Board of Investments. Specifically, this exemption may be availed of by the following: (a) Contractor as a pioneer industry; and (b) Contractor of a pioneer industry. (2) Electric plants owned by municipalities and municipal districts. (3) Proprietors or operators of telephone or telegraph lines or exchanges, broadcasting or wireless stations who are paying a franchise tax. By virtue of this amendment, this class of contractors are now exempt from the 3% contractor's tax regardless of whether or not their franchises contain an exemption provision provided that their franchises imposes upon them the obligation to pay a franchise tax. XI. Section 191-A This is a new section to which was transposed the entire second paragraph of Section 191 with amendments. The amendments consist of the following: (1) Gross receipts of restaurants, refreshment parlors, other eating places, bars and cafes operated by clubs are now expressly subjected to 3% or 7% tax, as the case may be. Clubs are liable to the tax imposed in this subsection, regardless of whether or not they cater exclusively to their members. (2) Caterers are now expressly made subject to the tax imposable on operators of restaurants, refreshment parlors, other eating places, bars and cafes. This amendment makes clear the liability to tax of those who, without maintaining a fixed business establishment where food is served, provide, for consideration, food and service to others. (3) The exemption of eating establishments inside public market places has been removed. (4) Such establishments maintained in the premises or compound of a day club are expressly subjected to the same rate of tax as that imposed on establishments maintained within the premises or compound of a night club, cockpit, race track, jai-alai, cabaret. (5) The rate of tax payable by restaurants and other eating places, bars and cafes which are maintained in the premises or compound of a day or night clubs, cockpit, cabaret, race track, or jai-alai has been increased from 10% to 20%. XII. Amendments to Section 192 . (1) Owners of cars for rent or hire which are driven by the lessees thereof have been included among those subject to the 2% tax imposed by this Section. Apparently they are specifically mentioned in the law in order to erase all doubt as to their being transportation contractors. (2) A new provision, fixing the minimum monthly gross receipts of each category of vehicle used in business by common carriers and transportation contractors, for purposes of the 2% tax imposed by this Section has been added thereto. The following amounts are deemed the minimum monthly gross receipts of the vehicles hereunder mentioned, regardless of whether or not said amounts are actually earned. A. Auto Calesa 1. Manila and other cities P200.00 2. Provincial P100.00 B. Jeepney for hire 1. Manila and other cities P400.00 2. Provincial P200.00 C. Public Utility bus 1. Not exceeding 30 passengers P600.00 2. Exceeding 30 but not exceeding 50 passengers P1,000.00 3. Exceeding 50 passengers P1,200.00 D. Taxi 1. Manila and other cities P600.00 2. Provincial P400.00 E. Car for hire (with chauffeur) P500.00 F. Car for hire (without chauffeur) P300.00 Proof of any claim by the taxpayer that he earned a lesser amount than the minimum fixed in the law shall not be entertained. On the other hand, the provision fixing the minimum monthly gross receipts of each category of vehicle mentioned therein should not be considered as barring the Bureau of Internal Revenue from determining a greater amount of gross receipts. XIII. Amendment to Section 194(g) . The former classification denominated "wholesale liquor dealer" is now denominated "wholesale dealer of distilled spirits and wines", the definition of which is the same as the former except for the deletion of the parenthetical clause "other than denatured alcohol". By virtue of the amendment wholesale dealers in denatured alcohol are now subject to the fixed tax prescribed by Section 182(A)(3)(d). XIV. Amendments to Section 208 . The amendments to this Section consist of the following: (1) Where a corporation, partnership or association unlawfully engages in business which is subject to specific tax as described in this section, criminal responsibility is expressly pinpointed on the official and/or employee who caused the illegal act. (2) If the unlawful act is committed by a public official or employee, such official or employee shall be dismissed and permanently disqualified from holding any public office. (3) A specific criminal penalty is provided for failure of a person subject to the occupation tax, without justifiable cause, to indicate his privilege tax receipt number in instruments and papers as required by Section 182(B). (4) A provision prescribing a lighter penalty against individuals who fail to pay their privilege taxes for the current year. This penal provision is distinct from the penal provision in the next preceding paragraph imposing a heavier penalty on those who carry on any business or pursue any occupation without paying the privilege tax. In other words a heavier penalty is imposed on those who have not paid any privilege tax at all. However, where the taxpayer had been paying privilege tax but failed to pay the privilege tax for the current year, the penalty is lighter. EFFECTIVITY Pursuant to Section 80 of the Act, the amendments to the sections of Title V of the Tax Code as indicated herein took effect on September 1, 1969. Since the law took effect within the taxable year, persons engaged in business on which a privilege tax is imposed shall pay the difference between the increased rates and old rates; since the privilege taxes, are payable semi-annually and since the tax is reckoned from the commencement of the semester, the tax differential shall be equivalent to one-half of the new rate less one-half of the old rate. ENFORCEMENT All internal revenue officers and others concerned are enjoined to be guided accordingly and to give this circular as wide a publicity as possible. MISAEL P. VERA Commissioner of Internal Revenue APPROVED: CESAR VIRATA Acting Secretary of Finance