Presidential Decree No. 1254 dated November 28, 1977, Amending the National Internal Revenue Code by Adding Section 220-A Providing Specific Penalties for Failure or Refusal to Issue Receipts or Sales or Commercial Invoices, for Violations Related to the Printing of such Receipts or Invoices and for Other Violations in Connection Therewith

December 10, 1977 REVENUE MEMORANDUM CIRCULAR NO. 50-77 SUBJECT : Presidential Decree No. 1254 dated November 28, 1977, Amending the National Internal Revenue Code by Adding Section 220-A Providing Specific Penalties for Failure or Refusal to Issue Receipts or Sales or Commercial Invoices, for Violations Related to the Printing of such Receipts or Invoices and for Other Violations in Connection Therewith TO : All Internal Revenue Officers and others concerned For the information and guidance of all concerned, quoted hereunder are the pertinent provisions of Presidential Decree No. 1254. "SECTION 1. The National Internal Revenue Code as amended is hereby further amended, by adding a new section to be known as Section 220-A to read as follows: 'SECTION 220-A. FAILURE OR REFUSAL TO ISSUE RECEIPTS OR SALES OR COMMERCIAL INVOICES; VIOLATIONS RELATED TO THE PRINTING OF SUCH RECEIPTS OR INVOICES AND OTHER VIOLATIONS . ANY PERSON WHO, BEING REQUIRED UNDER SECTION 216 TO ISSUE RECEIPTS OR SALES OR COMMERCIAL INVOICES, FAILS OR REFUSES TO ISSUE SUCH RECEIPTS OR INVOICES, ISSUES RECEIPTS OR INVOICES THAT DO NOT TRULY REFLECT AND/OR CONTAIN ALL THE INFORMATION REQUIRED TO BE SHOWN THEREIN, POSSESSES OR USES UNREGISTERED RECEIPTS OR INVOICES, POSSESSES OR USES MULTIPLE OR DOUBLE RECEIPTS OR INVOICES SHALL BE PENALIZED AS FOLLOWS: a. FOR THE FIRST OFFENSE A FINE OF NOT MORE THAN TWO HUNDRED PESOS AND IMPRISONMENT OF NOT MORE THAN SIX MONTHS; b. FOR THE SECOND OFFENSE A FINE OF NOT LESS THAN TWO HUNDRED PESOS BUT NOT MORE THAN THREE THOUSAND PESOS AND IMPRISONMENT OF NOT LESS THAN SIX MONTHS BUT NOT MORE THAN THREE YEARS; c. FOR SUBSEQUENT OFFENSES A FINE OF NOT LESS THAN THREE THOUSAND PESOS BUT NOT MORE THAN SIX THOUSAND PESOS AND IMPRISONMENT OF NOT LESS THAN THREE YEARS BUT NOT MORE THAN SIX YEARS, AND CANCELLATION OF LICENSE TO DO BUSINESS. THE CRIMINAL LIABILITY ARISING FROM SECOND AND SUBSEQUENT OFFENSES CANNOT BE COMPROMISED. ANY PERSON WHO COMMITS ANY OF THE ACTS ENUMERATED HEREUNDER SHALL BE PENALIZED IN THE SAME MANNER AND TO THE SAME EXTENT AS PROVIDED FOR IN THIS SECTION: 1. PRINTS, CAUSES, AIDS OR ABETS THE PRINTING OF RECEIPTS OR SALES OR COMMERCIAL INVOICES WITHOUT AUTHORITY FROM THE BUREAU OF INTERNAL REVENUE; 2. PRINTS, CAUSES, AIDS OR ABETS THE PRINTING OF DOUBLE OR MULTIPLE SETS OF INVOICES OR RECEIPTS; 3. PRINTS, CAUSES, AIDS OR ABETS THE PRINTING OF UNNUMBERED RECEIPTS OR SALES OR COMMERCIAL INVOICES OR NOT BEARING THE NAME, BUSINESS STYLE, TAXPAYER ACCOUNT NUMBER, AND BUSINESS ADDRESS OF THE PERSON OR ENTITY TO USE THE SAME; 4. FAILS TO SUBMIT THE QUARTERLY REPORT REQUIRED IN SECTION 216-A. IF THE OFFENDER IS NOT A CITIZEN OF THE PHILIPPINES, HE SHALL BE DEPORTED IMMEDIATELY AFTER SERVING THE SENTENCE WITHOUT FURTHER PROCEEDINGS FOR DEPORTATION. IF HE IS A PUBLIC OFFICER OR EMPLOYEE, HE SHALL, IN ADDITION TO THE PENALTIES PRESCRIBED HEREIN, BE DISMISSED FROM THE PUBLIC SERVICE AND PERPETUALLY DISQUALIFIED FROM HOLDING ANY PUBLIC OFFICE. IN THE CASE OF ASSOCIATIONS, PARTNERSHIPS, OR CORPORATIONS, THE PENALTY SHALL BE IMPOSED UPON ITS PARTNERS, PRESIDENT, GENERAL MANAGER, BRANCH MANAGER AND/OR OFFICER-IN-CHARGE AS WELL AS THE EMPLOYEE RESPONSIBLE FOR THE VIOLATION. IN ANY CASE, THE EMPLOYER SHALL BE LIABLE FOR THE ACT OR OMISSION OF THE EMPLOYEE. A PROFESSIONAL FOUND GUILTY OF ANY OF THE VIOLATIONS PENALIZED UNDER THE PROVISIONS OF THIS SECTION, SHALL, ASIDE FROM BEING METED THE PENALTIES HEREIN IMPOSED, BE REPORTED TO THE PROFESSIONAL REGULATION COMMISSION OR THE PROPER REGULATORY BODY FOR DISCIPLINARY ACTION, WHICH MAY INCLUDE SUSPENSION OR ABSOLUTE REVOCATION OF HIS LICENSE TO PRACTICE HIS PROFESSION.' "SECTION 2. All existing laws, rules and regulations which are inconsistent herewith are hereby repealed or amended accordingly. "SECTION 3. This Decree shall take effect immediately." FEATURES OF THE DECREE 1. The new Decree penalizes (a) failure or refusal to issue receipts or invoices; (b) mere possession of unregistered receipts or invoices; (c) mere possession of multiple or double sets of receipts or invoices; and (d) issuance of receipts or invoices that do not truly reflect and/or contain all the information required to be shown therein. 2. Considering that the responsibility for securing the authority to print receipts or invoices has been shifted from the taxpayer to the printer under Presidential Decree No. 1255, certain acts or omissions related to the printing of such receipts or invoices are now penalized. The penalty for the failure of printers to file quarterly reports is provided for in the Decree. Any person who causes, aids or abets the commission of offenses related to the printing of receipts or invoices is likewise penalized under the Decree. 3. Prior to the Decree, the penalty for the non-issuance of receipts or invoices, use of unregistered receipts or invoices, use of multiple or double sets of receipts or invoices, and other similar violations was prescribed in the general provisions of Section 337 of the Tax Code of 1977, which imposed a fine of not more than P300.00 pesos or imprisonment of not more than six months or both. The new Decree provides for specific penalties graduated according to whether the offense is a first offense , a second offense , or a subsequent offense . It is further emphasized that under this Decree, the conjunctive "AND" clearly indicates stiffer penalties because aside from the fine , corresponding imprisonment is likewise provided for. The same scale of penalties is also applicable to the punishable acts or omissions related to the printing of receipts or invoices. 4. Under the Decree, employers are made liable for the acts or omissions of their employees. The statute is therefore clear in its intent to penalize acts or omissions which are mala prohibita so that employers may be held responsible for the acts/omissions of their employees and may be convicted even without proof of guilty knowledge or consent. 5. Criminal as well as administrative penalties are imposed on violators who are professionals and public officers. 6. Under Section 295 of the Tax Code of 1977, the Commissioner of Internal Revenue has the power to compromise any criminal case other than one involving the commission of fraud by the taxpayer before that case is filed in court. However, with respect to the criminal liabilities under this Decree, such power to compromise is limited to cases involving violations, not constituting second or subsequent offenses, prior to conviction. EFFECTIVITY The provisions of Presidential Decree No. 1254 took effect on November 28, 1977. ENFORCEMENT All internal revenue officers concerned are hereby enjoined 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