Procedure to be Followed in the Purchase, Issuance and Affixture of Cigarette Strip Stamps Under the New Tax Rates Prescribed Under Presidential Decree No. 149, Amending Section 137(b), National Internal Revenue Code, as Earlier Amended by Presidential Decrees Nos. 69 and 88

June 14, 1973 REVENUE MEMORANDUM ORDER NO. 22-73 SUBJECT : Procedure to be Followed in the Purchase, Issuance and Affixture of Cigarette Strip Stamps Under the New Tax Rates Prescribed Under Presidential Decree No. 1 4 9, Amending Section 137(b), National Inte rna l Revenue Code, as Earlier Amended by Presidential Decrees Nos. 69 and 88 TO : The Chiefs, Tobacco Tax Division and Accountable Forms Division, all internal revenue officers and others concerned. To supplement the procedure prescribed under Revenue Memorandum Order No. 7-73, dated February 12, 1973, regarding the preparation of TPAO's covering purchases of cigarette strip stamps under the new rates of specific tax on cigarettes effective July 1, 1973, pursuant to Presidential Decree No. 149, the following additional procedure is hereby issued a smooth implementation of the amended provisions of Section 137(b) of the National Internal Revenue Code, as amended, and pending the arrival of new issues of strip stamps being printed abroad: 1. Upon presentation of a duly approved stamp requisition (BIR Form 31.30) and the official receipts evidencing full payment of strip stamps under the new rates of specific tax made in accordance with the procedure prescribed under Revenue Memorandum Order No. 7-73, the Accountable Forms Division shall issue from its existing stocks of strip stamps under the old tax rates corresponding to the strip stamps being purchased under the new rates effective July 1, 1973, as follows: Existing Stocks of Strip Stamps Under Strip Stamps Under the the new Rates Old Rates To be Issued Being Purchased Class Denomination Class Denomination P3.75/M (30's) P0.1125 P3.00/M (30's) P0.09 8.00/M (20's) 0.16 8.00/M (20's) 0.16 3.00/M (20's) 0.06 14.00/M (20's) 0.28 12.00/M (20's) 0.24 16.00/M (20's) 0.32 (New stamps local print) 18.00/M (20's) 0.36 24.00/M 20's) 0.48 25.00/M (20's) 0.50 2. For the guidance of the Tobacco Tax Division in the preparation of TPAO's covering the payment of the tax differential between the new and old rates of tax in accordance with Revenue Memorandum Order No. 7-73, hereunder is a table showing the difference in values between that indicated on the old stamps and the corresponding values of stamps under the new tax rates: Stamps Under Old Stamps the New Rates Differential Value Class Denomination Class Denomination Per Stamp P3.75/M (30's) @ P0.1125 P3.00/M (30's) @ P0.09 P0.0225 3.00/M (20's) @ 0.06 14.00/M (20's) @ 0.28 0.22 12.00/M (20's) @ 0.24 16.00/M (20's) @ 0.32 0.08 24.00/M (20's) @ 0.48 25.00 (20's) @ 0.50 0.02 3. Strip stamps on hand at cigarette factories as of midnight, June 30, 1973 as duly ascertained during a physical count thereof shall be handled in the following manner: a.) Loose or unaffixed strip stamps for affixture to cigarettes subject to new and higher tax rates . Loose or unaffixed strip stamps under the old rates on hand at cigarette factories as of midnight, June 30, 1973, for affixture to cigarettes under the new and higher rates of tax effective July 1, 1973, shall be subject to the payment of the differential tax in accordance with the table of values under Item 2, above. However, said strip stamps under the old class denominations shall not be allowed to be affixed to packs of cigarettes under the new and higher tax rates unless the differential tax due thereon has been duly paid by the cigarette manufacturer concerned. Payment of said differential tax arising from the increased tax rates effective July 1, 1973, shall be made through a TPAO prepared therefor by the Tobacco Tax Division. b.) Strip stamps affixed to packed cigarettes subject to new and higher tax rates . Strip stamps affixed on packed cigarettes on hand at cigarette factories as of midnight, June 30, 1973, and subject to new and higher tax rates effective July 1, 1973, shall not be allowed to be removed from the factory premises unless the differential tax due thereon has been duly paid, covered by TPAO prepared therefor by the Tobacco Tax Division. c.) Loose or unaffixed strip stamps corresponding to cigarettes under the old tax rates by will be subject to new and lower tax rates under Presidential Decree No. 149 . Loose or unaffixed strip stamps corresponding to cigarettes under the old tax rates but will be subject to new and lower tax rates effective July 1, 1973, may be returned to the Accountable Forms Division, after necessary verification by the BIR Laboratory Center, for replacement with strip stamps needed by the cigarette manufacturer concerned having an equal or equivalent total value as those strip stamps so returned. d.) Strip stamps affixed to packed cigarettes on hand which will be subject to new and lower tax rates under Presidential Decree No. 149 . Cigarette manufacturers in possession of packed cigarettes affixed with strip stamps under the old and higher tax rates may file a claim for tax refund or tax credit corresponding to the decrease in specific tax rates pursuant to Presidential Decree No. 149. Said claim shall be filed in accordance with existing revenue rules and regulations and the provisions of Section 306 of the National Internal Revenue Code, as amended. e.) Cases where a cigarette factory is in possession of strip stamps already affixed to packed cigarettes and involving concurrent increase and decrease in tax rates in accordance with Presidential Decree No. 149 . In cases where a cigarette factory is in possession of strip stamps already affixed to packed cigarettes as of midnight, June 30, 1973, and involving concurrent increase and decrease in tax rates, an offsetting of the amount refundable against the tax differential due arising therefrom shall be allowed as shown in the following illustration: Differential Actual Total Value Stamps Differential Old Rates New Rate Per Stamp On Hand Value P2.50/M (30's) @ P0.75 P3.00/M (30's) @ P0.09 P0.015 10,00 pcs. P150.00 3.75 (30's) @ 0.1125 3.00/M (30's) @ 0.09 (0225) 1,000 pcs. (22.50) Net Amount Still Due & Payable P127.50 ====== In the above illustration showing a preponderance of the amount due as tax differential over the amount refundable or subject to tax credit, the cigarette manufacturer shall pay the net amount due, covered by an Authority to Accept Payment (ATAP) duly prepared by the Tobacco Tax Division. Unless the net amount due has been duly paid as above required, the packed cigarettes already affixed with said stamps shall not be allowed to be removed from the factory premises. Where the offsetting will result in the preponderance of the amount refundable or subject to tax credit over the tax differential due from the cigarette manufacturer, such case shall properly be the subject of a claim for tax refund or tax credit, as the taxpayer may choose, in accordance with established office procedure on the matter and the provisions of Section 306 of the National Internal Revenue Code, as amended. The procedure herein prescribed and that under the Revenue Memorandum Order No. 7-73 should be strictly complied with effective July 1, 1973. MISAEL P. VERA Commissioner of Internal Revenue