Regulations Governing the Taxation of Timber and Other Forest Products

November 18, 1980 REVENUE REGULATIONS NO. 02-81 SUBJECT : Regulations Governing the Taxation of Timber and Other Forest Products TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope . Pursuant to the provisions of Section 326 in relation to Section 4 of the National Internal Revenue Code, these regulations are hereby promulgated to implement Batas Pambansa Blg. 83 which provides for the amended taxation of timber and other forest products. SECTION 2 . Definitions of Terms . For purposes of these regulations, the following definitions of terms are hereby adopted: (a) " Timber " shall mean any piece of wood having an average diameter of at least 15 centimeters and at least 1.5 meters long, except all mangrove species which in all cases, shall be considered as timber regardless of size. casia Notwithstanding the foregoing, timber cut by concessionaire having an average diameter of more than 15 centimeters but below 36 centimeters when used by the same exclusively for the manufacture of pulp and paper shall be excluded from the above definition of timber. (b) " Squared timber " shall mean timber squared with an ax or other similar mechanical hard tools in the forest and which from the size of the piece and the character of the wood, is obviously unfit for use in that form. Such timber should be invoiced before being divided longitudinally or otherwise manufactured; if not, it should be assessed as manufactured timber. (c) " Manufactured timber " shall mean all timber other than round and squared timber and shall include logs longitudinally sawn into pieces, even if only to facilitate transporting or hauling. The term shall also include, besides all sawn products, all timber hewn or otherwise worked to approximate its finished form, such as house posts, ships keels, mine props, ties, trolly poles, bancas, troughs, bowls, cart wheels, table tops, and other similar articles. (d) " Firewood " shall mean trees or parts thereof used for domestic household fuel generation, except all mangrove species. (e) " Pulpwood " shall mean any wood of whatever form or size commercially used for the manufacture of any type of pulp. (f) " Chipwood " shall mean basic wood materials, other than those used as firewood, fuelwood or raw materials for the manufacture of solid wood products, which are suitable for conversion into chips by means of either a chipping machine or hand tools in the bulk processing and manufacture of paper, chipboard, fibreboard, hardboard, and other fibre products. (g) " Fuelwood " shall mean trees or parts thereof used for industrial or commercial fuel generation. (h) " Wood waste of timber " shall mean wood generated incidental to harvesting timber such as log trims, tree tops, branches, buttresses, culls, splits, crooks, and the like. (i) " Destination " shall be deemed to be the place where the forest products are unloaded from common carriers or towed by water which place shall be outside the geographical boundaries of the areas covered by the forestry license. (j) " Reshipment " shall be understood to mean the removal of forest products from the original destination as appearing on the auxiliary invoice. cdt (k) " Forest Product " shall mean timber, pulpwood/chipwood, firewood, fuelwood and minor forest products such as bark, tree tops, roots, including other tree products such as flowers, fruits and leaves, resins, gum, wood oil, honey, beeswax, nipa, rattan, or other forest growth such as grass, shrubs, and flowering plant, the associated water, fish, game, scenic, historical, recreational, and geological resources in public forest lands, national park, game refuge and bird sanctuary and other such areas and reservations, grazing lands and mineral lands. SECTION 3 . Classification of forest products . For purposes of the forest charges herein prescribed, forest products shall be grouped into three main categories, to wit: (a) Timber Timber is further sub-classified into four categories in accordance with existing Forestry Administrative Order No. 32-1, as follows: (i) First Group Akle Duyok-duyok Manggasinoro Akleng-parang Ebony Maranggo Afu Gisok Margapali Almaciga Gisok-gisok Matang-usa Almon Guijo Mayapis Mahogany Igem Molave Amugis Ipil Narek Apitong Kaburo Narig Aranga Kalamansanai Narra Bagtikan Kalantas Nato Bakan Kaliot Palosapis Balu Kamagong Pagatpat Banaba Kamuning Pahutan Bansalagin Kulilisiau Piagau Banuyo Lanete Pine Benguet Batikuling Lanutan Red Lauan Batitinan Liusin Sangilo Betis Lukinai Saplungan Bitanghol Lumbayao Sudiang Bitaog Lumbayao-bato Supa Bulong-eta Magasusu Tabau Cana-fistula Makaasim Tabigui Dagang Malaanonang Tangile Dangula or Sasalit Malabunga Tambulian Dao Malakadios Teak Dungon Malakauayan Tiaong Dungon-late Malugai Urung Malaguijo White Lauan Mangkono Yakal Manggachapui (ii) Second Group Agoho Katmon Marabitaog Agoho del Monte Katmon-kalabau Oak Alupag Kayugalu Pamitaogen Alupag-Amo Kubi Phil. Chestnut Bagras Lamio Pili Batete Lanipau Raintree (Acacia) Batino Loktob Taba Bayok Malabatino Tamayuan Binggas Malabayabas Tanglin Dita Malakatmon Tiga Kamatog Manggis Toog Anubing Mangkas Tukang-kalau Mapilig (iii) Third Group Amayan Gisihan Matamata Anislag Gugas Miau Antipolo Marang Moluccan sau or falcata Api-api Kaatoan-bangkal Nangka Bakauan Kalingag Pototan Balakat Kalumpit Sakat Balikbikan Kansulud Salakin Balobo Kato Salingkugi Bangkal Kayatau Sandit Balukanag Kuling-manuk Santol Bayanti Lago Tanghas Busaing Lamog Tangal Bogo Langarai Talisai Bolon Malakamias Talisai-gubat Bulala Malapinggang Taluto Bulog Malapapaya Tinaang-pantai Busaing Malasaging Tuai Dalinsi Malatumbaga Unik (iv) Fourth group the fourth group shall include all species not included in any of the other groups. The above classification of timber shall be subject to any revision that may be issued by the Director of Forest Development duly approved by the Minister of Natural Resources as shall be published in an appropriate Forestry Administrative Order. (b) Firewood/fuelwood Only third and fourth group types of timber hereinabove classified, except all mangrove species may be removed as firewood. However, if jointly authorized by the Ministers of both of the Ministries of Natural Resources and Agriculture, first and second group woods may be removed for firewood purposes from land which is more valuable for agriculture than for forest purposes. (c) Minor forest product shall refer to all other forest products as enumerated in Section 6 (C) of these regulations. SECTION 4 . Mode of measurement . Except as hereinbelow provided, all timber shall be measured in metric system and manifested in the round or squared, before being sawn or manufactured. (a) Round timber . The volume of all round timber including pulpwood and chipwood shall be ascertained by multiplying the average cross section of both ends of the log or the cross section thereof at half the length (midpoint), as the case may be, exclusive of the bark (underbark), by the length of the log. For practical purposes, the average cross section of the timber shall be determined on the basis of the average diameters at both ends regardless of length. Diameter values shall be expressed in whole wood or even centimeters fractions over half centimeter shall be counted up and fractions less than-half shall be ignored. Lengths shall be measured to the nearest whole decimeter value; over half decimeter shall be counted up and less than half decimeter shall be ignored. If a log in the round, cut under license is measured and manifested by authorized forest officers, the Director of Forest Development shall make due allowance for rot and cavities, or other natural defects but from any decision of the Director of Forest Development in this respect, an appeal shall lie to his Ministry Head, whose decision shall be final. The manifest of timber cut by licensees operating sawmills and other wood processing plants in or near the forest shall be attested to by authorized forest officers whenever practicable. 1. CYLINDRICAL LOGS 2. IRREGULAR LOGS (b) Squared timber The volume of squared timber shall be ascertained by multiplying the average of the cross section measured by the length. The volume so ascertained represents only 60% of the round log. For purposes of computing the tax base upon which the forest charges are to be levied, the 40% loss in squaring should be added back to the volume of the squared timber as above determined: Provided, however , that if squared timber cut under license is measured and manifested by forest officers, the Director of Forest Development shall make due allowance for rot, cavities, or other natural defects but from any decision of the Director of Forest Development in this respect, an appeal shall lie to his Ministry Head whose decision shall be final. The privilege of manifesting timber after squaring shall, however, be granted only to licensees who have squared their logs in the forest with the ax and intend to take it to the market in this form. (c) Octagonal log In computing the volume of approximately octagonal logs (four sides being hewn and the other four unhewn), the average diameter connecting the two pairs of opposite unhewn sides of the small end shall be used. (d) Banca In measuring a banca for assessment, the diameter shall be determined by drawing a line from the highest point on the stern to the highest point on the bow and measuring from this line to the bottom of the banca provided that the diameter thus measured is not less than the beam of the banca, otherwise, the beam shall be taken as the diameter of the log from which the banca was made. (e) Pointed timber In computing the volume of a piece of timber which comes to a point or nearly to a point at one end, the average diameter will be used instead of the diameter of the small end, if the diameter of the small end is less than, or equal to, one-half of the diameter of the large end. (f) Nosed or sniped logs or otherwise irregular cut But logs with deep undercuts shall be measured for length from point midway between the extreme end of the undercut and the saw cut line. In case of nosed or sniped logs the full length shall be taken. (g) Sawn timber The volume of all sawn timber shall be determined by multiplying the average width by the average thickness and the product by the length. The volume shall be doubled in the absence of an agreement between the licensee and the Director of Forest Development in accordance with the provisions of the second paragraph of Section 271 of the Tax Code. If sawn or otherwise manufactured timber is found which has not been manifested in accordance with the provisions hereof, the corresponding forest charges shall be assessed on twice the volume of the actual contents of such sawn or manufactured timber. (h) Firewood/fuelwood/pulpwood The volume of firewood/ fuelwood/pulpwood shall be ascertained by first measuring the stack volume (talaksan/stere) of the firewood/fuelwood/pulpwood billets, thence, convert the stack volume of one (1) cubic meter (1m x 1m x 1m) to its solid volume by multiplying stack volume by the factor 4/5 or 80% which shall then be the basis for the forest charges. However, weight scaling may be authorized with the use of a certified weighbridge after a weight to volume factor has been established and validated and approved for use by the Commissioner of Internal Revenue upon the recommendation of the Director of Forest Development. In any commercial sale of timber in the local market, the timber shall be measured only in accordance with the provisions of this section. In cases where deductions are to be made from the total volume of the timber to provide for sapwood, rot, cavities or other natural defects, such deductions shall be limited only to the extent of actual defects of the timber and shall not include such parts thereof as may otherwise be found of commercial value. For purposes of these regulations, "other natural defects" shall be limited only to brash center and heart check only. SECTION 5 . Numbering, marking and manifesting forest products . (a) On timber and other minor forest products . For purposes of identification, pieces of timber shall, after felling and bucking or topping and before removal from the cutting area, be marked permanently by the licensees with their private hatchet or hammermarks registered with the Director of Forest Development and shall also be serially numbered and listed on a log scale report. This requirement, however, shall not apply to sawn lumber, ties, manufactured timber and small poles having a length of not more than 1-1/2 meters and an average diameter of not more than 15 centimeters. A new series of numbers shall not be used or commenced oftener than once in an accounting year. Said private marks and numbers shall be indicated in the proper columns of the auxiliary invoice, BIR Form No. 14.04 for timber and, BIR Form No. 14.05 for firewood and other minor forest products as specified by the Bureau of Forest Development. (b) On sawn timber . If the timber measured and invoiced in the round form in accordance with Section 4 hereof, is sawn or manufactured at the point of origin before shipment, the number of pieces produced and their dimensions shall be shown in an accompanying tally sheet duly attested by Bureau of Forest Development authorized personnel, for the purpose of identification and verification at the point of destination. (c) Manifesting sawn timber . Sawn timber may be listed on auxiliary invoices in metric scale, but the total quantity by groups must be shown in cubic meters. Four hundred and twenty-four board feet shall be considered as the equivalent of one cubic meter of round log. SECTION 6 . Rates of charges on forest products . There shall be collected charges on the following forest products: (A) Timber . On each cubic meter of timber cut in forest land in the Philippines, whether removed therefrom or not: (i) On timber in the first and second groups Thirty Pesos (P30.00); (ii) On timber in the third and fourth groups, not including firewood Fifteen Pesos (P15.00); (iii) On branches and other recoverable wood wastes of timber such as log ends, tops, and stumps, regardless of group classification, when used as fuelwood or raw materials for the manufacture of finished wood products Two Pesos (P2.00). (B) Firewood . On each cubic meter of firewood cut in forest land, except all mangrove species Two Pesos (P2.00). cd i (C) Minor forest products . Tax base and rates of charges on forest products: Products Unit Actual Market Forest Value Charge 1. Charcoal (Carbon vegetal) Cubic meter P 100.00 P 10.00 2. Daluru Cubic meter 120.00 12.00 3. Orchids 4. Clean Salago bark 100 kilograms 42.50 4.25 5. Manila copal (almaciga) 100 kilograms 250.00 25.00 6. Manila Elimi (Pili resin) 100 kilograms 120.00 12.00 7. Guta-percha 100 kilograms 420.00 42.00 8. Diliman, nito and other vines 100 kilograms 100.00 10.00 9. Buri (dried and rolled in bundles) 100 kilograms 60.00 6.00 10. Buri (green leaves attached to the stem) 100 kilograms 12.00 1.20 11. Dyebark (nique) 100 kilograms 120.00 12.00 12. Dyewood (sibucan) 100 kilograms 12.00 1.20 13. Tanbark (Cascalotes) other than tangal 100 kilograms 30.00 3.00 14. Gogo bark 100 kilograms 120.00 12.00 15. Cabo-negro 100 kilograms 30.00 3.00 16. Honey syrup, unrefined Liters 50.00 5.00 17. Beeswax, refined 100 kilograms 720.00 72.00 18. Pulpwood chipwood Cubic meter 50.00 5.00 19. Beeswax 100 kilograms 360.00 36.00 20. Kamagsa 100 kilograms 36.00 3.60 21. Hingiw 100 kilograms 24.00 2.40 22. Dipterocarp resins (balao, etc.) 100 kilograms 100.00 10.00 23. Split rattan 100 kilograms 500.00 50.00 24. Unsplit rattan (2 cm. or less in diameter) 1,000 linear meter 300.00 30.00 25. Oleo resin (balao) Liter 3.00 .03 26. Tree ferns Whole tree 15.00 1.50 27. Unsplit rattan (over 2 cm. in diameter 1,000 linear meter 750.00 75.00 28. Nipa leaves 1,000 shingles or less than 1.5 meters in length) 400 kilograms 210.00 21.00 29. Lumbang or baguilumbang nuts (husked) 100 kilograms 60.00 6.00 30. Lumbang or baguilumbang (unhusked) 100 kilograms 30.00 3.00 31. Round table tops mftd. from buttresses of tress of first group: a) 50 cms. in dia. or less 1 table top 30.00 3.00 b) 100 cms. in dia. or less 1 table top 30.00 3.00 c) 150 cms. in dia. or less 1 table top P60.00 P6.00 d) Over 150 cms. in dia. 1 table top 90.00 9.00 32. Round table tops mftd. from buttresses of trees of the second or lower groups: a) 50 cms. in dia. or less 1 table top 15.00 1.50 b) 100 cms. in dia. or less 1 table top 30.00 3.00 c) 150 cms. in dia. or less 1 table top 30.00 3.00 d) Over 150 cms. in dia. 1 table top 90.00 9.00 33. Boho or cana-boho (Spanish-Filipino): bolo, boho, lumanpau, bokaui (Tagalog), Bagakan, Bagakai, (Visayan), Bulu, bolo (Visayan) (Iloco), Gras (Bicol) 100 pieces 500.00 50.00 34. Nipa sap 1,000 liters 3.60 .36 35. Buri fiber 1 kilo 30.00 3.00 36. Barks of cutch (green) 100 kilograms 25.00 2.50 37. Barks of cutch (dry) 100 kilograms 50.00 5.00 38. Anahaw leaves or palma grave leaves 100 leaves 30.00 3.00 39. Canela or Cinamon bark 100 kilograms 100.00 10.00 40. Bamboo from public forest 100 pieces 300.00 30.00 41. Tangal bark for tuba drink 100 kilograms 150.00 15.00 The market value of the various forest products on which forest charges may thus be collected shall be determined from time to time by a joint assessment of the Commissioner and the Director of Forest Development, to be approved by their respective Ministry Heads, the same to be published for the information of the public in the Official Gazette or in two daily newspapers of national circulation, and posted in a conspicuous place in the municipal building of a municipality concerned. SECTION 7 . Time, manner and place of payment . (a) Forest products cut, gathered and removed under license . The charges herein imposed on timber and other forest products cut, gathered, or removed under license by the Director of Forest Development shall be paid at the time of removal from or utilization of the same within the concession area. For this purpose, the licensee or his authorized agent shall prepare a log scale report to be countersigned by the authorized Bureau of Forest Development scaler before removal from cutting area which shall be later transferred in the prescribed auxiliary invoice, BIR FORM No. 14.04 and, in the case of other minor forest products, BIR Form No. 14.05, and pay the correct forest charges upon filing thereof with the Collection Agent or duly authorized treasurer of the municipality of the place where the timber concession is located or where the forest products were gathered and removed. However, where the prepayment of forest charges at the point of origin would result in undue hardship to the concessionaire or licensee, forest products, under auxiliary invoices, may be removed from the cutting area without prepayment, conditions upon filing of a forestry bond, in which case the forest charges shall be due and payable as follows: (i) When timber or other forest products are intended for export . In no case shall a customs collector allow timber and/or other forest products to be loaded aboard a vessel clearing for a foreign point without being shown a tax clearance certificate issued by the Commissioner or the Regional Director of the region where the cutting area of such timber is located or where the forest products were gathered and removed. For this purpose, the shipper/concessionaire must pay all charges due on such timber and/or forest products to be exported before loading in such vessel. The Regional Director concerned shall issue the required tax clearance only after ascertaining that the auxiliary invoices are properly prepared and that the forest charges due on such declaration were actually collected . cdt (ii) When timber and other forest products are to be removed for domestic sales . The forest charges shall be due and payable within thirty (30) days from removal thereof at the cutting area, or where the forest products were gathered; provided that such date of removal shall in no case be beyond 30 days when the products were cut, gathered and removed. The amount of the surety bond which may be filed by a licensee pursuant to and under the conditions set forth in the next preceding sub-section shall be equal to the estimated forest charges due within one calendar quarter based on the annual allowable cut granted in the license; and that all additional cuts granted shall be covered with additional bonds before cutting the same; Provided , That the minimum amount of the surety bond shall not be less than ten (P10,000) thousand pesos. All shipments of forest products shipped under bond must be accompanied with an authentic copy of the letter of approval of the said bond by the Commissioner of Internal Revenue or Deputy Commissioner of Internal Revenue. The mere filing of a forestry bond with the Bureau of Internal Revenue without the corresponding approval thereof is deemed without bond. Copies of the letter of approval of a forestry bond must be furnished to the collection agent at the points of origin, revenue district officers and the corresponding revenue regional directors who have jurisdiction over the municipality of origin. (b) Payment of charges on forest products taken without license/permit . Timber and other forest products cut without license/permit issued by the Director of Forest Development shall be assessed of the forest charges and surcharges due the government based on the gross volume without benefit of deductions for rot, cavities or other natural defects and the same shall be collected immediately upon apprehension. The forest products shall be confiscated whether the forest charges are paid or not by the possessor thereof and shall be disposed of in accordance with the procedure stated hereunder, without prejudice to the filing of criminal charges pursuant to existing laws and regulations governing such violation. (c) Procedure in enforcing collection of charges and surcharges . The collection of unpaid forest charges and surcharges shall be effected through the seizure of the products involved, which may be sold in accordance with the procedure prescribed hereunder, unless the forest products are badly needed by the government either the municipal, provincial, city or national. acd The forest products seized in accordance with the preceding paragraph shall be sold at public auction. If there is no bidder at such sale, or if the highest bid is less than the regular forest charges and surcharges due, and the delinquent taxpayer has no other property which may be distrained or levied upon, the collection agent or seizure agent shall consign the products to the Republic of the Philippines for use in public works, school building purposes, etc., and the government agency receiving such forest products shall submit a certificate of disposal indicating the quantity and the nature of the use of said forest products to the revenue district officer having jurisdiction over the case. Five copies of the auxiliary invoice shall be prepared by the government agency concerned and the same to be forwarded to the Revenue District Officer retaining two copies thereof as vouchers in his property accounts. The Revenue District Officer shall forward the remaining auxiliary invoices to the Commissioner, Attention: The Chief, Agriculture and Natural Resources Division, Bureau of Internal Revenue, Diliman, Quezon City. Upon receipt of the auxiliary invoices in the office of the Commissioner of Internal Revenue, one copy thereof shall be forwarded to the Commissioner of Audit through the auditor of the Bureau of Internal Revenue and one copy to the Director of Forest Development. If the seizure or apprehension is made directly by authorized personnel of the Bureau of Forest Development, said person shall submit a certificate of disposal of the forest products seized indicating the quantity, the amount it was disposed and the amount of forest charges and penalties due thereon. The authorized personnel of the Bureau of Forest Development must likewise prepare five copies of the auxiliary invoice and forward the same to the Revenue District Officer retaining two copies thereon as vouchers in his property accounts. Upon receipt of the auxiliary invoice in the office of the Commissioner of Internal Revenue, one copy thereon should be forwarded to the Auditor General (now the chairman of the Commission on Audit) through the Auditor of the Bureau of Internal Revenue and one copy to the Director of Forest Development. The forest charges and surcharges due thereon shall be paid out of the proceeds of the disposition upon filing of the auxiliary invoice prepared in accordance with the foregoing procedure. cd i SECTION 8 . Exemptions from the payment of forest charges . The following timber and other forest products are exempt from the payment of forest charges: (a) Forest products cut or gathered under a gratuitous license . No charges shall be collected on forest products cut or gathered under a gratuitous license issued by the Director of Forest Development. However, such forest products shall nonetheless be invoiced irrespective of the group of timber, and must be discharged in the same manner as forest products cut or gathered under license. The word "Gratuitous" shall be written on the auxiliary invoice after the number of the forestry license. Any forestry violation of the requirement to prepare the auxiliary invoice after cutting shall be deemed as cutting without license for which the applicable charges and surcharges shall be imposed. Copies of the auxiliary invoices must be distributed in the same manner prescribed in these regulations. (b) Forest products cut or gathered from public land under a tree farm leased with the government . No charges shall be collected on trees and products removed from public lands planted to ipil-ipil and/or falcata under a tree farm lease with the government. (c) Forest products cut or gathered from private lands . No forest charges shall be collected on all forest products cut, gathered and removed from any private land the title to which is registered with the Director of Forest Development as required by the Forest Laws; Provided, however , the owner who desires to cut, gather and remove timber and other forest products from such land shall secure a license from the Director of Forest Development in accordance with the Forest Law and Regulations. The cutting, gathering and the removing of timber and other forest products from said private lands without license shall be considered as unlawful cutting, gathering and removing of forest products from public forests and shall be subject to the charges and surcharges prescribed for such cases. SECTION 9 . Preparation of auxiliary invoice . Prior to removal of timber from the log landing, the licensee or his authorized agent duly provided with special power of attorney, shall prepare a log scale report which must in all cases be checked and countersigned by the Bureau of Forest Development authorized scaler, which will later be transferred to an auxiliary invoice (B.I.R. Form No. 14.04) in such manner as provided herein; likewise holders of minor forest products licensees issued by the Bureau of Forest Development, after cutting such products from the areas shall list such products on auxiliary invoice ( B.I.R. Form No. 14.05) which may be secured from the offices of the local collection agents. Said auxiliary invoices when completed shall be sworn to before the collection agent concerned by the license or his agent/agents aforementioned at the time of payment of forest products. These auxiliary invoices are accountable forms, printed in quintuplicate, serially numbered and bound in book form. After they are duly sworn to before the collection agents concerned, the said Collection Agents shall compare the barrios, sitios and municipalities shown thereon with those described in the copy of the licenses furnished by the Bureau of Forest Development. The forest charges may be collected from the licensee by issuing the duplicate copy of the official receipt to the licensees. The auxiliary invoices shall be distributed as follows: Original copy to be forwarded by the Collection Agent to the Commissioner of Internal Revenue; Duplicate copy to be the permanent file copy of the licensee; Triplicate copy to be retained by the Collection Agent as his copy; Quadruplicate copy to be forwarded to the District Forester; Quintuplicate copy to be retained by the licensee which shall be given to the purchaser, together with the sales invoice or guia of forest product issued, in case the forest products are sold. The licensee/concessionaire must prepare such auxiliary invoice in such manner that the forest products to be listed in one auxiliary invoice should approximate what could be ordinarily loaded in one vehicle commonly used in transporting said products from the cutting area to the point of discharge where corresponding discharge permit in all cases shall be secured at the points of destination by presenting the auxiliary invoices to the collection agents, revenue district officers or revenue regional directors, as the case may be. Failure on the part of the lessees/concessionaires to secure the discharge permit shall automatically give rise to the penalties imposed for discharging without permit. However, before the revenue official concerned issues the discharge permit, he shall cause the verification whether or not the forest products, quantity and quality, are those listed therein, and the signature of the licensee or his authorized agent must be duly ascertained to be authentic. If other persons signed the auxiliary invoices, or the auxiliary invoices are in the custody of persons other than the authorized agents of the licensee, or if the auxiliary invoices are not signed, the invoices shall be deemed void, in which case, the licensee/concessionaire shall be subject to the penalties imposed on transporting forest products without invoice. In case reshipment consists of timber, the official receipts evidencing payments of forest charges shall be attached to the accompanying auxiliary invoice, or if shipped without payment, a copy of the approved forestry bond or a certification to that effect, required under Section 273 of the Tax Code, shall be attached. Upon arrival of the forest products at the point of reshipment, the auxiliary invoice shall be presented to the revenue district officer or collection agent in case the former officer is not available in the place of destination, for verification of the forest products. In all cases, where the weight, measure or number of pieces or package is found to be in excess upon remeasurement at destination as compared with the weight, measure or number of pieces or package per original measurement as manifested in the auxiliary invoices, there shall be assessed against the licensee or possessor the regular forest charges due plus surcharges for transporting without auxiliary invoices and penalty for late payment imposed in Sec. 10 hereof. In the event the excess as verified above is likewise found to be over and above the total of the annual and additional allowable cut as may be ascertained at the end of the year, then the excess of the forest products cut shall likewise be subject to the penalties imposed on illegal cutting as prescribed in section 10 hereof. Consignees of forest products upon which the charges have been paid who reship a part thereof, shall certify on the commercial invoice accompanying the consignment, as follows: "I certify that the products listed herein consisting of ___________ ________________________________________________ are part of the forest products described in an auxiliary invoice dated _____________ ________________________ covering __________________________ and are to be shipped on _______________________________________ (conveyance) to_________________________________________________________ (consignee) __________________________________________________________ (address) ______________________ Signature of shipper Persons shipping forest products under the provisions of the preceding paragraphs but who do not keep or issue commercial invoices shall provide themselves with printed "guias of forest products" in book form duly registered with the Office of the Collection Agent concerned which shall substantially be worded as follows: "GUIA OF FOREST PRODUCTS No. _______ " "I certify that the products described herein are part of the forest products manifested in auxiliary invoice No. _______ dated ____________ to be shipped per __________________ to ____________________ (conveyance) (consignee) ___________________________________________________________ (address) -------------------------------- Pieces/Number : Weight or : Volume : Kind of Packages : Measurement : : Products -------------------------------- : : : -------------------------------- : : : -------------------------------- _____________________ ____________________ Date Signature These guias shall be serially numbered in triplicate and bound in books of 50 each booklet. The original shall accompany the products transported and the duplicate to be attached to the auxiliary invoices in the file of the shipper, and the triplicate to be retained in the booklet. SECTION 10 . Penalties . The lessee/concessionaire shall be liable to the following penalties for any violation hereof, without prejudice to other penalties under existing laws. (1) For illegal cutting When forest products are unlawfully cut or gathered in any forest lands without license or if under license, but in violation of the terms thereof or cutting/damaging undersized timber and residuals, there shall be added to the forest charges an amount equal to three hundred per centum (300%) of the forest charges due; (2) Removal of forest products without auxiliary invoice . When forest products are removed without auxiliary invoice, there shall be added to the forest charges an amount equal to fifty per centum (50%) of the forest charges due; (3) Discharge of forest products without permit When forest products are discharged from boat, car, cart or other means of transportation of destination point without the proper discharge permit, there shall be added to the forest charges an amount equal to fifty per centum (50%) of the forest charges due; (4) For late payment of forest charges (a) In case the forest charges are not paid within the prescribed period not due to willful neglect, there shall be added thereat a surcharge of twenty-five per centum (25%) of the tax due, the increment to be a part of the tax and the entire unpaid amount shall be subject to interest at the rate of twenty per centum (20%) per annum . (b) Where a false or fraudulent return is made, there shall be added to the forest charges a surcharge of fifty per centum (50%) of the tax due, and the entire unpaid amount shall be subject to interest at the rate of twenty per centum (20%) per annum . In all cases, the amounts so added shall be collected in the same manner and as part of the forest charges, as the case may be. cdt SECTION 11 . Reports required . (a) For operators of sawmill . All operators shall furnish the following reports to the Collection Agent, Revenue District Officer and the Commissioner of Internal Revenue, Attention: The Chief, Agriculture and Natural Resources Division, within fifteen (15) days after the end of each month: (1) Monthly sawmill reports required by the Bureau of Forest Development; (2) Log scale record (BIR Form No. 14.15) This record shall be accomplished in four copies and shall contain the description of all logs sawn, the dates of sawing, the species, dimension and the total volume in cubic meters, total volume by group, using the mode of measurement described in these regulations. The log scale record shall be distributed within fifteen days after the end of each month, as follows: Original copy Commissioner of Internal Revenue; Duplicate copy Retained by the sawmill operator; Triplicate copy Collection Agent; Quadruplicate copy District Forester. (3) Daily trimmer tally (BIR Form No. 14.11) This form shall be used for recording the tally of all lumber sawn as it passes through the trimmer. This record is kept by the sawmill operator to be made available to any inspecting forestry and internal revenue officials, and to be preserved in accordance with the bookkeeping regulations. (4) Sawmill invoice (BIR Form No. 14.13) This form should be in triplicate copies, bound in booklets of fifty numbers each booklet, with serial numbering starting from 1. The sawmill invoice shall show the pieces, dimensions, total board feet, unit selling prices per board foot and the total selling price, if sold. The original and duplicate copies shall accompany the lumber upon removal from the sawmill compound. (5) Monthly abstract of sawmill invoices (BIR Form No. 14.14) This form is an abstract of all invoices issued during a month to be accomplished in quadruplicate and to be distributed in the same manner as in Log Scale Record (BIR Form No. 14.15). The abstract should show the following information: cd a. The serial numbers of sawmill invoices issued; b. The names and addresses of the consignees or purchasers; c. The number of pieces and the corresponding total board feet; d. Destination of the lumber; and e. The breakdown showing the total board feet by group. (6) Certificate of origin Every shipment or removal of lumber from the sawmill as well as other forest products to another municipality or province shall be accompanied with a Certificate of Origin to be issued by the Revenue Collection Agent at the point of origin or by the Revenue District Officer in case the latter has his office at the point of origin showing the following: a. Total pieces and board feet to be shipped; b. Consignee and/or buyer and his address; c. Means of conveyance; d. Sources of logs where the lumber were sawn and/or products to be shipped; aisa dc e. Data showing payments of forest charges of the logs sawn. The certificate of origin shall be prepared in the same manner, number and to be distributed like that of Log Scale Records. (7) Inventory of logs and lumber The inventory of logs at the end of each month shall be taken in accordance with the mode of measurement described in these regulations showing the species, dimensions and gross volume and to be kept in book form. Likewise, inventory of lumber shall show the kind as Manila Grade, commercial shorts, narrows or sticks. The form, grade or cut lumber shall not be included in the inventory. These inventories must also be shown as to group. Logs and lumber purchased from other sources must be recorded and included in the monthly sawmill reports. The documents supporting the acquisition thereof shall be kept by the sawmill operator in accordance with the bookkeeping regulations. (8) Sales invoices of wood waste sold to veneer manufacturer or other wood-using processors and wood-waste using industries either for fuel or for manufacturing purposes. (9) Quarterly summary of sales of lumber The operators are required to submit within fifteen days after the end of each calendar quarter a summary report of sales invoices. Local sales should be reported separately from export sales, issued during the month, consisting of (a) date of sales; (b) sales invoice numbers; (c) names of buyers; (d) addresses of buyers; (e) amount received; (f) total volume in board feet of manufactured lumber. (b) For operators of veneer and plywood plants . All operators of veneer and plywood plants are required to acquire logs for manufacture into veneer and plywood panels from legitimate timber licensees or from their own concessionaire duly supported by auxiliary invoices, sales invoices and/or guias of forest products as the case may be. Such documents supporting purchases of logs shall be kept in the establishment of the plant in accordance with the bookkeeping regulations. The volume and value of wood waste purchased from outside sources and from its own sawmill intended for fuel and material for veneer manufacturing shall likewise be recorded. Within fifteen days after the end of each month, the aforesaid operators are required to submit to the Collection Agent, Revenue District Officer and the Commissioner of Internal Revenue, Attention: The Chief, Agriculture and Natural Resources Division, BIR, Diliman, Quezon City: (1) Monthly report in quintuplicate showing (a) the names of log suppliers; (b) their addresses; (c) gross volume in cubic meters by group, duly measured in accordance with these regulations; (d) unit price; (e) total amount paid; (f) number of timber license of supplier; (g) location of timber concession of each log supplier; and (h) the total volume of logs processed during the month, thereby showing ending log inventory. This monthly report shall be distributed as follows: acd Original copy Commissioner of Internal Revenue; Duplicate copy Copy of plant operator; Triplicate copy Collection Agent in the locality; Quadruplicate copy Revenue District Officer; Quintuplicate copy District Forester. (2) Quarterly summary of sales of veneer, plywood The operators are required to submit within fifteen days after the end of each calendar quarter a summary report of sales invoices, local sales should be reported separately from export sales, issued during the month, consisting of (a) date of sales; (b) sales invoice numbers; (c) names of buyers; (d) addresses of buyers; (e) amount received; (f) total square feet in the case of veneer showing thickness and in the case of plywood, the number of pieces or panels sold, sizes (showing thickness, width and length). (3) Annual report In addition to the above, thirty days from the close of its accounting year, a complete inventory of veneers, plywood and logs shall be taken by the operator and recorded in accordance with the bookkeeping regulations. SECTION 12 . Abolition of specific forest charges . All existing charges and fees directly imposed on forest products under existing general and special laws, to wit: regular forest charges; reforestation fund charges; information fund charges; research fund charges; Forpridecom charges; fees for measurement and development under FAO 64 are hereby abolished, except in the case of timber in log form, lumber, plywood and veneer when exported shall remain to be subject to the export duties. SECTION 13 . Repealing clause . All acts, laws, decrees, executive orders, rules and regulations, or parts thereof, which are contrary to or inconsistent herewith, except those granting tax incentives, are hereby repealed, amended or modified accordingly. SECTION 14 . Effectivity . These regulations shall take effect immediately. However, the rates of forest products prescribed above shall take effect as follows: (a) On timber in the first and second groups, twenty pesos per cubic meter until March 31, 1981, and thereafter the full rate of thirty pesos per cubic meter shall be imposed; (b) On timber in the third and fourth groups not including fuelwood, ten pesos per cubic meter until March 31, 1981, and thereafter the full rate of fifteen pesos per cubic meter shall be imposed; and (c) On firewood/fuelwood, two pesos per cubic meter. (SGD.) CESAR VIRATA Minister of Finance Recommended by: (SGD.) RUBEN B. ANCHETA Acting Commissioner