Internal Revenue Forest Products Regulations

April 17, 1972 REVENUE REGULATIONS NO. 03-72 SUBJECT : Internal Revenue Forest Products Regulations TO : All Internal Revenue Officers and Others Concerned PART I Promulgation, Tax Numeric Codes, Numbering, Marking, Measurement, Classification and Assessment of Forest Charges on Timber and Other Forest Products SECTION 1. Scope . In accordance with the provisions of Section 338 in relation to Section 262 to 273 of the National Internal Revenue Code, as amended by Republic Act No. 6110, Section 1024 of Republic Act No. 1937 otherwise known as the Revised Customs and Tariff Code, and the pertinent provisions of Republic Acts Nos. 3523 and 5526, the following regulations relative to the manner in which the charges on forest products shall be collected and paid, and the procedure to be followed by internal revenue officers and persons liable for the payment of said charges are hereby promulgated to supersede all precedents, rulings, regulations, administrative orders, and circulars heretofore published on the same subject, revising Regulations No. 85 dated December 28, 1934 of the Department of Finance. SECTION 2. Numeric Codes to identify the collection of charges imposed on forest products. 08-0000 Charges on forest products: 08-0100 Timber of first group 08-0202 Timber of second group 08-0300 Timber of third group 08-0400 Timber of fourth group 08-0502 Firewood (Bacauan, Tangal, etc.) 08-0504 Firewood (Highland species) 08-0600 Minor Forest Products 08-0700 Rental of forest lands 08-0800 Forestry Information Fund (Rep. Act No. 3523) 08-0900 Forest Research and Industrial Development Fund (Forpride Fund) Rep. Act No. 5526. SECTION 3. Numbering and marking of logs . For purposes of identification, pieces of timber shall, after felling and bucking, and before yarding, be marked permanently by the licensees with their private marks and shall also be serially numbered and listed on an auxiliary invoice. This requirement, however, shall not apply to sawn lumber, ties, manufactured timber and small poles having a length of not more than 1- 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 a fiscal 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). SECTION 4. Measurement of timber . Logs of more than 1- meters long and with an average diameter of more than 15 centimeters shall be designated as timber. Diameters used in computing volumes of logs are exclusive of the bark and if timber cut under license is measured and manifested by forest officers, the Director of Forestry will make due allowance for rot, cavities or other natural defects of the timber. (a) Round timber . Multiply the area of the small and exclusive of the bark by the length of the log. If more than 8 meters long, use the diameter at the middle of the log or the average of the diameters at both ends. (b) Squared timber . Multiply the average width by the average thickness and the product by the length, to which 40 per centum shall be added for loss in squaring. (c) Octagonal logs . 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) Measuring a 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 logs from which the banca was made. (e) Measuring 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) Measuring nosed or sniped logs or otherwise irregularly cut . Butt logs with deep undercuts shall be measured for length from a point midway between the extreme end of the undercut and the saw cut line. In case of nosed or sniped logs full length shall be taken. (g) Measuring sawn timber . The volume of all sawn timber shall be determined by multiplying the average width by the average thickness and the product of the length. This volume shall be doubled in order to ascertain the volume of the round log sawn. (h) Manifesting sawn timber . Sawn timber may be listed on auxiliary invoices in board feet, 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. (i) Illegal use of the so-called "commercial" table . In any commercial sale of timber in the local market, the timber shall be measured in accordance with the provisions of this section, and the use of the so-called "commercial table" is hereby prohibited. In cases where deductions are to be made from the total volume of the timber measured for sapwood, rot, cavities, or other natural defects and by blows of the axe, such deductions shall be limited only to the actual defects of the timber and shall not include such parts thereof as may otherwise be found serviceable. SECTION 5. "Squared timber" defined. "Squared timber" shall be taken to mean timber squared with an ax 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. The privilege of manifesting timber after squaring is granted only to licensees who have squared their logs in the forest with the ax and intends to take it to the market in that form. SECTION 6. "Manufactured timber" defined. "Manufactured timber consist of all timber other than round 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 approximately its finished form, such as house posts, ships knees, mine props, ties, trolly poles, bancas, troughs, bowls, cart wheels, table tops, and other similar articles. SECTION 7. (a) Grouping and assessment of timber Section 1821 of the Administrative Code as implemented by Forestry Administrative Order No. 32 known as the "1961 Classification of Trees into Groups", which took effect on March 15, 1961, as amended by Forestry Administrative Order No. 32-1, effective September 22, 1970, classifies trees into four groups, as follows: cdt OFFICIAL NAMES First Group Second Group Third Group Akle Agoho Amayan Akleng-Parang Agoho del Monte Anislag Afu Alupag Antipolo Almaciga Alupag-amo Api-api Almon Anubing Bacawan Mahogany Bagras Balakat Amugis Batete Balikbikan Apitong Batino Balobo Arannga Bayok Bangkal Bagtikan Binggas Batukanag Bakan Dita Biyanti Balu Kamatog Binuang Banaba Katmon Bogo Bansalagin Katmon-kalabau Bolon Banuyo Kayugalu Bulala Batikuling Kubi Bulog Batitinan Lamio Basaing Betis Lanipau Dalinsi Bitanghol Lokteb Gisihan Bitaog Malabatino Bugas Bulong-eta Malabayabas Baras Cana-fistula Malakatmon Kaotoan bangkal Dagang Manggis Kalingag Dangula or Sasalit Mangkas Kalumpit Dao Mapilig Kansulud Dungon Marabitaog Kato Dungon-late Oak Kayatau Duyok-duyok Pamitaogen Kuling-manok Ebony Philippine Chestnut Lago Gisok-gisok Pili Lamog Guijo Raintree (Acacia) Langarsi Igem Taba Malakamias Ipil Tamayuan Malambingan Kaburo Tanglin Malapapaya Kalamansanai Tiga Malasaging Kalantas Toog Malatumbaga Kaliot Tukang-kalau Matamata Kamagong Miao Kamuning Malucoan sau Kulilisiau Nangka Lanete Pototan Lanutan Sakat Liusin Salakin Lukinsi Salingkugi Lumbayao Sandit Lumbayau-bato Santol Magasusu Tanghas Makaasim Tangal Malaanonang Talisay Malabunga Talisay-gulat Malaguijo Taluto Malakadios Tinaang-pintsi Malakauayan Tusi Maluagai Unik Mangkone Manggachapui Manggesinore Maranggo Margapali Matang-usa Mayapis Narek Narig Nora Nato Palosapis Pagatpat Pahutan Piagan Pine, Benguet Red Lauan Sangilo Saplugan Sudiang Supa Tabau Tabigui 4th Group the fourth group shall include all species not included in any of the other groups. Before classifying as fourth class such timber as are not found in the foregoing classifications, internal revenue officers shall first make sure that same are not included in the said classification. (b) Section 264 of the Tax Code provides for the collection of the following charges on timber: First Group Timber P3.50 per cubic meter Second Group timber 2.00 per cubic meter Third Group timber 1.25 per cubic meter Fourth Group timber 0.60 per cubic meter (c) Charges on ebony, camagong and molave stripped of sapwood: Ebony P6.00 per cubic meter Camagong 5.00 per cubic meter Molave 4.00 per cubic meter SECTION 8. (a) Charges on firewood cut in public forests . On firewood cut in public forests and forest reserves, the following charges shall be collected: (1) On Bacauan, langaray, pototan and tangal P0.60 per cubic meter (2) On other woods 0.30 per cubic meter (b) Only third or fourth group wood can be taken for firewood if it is not more than one and one-half meters in length and not more than fifteen centimeters of the average diameters exclusive of the bark. However, at the discretion of the Director of Forestry, first and second group woods may be removed for firewood purposes from land which is more valuable for agricultural than for forest purposes. SECTION 9. Charges collectible on forest products cut, gathered and removed from unregistered private lands . The charges above described shall be collected on all forest products cut, gathered and removed from any private land the title to which is not registered with the Director of Forestry as required by the Forest Laws; Provided, however, That in the absence of such registration, 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 Forestry 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 10. Charges on other various and miscellaneous forest products . In accordance with the provisions of Section 269 of the Tax Code fixing charges on other various forest products, a charge of ten per centum on their market values, and providing that the Commissioner of Internal Revenue and the Director of Forestry shall make a joint assessment of the market value of such products, the following assessment is hereby made [The amount of charges appearing on the last column should be collected on these products without regard to their quality or to the municipality in which they are gathered or sold]: Assessed Market Products Unit Value Charges Charcoal (Carbon Vegetal) Cubic meter P20.00 P2.00 Daluru Cubic meter 3.00 0.30 Stone or earth Cubic meter 1.00 0.10 Clean Salago bark 100 kilograms 7.00 0.70 Manila Copal (Almaciga) 100 kilograms 25.00 2.50 Manila Elimi (Pili resin) 100 kilograms 20.00 2.00 Guta-percha 100 kilograms 70.0 7.00 Dilima and other vines used for tying 100 kilograms 50.00 5.00 Buri (dried and rolled in bundles) 100 kilograms 10.00 1.00 Buri (green leaves attached to the stem) 100 kilograms 2.00 0.20 Dyebark (nigue) 100 kilograms 20.00 2.00 Dyewood (sibucan) 100 kilograms 2.00 0.20 Tanbark (Cascalotes) other than tangal 100 kilograms 5.00 0.50 Gogo bark 100 kilograms 20.00 2.00 Cabo-negro 100 kilograms 5.00 0.50 Beeswax, refined 100 kilograms 120.00 12.00 Pulpwood for paper mfg. cubic meters 5.00 0.50* Beeswax 100 kilograms 60.00 6.00 Kamagsa 100 kilograms 6.00 0.60 Hingiw 100 kilograms 4.00 0.40 Dipterocarp resins (balao, etc.) 100 kilograms 10.00 1.00 Split rattan 100 kilograms 50.00 5.00 Unsplit rattan (2 cm. or less in diameter) 1,000 linear meter 20.00 2.00 Unsplit rattan (over 2 cm. in diameter) 1,000 linear m. 50.00 5.00 Oleo resin (Balao) liter 0.50 0.05 Tree ferns Whole tree 2.50 0.25 Nipa leaves - 1,000 shingles or less than 1.5 meters in length 400 kilograms 10.00 1.00 1,000 shingles of 1.5 meters or over in length 700 kilograms 20.00 2.00 Pine tree (Christmas) 1 linear meter 4.00 0.40 Lumbang or baguilumbang nuts 100 kilograms 10.00 1.00 Lumbang or banguilumbang nuts unhusked 100 kilograms 5.00 0.50 Round table tops mftd. from buttresses of trees of first group: 50 cms. in diameter or less 1 table top 5.00 0.50 100 cms. in dia. or less 1 table top 10.00 1.00 150 cms. in dia. or less 1 table top 20.00 2.00 over 150 cms. in diameter 1 table top 30.00 3.00 Round table tops mftd. from buttresses of trees of the second or lower groups: 50 cms. in dia. or less 1 table top P2.50 P0.25 100 cms. in dia. or less 1 table top 5.00 0.50 150 cms. in dia. or less 1 table top 10.00 1.00 Over 150 cms. in dia. 1 table top 15.00 1.50 Boho or cana-boho (Spanish- Filipino);bolo, boho, lumanpau, bokaui (Tagalog), Bagakan, Bagakai (Visayan), Bulu, bolo (Visayan, Iloco), Gras (Bicol) Nipa sap 100 pieces 5.00 0.50 Buri fiber 1,000 liters 0.60 0.06 1 kilo 5.00 0.50 Barks for cutch (green) 100 kilograms 2.50 0.25 Barks of cutch (dry) 100 kilograms 5.00 0.50 Anahaw leaves or palma grava leaves 100 leaves 5.00 0.50 Kanela or Cinnamon bark 100 kilograms (10% of market value) Bamboo from public forest 100 pieces 30.00 3.00 Tangal bark for tuba drink 100 kilograms 15.00 1.50 * New, as recommended by the Forestry-BIR Coordinating Committee on forest products. SECTION 11. (a) Charges on stone, earth, salt, and guano taken from lands under the jurisdiction of the Bureau of Forestry . Charges on stone, earth, salt, or guano gathered or removed from the lands under the jurisdiction of the Bureau of Forestry, there shall be collected such charges as may be fixed in particular cases by the Director of Forestry, with approval of the Department Head. (b) Action by the Collection Agent, Revenue District Officer and/or Revenue Regional Director, knowing of considerable removals of stone, earth, salt or guano from public forests . When it comes to the knowledge of the local collection agent, revenue district officer and/or revenue regional director that stone, earth, salt and guano are being gathered or removed in considerable quantities for commercial purposes without forestry license, the corresponding revenue officer should make a report thereof to the Commissioner of Internal Revenue. Said report should contain the following: (1) estimated amount and value of such products; (2) origin and destination thereof; (3) use for which intended; (4) name and address of person or firm gathering or removing same; (5) Whether or not the said person or firm is regularly engaged in gathering or removing these products for commercial purposes, and (6) such other data as may be deemed useful in determining the amount of forest charges that should be assessed thereon. When so removed, said products should not be seized or distrained, pending advice from the Director of Forestry, through the Commissioner of Internal Revenue, as to the charges to be collected; but the revenue officer who made the report may require the party concerned to file a cash bond, conditioned upon payment of such forest charges as may be assessed. PART II Removal and Discharge of Forest Products and the Payment of Forest Charges Due Thereon SECTION 12. (a) Payment of charges on products cut under license . Upon felling and bucking the timber, and before yarding the logs, the licensee or his authorized agent/agents who shall be provided with special power of attorney, shall list such forest products on blank forms of auxiliary invoice (BIR Form No. 14.04);likewise holders of minor forest products licenses issued by the Bureau of Forestry, after cutting such products from the areas, shall list such products on blank form of auxiliary invoice (BIR 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 licensee or his agent/agents aforementioned. These auxiliary invoices shall be accountable forms, printed in quintuplicate, serially numbered and bound in book form, cost of printing shall be paid by the licensees. 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 Forestry. 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 to 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 (b) All forest charges on timber and other forest products cut or gathered under license issued by the Director of Forestry shall be paid before removal from the place of concession. In the absence of a BIR forestry bond, and if the forest products are not removed, all the forest charges shall be due and payable on or before the 20th day of the month following that during which the said forest products are cut. However, if the timber or other forest products cut or gathered will be removed from the cutting areas under bond as provided in Section 273 of the Tax Code, the following requirements shall be complied with: (1) When timber or minor forest products are intended for export . A collector shall not allow products to be laden aboard a vessel clearing for a foreign port until the shipper shall produce a receipt from an internal revenue official showing that the taxes and other charges upon such products have been paid or a certificate from a proper official showing that the products are exempt from the payment of taxes and other charges (Sec. 1024 of Rep. Act No. 1937 Necessity of Tax Clearance). Where forest charges and other fees on forest products are made in the form of "prepayment" for purposes of expediting the issuance of export entry certificates, a tax clearance shall be issued by the local revenue officer to include compliance to the preparation of auxiliary invoice, securing of discharge permit and the collection of additional charges in case the payments are insufficient to cover the correct charges due the government. (2) When timber and other forest products are to be removed whether for domestic or export sales . The forest charges shall be paid within sixty days from the date of discharge thereof at destination, if bonded; Provided that the removal shall take effect within the month when cut, otherwise, when the forest products are to be exported, the foregoing provisions under Section 12 (b-1) shall govern. When the products removed are not intended for export, when removed under bond, the forest charges due shall be due and payable within sixty days from the date of removal, provided that such of removal shall in no case be beyond the end of the month when the products were cut. (3) (a) Payment of charges on forest products shipped under bond . Where the requirement to pay the charges in the municipality in which the forest products are cut or gathered before removal as provided in Section 273 of the Tax Code would cause great inconvenience to a Forestry licensee, the licensee may be permitted to ship his forest products from his concession to their destination duly accompanied by auxiliary invoices, and the corresponding discharge permit 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. The revenue official concerned shall then immediately cause the verification of the forest products and indicate at the back of the auxiliary invoices the number and date of the discharge permit issued by him, duly signed. The auxiliary invoices must be verified whether or not the forest products 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. Only authorized agents of the licensee are allowed to have custody of the auxiliary invoices. (b) Amount of bond required . The amount of the forestry 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 fiscal year based on the allowable cut granted in the license; and that all additional cuts granted shall be covered with the additional bonds before cutting the same; Provided, that the minimum amount shall not be less than one 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 Agents at the points of origin, Revenue District Officers and the corresponding Revenue Regional Directors who have jurisdiction of the municipality of origin. SECTION 13. Payment of charges on forest products taken without license . Timber cut without license issued by the Director of Forestry shall be assessed of the forest charges and surcharges, and other fees due the government based on the gross volume, without benefit to deductions for natural defects and the same shall be collected immediately upon apprehension, unless the forest products are distrained to be used by the government. Likewise, the corresponding forest charges and surcharges and other fees on other forest products shall be collected immediately upon apprehension. The forest products must be confiscated if the possessor thereof cannot pay the charges and penalties due thereon, without prejudice to existing laws and regulations governing the products. SECTION 14. Penalties in the form of surcharges The following penalties shall be imposed in addition to the regular forest charges due, as the case may require: cdt (a) 300% surcharge for cutting without license, or if cut under license, in violation of the terms and conditions thereof; or cutting undersized timber or on damaged residuals; (b) 25% surcharge for failure to list the forest products in an auxiliary invoice after cutting; (c) 25% surcharge for discharging without permit, if removed from the geographical limits of the concession; (d) 25% surcharge for late payment as the case may be. SECTION 15. Forest products cut or gathered under a gratuitous license . Forest products cut or gathered under a gratuitous license issued by the Director of Forestry shall be invoiced irrespective of the group of timber, and to be discharged in the same manner as forest products cut or gathered under license, except that no forest charges are due thereon. The word "gratuitous" shall be written on the auxiliary invoice after the number of the forestry license. Any violation of the requirement to prepare the auxiliary invoice after cutting shall be deemed as cutting without license. Copies of the auxiliary invoices must be distributed in the same manner prescribed in this regulations. SECTION 16. Forest products used in the construction and equipment of railways . Whenever the charter of a railway company containing an express exemption from the payment of forest charges on forest products cut or gathered by it under license issued by the Bureau of Forestry are to be used in the construction and equipment of its railways, in conformity with the provisions of Act No. 1544, the proper charges on the forest products so cut and gathered shall be collected as though the forest products are intended for commercial use. However, the amount so collected may be refunded upon verification by the Bureau of Internal Revenue that the forest products have been actually used in the construction and equipment of its railways. SECTION 17. Charges on timber cut for use in mining claim . When a license is granted by the Bureau of Forestry allowing a miner or mining company to cut timber for the development of a mining claim on land other than such as is covered by him or its claim, the charges on timber so cut shall be one-half of the charges provided in these regulations. SECTION 18. (a) " Destination " defined . As used in these regulations, the term "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. (b) Arrival at destination of shipments under bond . The discharge permit number, signature of revenue officer and date on which the forest products were discharged shall be entered in ballpen or indelible pencil on the corresponding space in all copies of the auxiliary invoice in order to prevent re-use, or otherwise, of the said auxiliary invoices for future shipments. The Collection Agents issuing discharge permits are required to keep and maintain log books, containing pertinent data on forest products for which discharge permits were issued. SECTION 19. (a) Discharge of forest products without permit . Whenever forest products are discharged without permit from a ship, boat, raft, cart, car, truck or other means of transportation in a barrio or place at such a distance from the office of the Collection Agent or Revenue District Officer that to secure a discharge permit before discharging said products would cause undue delay to the carrier or loss to the owner or consignee of the forest products, such owner or consignee shall immediately, after discharging the products, present the auxiliary invoice to the Collection Agent and/or Revenue District Officer who shall cause the immediate inspection of the forest products. The revenue officer assigned to check the forest products shall prepare a report to the Commissioner of Internal Revenue the distance of the place where the forest products are discharged, the means and condition of communication, the weather condition prevailing at the time of discharging the products and his corresponding recommendation as to whether or not the 25% surcharge for discharging without permit shall be imposed. (b) If forest products are discharged without permit under the conditions above-mentioned outside the regular office hours, the owner or consignee shall present the proper auxiliary invoice on the next working day to the Collection Agent. However, if the office of the Revenue District Officer is within the municipality or place of discharge, the request for inspection of the products shall made to him, who shall in turn, assign a fieldman to conduct the verification. The fieldman shall be required to fill-up the space at the back of the auxiliary invoice. SECTION 20. Charges to be collected on excess found upon remeasurement . If an excess of forest products cut or gathered under license is found upon remeasurement at destination, the regular charges should be collected on the excess thereon; Provided, That no charges shall be collected if the excess does not exceed 5 per centum of the original measurement. If, however, the excess is greater than 5 per centum of the invoiced weight, measure or number of pieces or package of such forest products, the licensee or possessor shall be required to pay the regular forest charges due plus the surcharges for transporting without auxiliary invoice; and on the excess of the forest products cut or gathered without license found upon remeasurement at destination, the regular and additional charges for cutting without license and transporting without auxiliary invoices shall be imposed and collected. Forest products cut by holders of licenses issued by the Bureau of Forestry which are verified in excess of 5 per centum of the original measurement shall be ascertained whether such excess is beyond the allowable cut granted in the license concerned. SECTION 21. Timber sawn or manufactured at the point of origin . If the timber measured and invoiced in the round form in accordance with Section 263 of the National Internal Revenue Code as amended by Republic Act No. 151, 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 forest officers whenever possible, for the purpose of identification and verification at the point of destination. PART III Sawmills SECTION 22. Sawmills Operated by Non-holders of timber licenses . Sawmills are classified by the Bureau of Forestry as follows: C = Circular sawmill DC = Double circular sawmill B = Band sawmill Irrespective of the capacity, the operators shall furnish one copy each of the monthly sawmill reports required by the Bureau of Forestry, to the Collection Agent, Revenue District Officer and Commissioner of Internal Revenue within fifteen days after the end of each month. The sawmill operators are also required to accomplish the following forms: (1) 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 this regulation. 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 District Forester (2) 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. (3) 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. (4) 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: 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 e. The breakdown showing the total board feet by group (5) 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 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. SECTION 23. Sawmills Operated by Holders of Timber Licensees . (1) This group of sawmill operators are required to maintain the various records described in Section 22 (1),(2),(3),(4) and (5) of these regulations and to prepare and distribute, in the same manner and number, the monthly sawmill reports required by the Bureau of Forestry. (2) 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 cull lumber shall not be included in the inventory. These inventories must also be shown as to group. (3) 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. PART IV Operators of Veneer and Plywood Plants SECTION 24. Operators of Veneer and Plywood Plants Without Timber License (a) They are required to acquire logs for manufacture into veneer and plywood panels from legitimate timber licensees duly supported by auxiliary invoices, sales invoices and/or guias of forest products. Such documents supporting purchases of logs shall be kept in the establishment of the plant in accordance with the bookkeeping regulations. Within fifteen days after the end of each month the operators are required to prepare a monthly report in quintuplicate showing 1) the names of log suppliers, 2) their addresses, 3) gross volume in cubic meters by group, duly measured in accordance with these regulations, 4) unit price, 5) total amount paid, 6) number of timber license of supplier, 7) location of timber concession of each log supplier, and 8) the total volume of logs manufactured during the month, thereby showing ending log inventory. This monthly report shall be distributed as follows: a) Original copy Commissioner of Internal Revenue b) Duplicate copy Copy of plant operator c) Triplicate copy Collection Agent in the locality d) Quadruplicate copy Revenue District Officer e) Quintuplicate copy District Forester b) The operators are required to submit within fifteen days after the end of each month a summary report of sales invoices, local sales should be reported separately from export sales, issued during the month, consisting of 1) date of sales, 2) sales invoice numbers, 3) names of buyer, 4) addresses of buyers, 5) amount received, 6) total sq. 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). (c) At the end of the fiscal year, a complete inventory of veneers, plywood and logs shall be taken by the operator and recorded in accordance with the bookkeeping regulations. Likewise, at the closing period of the business, these desired inventories shall also be taken. cdt (d) All sales of veneers and plywood panels shall be duly supported by sales invoices whether or not it partakes in the form of barter for logs, spare parts, gasoline, etc. SECTION 25. Operators of Veneer and Plywood Plants with Timber Licenses . (a) Reports described in Section 24-b, c and d hereof shall be complied with and distributed in the same manner as prescribed therein. (b) Monthly summary reports of logs, veneers and plywood manufactured, sold either locally or exported during each month shall be prepared and distributed in the same manner described in Section 24(a) hereof. PART V Exportation and Reshipment of Forest Products SECTION 26. (a) Exportation of Forest Products . Exporters of forest products shall indicate on the export entry certificate the number and date of official receipt the amount paid for forest charges and other fees, as well as the place of payment. However, forest charges in the form of "prepayment" not based on the logs shown in auxiliary invoice, may be allowed to facilitate issuance of export entry certificate subject to the provisions of Section 12-b(1) of these regulations. (b) Revenue District Officers and/or Revenue Regional Directors, when authorized by the Commissioner of Internal Revenue, may be allowed to sign the export entry certificate if the points of loading and/or shipment are not within the jurisdiction of Revenue Regional Offices of Quezon City, North and South Manila. (c) All exporters of forest products are required to furnish copies of all export papers for each export to the Commissioner of Internal Revenue, the Regional Directors and Revenue District Officers who have jurisdiction over the points of loading. (d) Official Receipts covering payments of forest charges and other fees shall be kept in the main office of the exporter of forest products and should be preserved in accordance with the bookkeeping regulations. (e) Ending inventories of logs intended for export shall be measured in accordance with the mode of measurement prescribed in these regulations. Commercial measurement like that of the "Brereton Scale" is not allowed in taking the log inventories. SECTION 27. Reshipment defined . The term reshipment shall be understood to mean the removal of forest products from the original destination as appearing on the auxiliary invoice. SECTION 28. Reshipment of entire consignment . Persons shipping all forest products listed on one or more auxiliary invoices from their first destination and place of discharge, shall note at the back of the last sheet of each set of auxiliary invoice the following: "The forest products described on this invoice are reshipped on ____________ to _________________ of ____________________. (Date) (Consignee) (Address) ____________________ (Signature of shipper) In case reshipment consists of timber, the Official Receipts evidencing payments of forest charges shall be attached to the accompanying auxiliary invoice. 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. SECTION 29. Reshipment of part of consignment . (a) Except as hereinafter specified, 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 ____________________ to ______________________ (conveyance) (consignee) of ______________________________." (address) ____________________ Signature of shipper (b) Persons shipping forest products under the provisions of the preceding paragraph 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 a part of the forest products manifested in auxiliary invoice No. ________, dated _____ to be shipped per _____________ to ______________ of ______________ (conveyance) (consignee) (address) _______________________________________________________ Pieces/number of : Weight or : : Kind of ___ Packages : measurements : Volume : Products _______________: __________________: __________________: __________________ _______________: __________________: __________________: __________________ _______________: __________________: __________________: __________________ _______________: __________________: __________________: __________________ ______________________ ______________________ (Date) (Signature) (c) 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. PART VI Miscellaneous Provisions SECTION 30. Abandoned, drifted or stranded timber or other forest products . Abandoned, drifted or stranded timber or other forest products, recovered from a stream, waterway, beach, shore or other similar place by any person other than the cutter or gatherer of same, shall be seized by the collection agent or other internal revenue officers. The collection agent shall advertise it at public auction by notices posted at the main entrance of the municipal building of the municipality in which found, and at a conspicuous place in the locality in which the forest products were seized. The said notice shall contain a description of the forest products to be auctioned. If no claimant appears and submits proofs of his claim thereto within thirty days to the collection agent, such forest products shall be sold at public auction, unless the person who recovered the products pays the regular charges and surcharges in accordance with Section 266 of the Tax Code. If such products are claimed by more than one person, the Collection Agent may refer the claimants to the Revenue District Officer for further investigation before referring the claimants to the proper courts. This section applies only to forest products which, from the circumstances of the case may reasonably be supposed to have been cut or gathered in the public forests. Forest products, including uprooted trees, which are stranded on private lands, not claimed within thirty days may be claimed by the owners of such private lands provided that the charges are paid pursuant to Section 266 of the Tax Code. SECTION 31. Timber wastefully left in public forest reported for collection of charges . In accordance with section 1822 of the Administrative Code, the Director of Forestry has instructed all forest officers to report to the collection agent the scale report of forest products wastefully abandoned in public forests by licensees, the forest charges of which have not been paid. Upon receipt of such report, the collection agent concerned may demand the payment of such charges due within thirty (30) days subject to additional 25% surcharge for late payment, as the case may be. If the licensee refuses to pay, the charges due the government shall be considered a priority lien before the renewal of the license, and the collection agent shall recommend the collection as provided under Republic Act No. 5203 by summary remedies provided thereunder. If the licensee desires to remove the forest products wastefully left or abandoned timber, upon which he has paid the charges, he shall number each piece as provided in Section 3 of these regulations and prepare the auxiliary invoice and present the same to the collection agent for verification of the B. F. marking hatchet number duly stamped on each piece of timber by the forestry scaler. The number of official receipt evidencing payment of the charges paid shall be indicated on the auxiliary invoices. Discharge permits shall be issued upon arrival of the forest products at destination, and the distribution of the auxiliary invoice shall be in accordance with those prescribed in these regulations. SECTION 32. Violation of the law and regulation governing forest products . The following violations of the law and regulations regarding forest products shall be promptly acted upon by internal revenue officers: (a) Forest products cut or gathered without license are subject to the regular forest charges and to an additional 300% surcharge for cutting without license and other surcharges depending on the place of apprehension of the forest products as provided under Sections 267 and 273 of the Tax Code. Forest products cut in excess of the allowable cut shall be subject also to additional 300% surcharge for cutting in violation of the terms of the license and such other penalties provided in these regulations except when the Director of Forestry, recommends the waiver thereof. The legitimate timber licensees are required to reconcile their timber manifested with their allowable cut based on the net volume arrived at after deduction defects if there are forest officers assigned to scale the logs, otherwise the allowable cut shall be reconciled by using the gross volume. (b) Wood cut for conversion into charcoal must be of the third and fourth groups, and the unauthorized use of wood of other groups for this purpose will render the offender liable for the payment of the forest charges and the surcharges provided for in these regulations. First and second group woods removed for purposes of firewood, except where such woods are cut with the approval of the Director of Forestry, are subject to the regular forest charges and surcharge for timber of these groups. (c) The illegal use of the so-called "commercial table" referred to in these regulations shall be punished by a fine of not less than P50.00 nor more than P500.00, or by imprisonment of not less than one month but not more than three months, or both, in the discretion of the court. SECTION 33. 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 in the Tax Code, unless the forest products are badly needed by the government either the municipal, provincial, city or national. 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 taxpayers 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. The revenue officer concerned may 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, through the Auditor of the BIR and one copy to the Director of Forestry. SECTION 34. Additional requirements for timber licensees . All holders of timber and minor forest product licenses issued by the Director of Forestry shall furnish copies thereof to the Commissioner of Internal Revenue, Revenue District Officer and the Collection Agent concerned. Permits granting additional cuts in addition to the allowable cuts and/or amendments to the geographical boundaries of each license, shall also be furnished to these revenue officials. Likewise, management logging plans, yearly reports on logging operations which are required of the licensees by the Director of Forestry shall also furnish the Commissioner of Internal Revenue copies thereof. SECTION 35. Special Power of Attorney . All holders of licenses issued by the Bureau of Forestry shall furnish the Collection Agents and Revenue District Officers concerned, as well as the Commissioner of Internal Revenue, the names of their duly authorized agents in the form of "Special Power of Attorney".Copies of the Special Power of Attorney showing the name, address and signature specimen of the agent shall be submitted to the aforesaid officials within thirty days after receipt of the license from the Director of Forestry. SECTION 36. Ledger Cards to be kept by collection agents . All collection agents are required to keep and maintain ledger cards showing the names and address of holders of forest product licenses operating within their jurisdiction, as well as their taxpayer's account numbers, complete data covering payments of forest charges, and surcharges; forestry information fund; forest research and industrial development fund (Forpride Fund);Class A & B or C and C-1 residence tax certificates, as the case may demand, sales tax paid as well as the volume manifested. SECTION 37. Repealing provision Regulations No. 85 of the Department of Finance, rulings and orders or circulars inconsistent and repugnant to the provisions hereof are hereby repealed. SECTION 38. Effective Date These regulations shall become effective upon their promulgation in the Official Gazette. CESAR VIRATA Secretary of Finance Recommended by: MISAEL P. VERA Commissioner of Internal Revenue ANNEX A April 17, 1972 The Honorable The Secretary of Finance Manila S i r : I have the honor of recommend the promulgation of the attached Revenue Regulations No. 3-72 dated April 17, 1972, the subject matter of which is "Internal Revenue Forest Products Regulations". Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue ANNEX B DEPARTMENT OF FINANCE Re: Internal Revenue Forest Products Regulations 1st Indorsement July 28, 1972 Respectfully returned to the Commissioner of Internal Revenue, Manila, the within Revenue Regulations No. 3-72, duly approved. CESAR VIRATA Secretary