Amendments to Revenue Regulations No. V-39 of the Department of Finance

June 26, 1986 July 1, 1986 REVENUE REGULATIONS NO. 07-86 SUBJECT : Amendments to Revenue Regulations No. V-39 of the Department of Finance TO : All Internal Revenue Officers and Others Concerned Pursuant to the provisions of Section 277 in relation to Section 126 of the National Internal Revenue Code, as amended these regulations are hereby promulgated to amend Section 5 of Revenue Regulations No. V-39 of the Department of Finance prescribing the manner of paying the ad valorem tax on cigarettes, cigars and other products of tobacco and shall read as follows: SEC. 5. Payment of Ad Valorem Tax on Cigarettes, Cigars and Other Products of Tobacco . (a) The payment of ad valorem tax imposed by the National Internal Revenue Code, as amended, upon cigarettes, cigars and other products of tobacco manufactured or produced in the Philippines for sale or consumption therein shall be made before the removal of said articles from the place of manufacture to the Commissioner of Internal Revenue in cash or in manager's/cashier's check, through the "Payment Order" system of tax payments; or for the convenience of the manufacture thereof the same may be paid in advance in cash or in manager's/cashier's check, in amounts sufficient to cover the ad valorem tax due on the volume of daily removals thereof. aisa dc To confirm ad valorem tax payments or applications on every removal of cigarettes, the amount so paid together with the Payment Order and Confirmation Receipt Numbers, must be indicated in the sales or delivery invoice covering every such removal and the Sworn Statement provided in paragraph (b) must be presented to the corresponding BIR representative for authentication before removal. The requirements as to the purchase, cancellation and affixture of internal revenue strip stamps for tobacco products heretofore enforced is hereby cancelled and withdrawn. In case a cigarette manufacturer desires to affix a cigarette paper strip in lieu of the BIR strip stamps on every package of cigarette manufactured, the design of which shall be at his discretion, such paper strip shall be registered with the Bureau by the manufacturer whose application shall be accompanied by at least ten samples thereof as the basis for any comparative analysis arising from any controversy involving the cigarettes in whose package such paper strip is affixed. cd i The Payment Order shall be based on the manufacturer's statement mentioned in paragraph (b) and only the cigarettes covered by said manufacturer's statement and payment order may be removed from the manufacturer's premises. (b) Filing of Manufacturing Sworn Statement . Every manufacturer of cigarettes, cigars and other products of tobacco is required to file with the Commissioner daily, two sworn statements, one showing the quantity of raw materials such as leaf tobacco or partially manufactured tobacco and cigarette paper bobbins received by the factory and the total quantity of such raw materials used during the day's operations; the total quantity produced, according to brands and tax classification; and two, the corresponding quantity removed or sold during the day the corresponding wholesale price thereof and the ad valorem tax payment made thereon. Attached to the second certificate shall be copies of the corresponding invoice of sale to the buyers of the cigarettes so removed indicating name, address and taxpayer's account number. Both sworn statements shall be signed by the owner if it is a single proprietorship, by the President or General Manager or their Attorney-in-fact, if it is a juridical entity and attested and confirmed as true and correct by the manufacturer's internal and/or external auditor. A monthly summary of the herein required Manufacturer's Sworn Statements duly certified by the external auditor of the manufacturer shall be submitted to the Commissioner of Internal Revenue on or before the 10th day of the succeeding month. The criminal liability for any falsity or misdeclaration in the two sworn statements hereinabove provided for shall be the personal responsibility of the owner, president or general manager of the manufacturer concerned and the external auditor in the case of the monthly report. aisa dc In case of cigarettes or cigars manufactured for export, the corresponding tax credit shall be issued upon proof of export and proof receipt of the corresponding foreign exchange. These regulations shall take effect on July 1, 1986. (Sgd.) JAIME V. ONGPIN Secretary of Finance Recommending Approval: (Sgd.) BIENVENIDO A. TAN, JR. Commissioner of Internal Revenue