Imposition of an Ad Valorem Tax on Matches in lieu of Specific Tax

October 12, 1984 REVENUE REGULATIONS NO. 18-84 SUBJECT : Imposition of an Ad Valorem Tax on Matches in lieu of Specific Tax TO : All Internal Revenue Officers and Others Concerned SECTION 1 . Scope . Pursuant to the provisions of Section 326 in relation to Section 151, Chapter I, Title IV of the National Internal Revenue Code, as amended, the following revenue regulations are hereby promulgated to implement the provisions thereof. SECTION 2 . Words and Phrases Defined . For purposes of these regulations, the following words and phrases shall be taken in the sense and extension indicated below: cd (a) Ad Valorem Tax on Matches shall mean a tax equivalent to a specific percentage of the manufacturer's or importer's gross selling price of matches to be removed from the place of manufacture or to be released from customs custody, which shall be paid by the manufacturer or importer, as the case may be, before such removal; acd (b) Gross Selling or Wholesale Price is the price at which the matches are sold in the factory or in the establishment of the manufacturer or importer or through their sales agent or through another establishment of which the manufacturer or importer is the owner or in the profit of which he has an interest; and (c) Sales Agent is a sales representative of the match manufacturer or importer under an employee-employer relationship or of another establishment of which the manufacturer or importer is the owner or has an interest in the profit thereof. SECTION 3 . Manufacturer's and Importer's Declaration . Every manufacturer or importer of matches shall file with the Commissioner of Internal Revenue on or before the last working day of January of each year and every six (6) months thereafter or as often as may be required by the Commissioner, a sworn statement showing among other information, the brand or brands of matches manufactured, the wholesale price, the cost of manufacture or importation plus expenses incurred until the matches are finally sold. Provided, further , that said sworn statement shall be filed upon registration of any new brand of matches or whenever there is any change in the gross selling or wholesale price of any existing brands of such matches. It shall be unlawful to sell said matches at wholesale at a price in excess of the one specified in the statement required herein without previous written notice to the Commissioner. In case of imported matches, the sworn statement required herein shall be accompanied by verified sales invoices of the importer as well as the consular invoice issued by the Philippine Consul, should one be available at the place of origin or shipment, and that every pack or carton of matches bear the inscription "FOR EXPORT TO THE PHILIPPINES". These information must be submitted by the importer to the Commissioner before the removal of imported matches from customs custody. cd SECTION 4 . Computation of Ad Valorem Tax on Locally Manufactured and Imported Matches . The computation of the ad valorem tax shall be as follows: cdt (a) Determine the gross selling or wholesale price of matches; and (b) On the wholesale price, there shall be levied, assessed and collected the ad valorem tax on matches of ten (10%) per centum . SECTION 5 . Payment of the Ad Valorem Tax . Every Registered manufacturer of matches shall pay before the removal of his product from the place of manufacture, the ad valorem tax due thereon to the Commissioner in cash or in manager's check, thru the "Payment Order" system of tax payment; or for his convenience he may pay in advance in cash or in manager's check to the said Commissioner, thru the "Payment Order" system of tax payment, an amount sufficient to cover the ad valorem tax due on the volume of his daily removals. SECTION 6 . Recording Ad Valorem Tax Payment . A special book shall be kept by the manufacturer jointly with the Revenue Inspector assigned in his factory wherein to record these ad valorem tax payments. Accordingly, the first advance payment by the manufacturer for his tax liability shall constitute as a debit entry in said book from where the ad valorem tax application shall be deducted and shall constitute as a credit entry in the same book. A balance of the advance payment, if any, shall be struck after every such tax application in order to keep a running account of the same. No removals shall be allowed unless the ad valorem tax is first paid thereon or unless there is sufficient balance of ad valorem tax to be applied hereon. In order that a debit entry may be made in the special book prescribed herein to record as advance payment of the ad valorem tax, the manufacturer must show the original of the Payment Order and the banks Confirmation Receipt issued therefor to the Revenue Inspector assigned in his factory who shall sign legibly his name at the back thereof and retaining always a xerox copy of every such Payment Order and Confirmation Receipt for his file and which he will submit weekly to the Chief, Oil & Miscellaneous Tax Division or the Chief, Specific Tax Area Team on the first working day following the week. To confirm ad valorem tax payments or application on every removal of matches, the amount so paid must be indicated in the sales or delivery invoices covering every such removal duly validated by the Revenue Inspector assigned in the factory by affixing his signature in the sales or delivery invoice. He shall prepare an abstract of such sales or delivery invoices the same to be submitted weekly to the Chief, Oil & Miscellaneous Tax Division or the Chief, Specific Tax Area Team on the first working day following the week. acd SECTION 7 . Manner of payment of the ad valorem tax on imported matches . Every importer or owner of imported matches shall pay to the customs officer conformably with the existing regulations of the Ministry of Finance and these regulations, the ad valorem tax thereon before release from customs custody. The importer or owner of the imported matches shall furnish the internal revenue officer assigned to supervise the release thereof with a copy of the official receipt covering the ad valorem tax payment together with other pertinent shipping documents and the same shall be submitted to the Chief, Oil & Miscellaneous Tax Division or Chief, Specific Tax Area Team, together with the report of supervision. SECTION 8 . Limitation on the wholesale price . The manufacturer's or importer's wholesale price of matches subject to the herein ad valorem tax shall in no case be less than the existing or prevailing wholesale price prior to the effectivity of these regulations. SECTION 9 . Verification of tax payment and cost . Periodic verification shall be caused to be made by the Chief, Oil & Miscellaneous Tax Division or Chief, Field Operations Division to insure the accurate and prompt payment by the manufacturer and importer of the ad valorem tax on matches as well as their registered costs. SECTION 10 . Penalties . The penalties and liabilities prescribed under the pertinent provisions of Title IV relative to the payment of specific tax shall likewise apply in the case of ad valorem tax imposed herein. SECTION 11 . Repealing Clause . All regulations, order and other issuances or portions thereof, inconsistent with the provisions of these regulations, are hereby revoked or modified accordingly. casia SECTION 12 . Effectivity . These regulations shall take effect on October 15, 1984. ALFREDO PIO DE RODA Acting Minister of Finance Recommending Approval: RUBEN B. ANCHETA Acting Commissioner