Amendments to Act No. 2339 (Internal Revenue Law of 1914) Re: Imposition of Increased and Additional Taxes

December 23, 1914

ACT NO. 2432

AN ACT AMENDING ACT NUMBERED TWENTY-THREE HUNDRED AND THIRTY-NINE, THE INTERNAL REVENUE LAW OF NINETEEN HUNDRED AND FOURTEEN, BY IMPOSING INCREASED AND ADDITIONAL TAXES, AND FOR OTHER PURPOSES

SECTION 1. Subsection (i) of section six of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows: cdta

"(i) The condition under which alcohol intended for use in the arts and industries may be withdrawn free of the tax imposed in section fifty-eight hereof, and dealt in, the character and quantity of the denaturing material to be used, the manner in which the process of denaturing shall be affected, the bonds to be given, the books and records to be kept, the entries to be made therein, the reports to be made to the Collector of Internal Revenue, and the signs to be displayed in the business or by the person for whom such denaturing is done or by whom such alcohol is dealt in."

SECTION 2. Section twenty-one of Act Numbered Twenty-three hundred and thirty-nine is hereby amended by adding at the end thereof the following subsection:

"(j) Ad valorem tax on the output of mines."

SECTION 3. Section twenty-nine of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 29. Secondary certificate in lieu of destroyed cedula certificate. — The Collector of Internal Revenue, upon presentation to him of satisfactory proof in the form of an affidavit of the actual destruction or loss of a cedula certificate of accident, fire, or other casualty and without any fraud or negligence on the part of the taxpayer, shall issue gratuitously a secondary certificate showing the number of the original certificate and its date, together with the other information contained therein, which secondary certificate may be used in lieu of the original certificate for all purposes."

SECTION 4. Section thirty-eight of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 38. Liability in general to percentage taxes. — The percentage tax is due from those engaged in the businesses subject thereto when the amount of their receipts or the value of their sales, as the case may be, is two hundred pesos or more a quarter. All such persons are likewise subject to the fixed privilege tax payable in advance, imposed in section forty-five, subsection (p) hereof; but if at the end of the quarter it is found that the amount of a person's receipts or the value of his sales has reached the point which subjects him to the percentage tax, he will be allowed a credit equivalent to one quarter's fixed tax on the percentage tax due from him. In any case the amount of his business must be reported quarterly as required in the next succeeding section."

SECTION 5. The first two paragraphs of section forty of Act Numbered Twenty-three hundred and thirty-nine are hereby amended to read as follows:

"SEC. 40. Percentage tax on merchants' sales. — All merchants not herein specifically exempted shall pay a tax of one per cent on the gross value in money of the commodities, goods, wares, and merchandise sold, bartered, or exchanged by them, such tax to be based on the actual selling price or value at which the things in question are disposed of, whether consisting of raw material or of manufactured or partially manufactured products and whether of domestic or foreign origin.

"Persons engaged in public market places in the sale exclusively of domestic food products at retail, and retail dealers in tuba and its similars and retail leaf tobacco dealers are exempt from this tax."

SECTION 6. Section forty-two of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 42. Percentage tax on printers and publishers. — Printers and publishers shall pay a tax equivalent to one per cent of their gross receipts; but persons engaged in the publication or printing and publication of any newspaper, magazine, review, or bulletin appearing at regular intervals and having fixed prices for subscription and sale shall not be taxed on receipts from sales of, subscription to, or advertisements in such publication; but this exemption shall not apply to any publication the principal purpose of which is the publication of advertisements."

SECTION 7. Section forty-three of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 43. Percentage tax on contractors, warehousemen, and others. — Contractors, warehousemen, proprietors of dockyards, and persons selling light, heat, or power, as well as persons engaged in conducting telephone or telegraph lines, or exchanges, and keepers of hotels and restaurants shall pay a tax equivalent to one per cent of their gross receipts."

SECTION 8. Section forty-four of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 44. Percentage tax on carriers and keepers of stables and garages. — Keepers of livery stables and garages, transportation contractors, persons who transport passengers or freight for hire, and common carriers by land or water, except owners of boats taxed under the laws administered by the Bureau of Customs, shall pay a tax equivalent to one per cent of their gross receipts."

SECTION 9. Subsections (j), (l), (m), (p), (q), and (u) of section forty-five of Act Numbered Twenty-three hundred and thirty-nine are hereby amended to read as follows, and the following new subsection to be known as subsection (bb), is hereby added at the end of said section forty-five:

"(j) Retail dealers in fermented liquors, twenty pesos;

"(l) Tobacco dealers, twelve pesos;

"(m) Retail leaf tobacco dealers, twenty pesos;

"(p) Merchants (except retail dealers in tuba and its similars and in leaf tobacco), common carriers, printers and publishers, contractors, warehousemen, and others subject to the payment of the percentage tax on business, eight pesos;

"(q) Proprietors of cockpits, two hundred pesos; and for each cockfight (soltada), a tax of twenty-five centavos;

"(u) Owners of race tracks, for each day on which races are run on any track, three hundred pesos;

"(bb) Manufacturers of and wholesale dealers in motor spirits, mineral oils, and lubricating oils, eight pesos."

SECTION 10. The fourteenth and-fifteenth paragraphs of section forty-six of Act Numbered Twenty-three hundred and thirty-nine, defining "Wholesale tobacco dealer" and "Retail tobacco dealer," are hereby repealed and the first two paragraphs following are substituted therefor; and said section forty-six is further amended by adding at the end thereof the third paragraph following:

"'Tobacco dealer' comprehends every person who for himself or on commission sells or offers for sale cigars, cigarettes, or manufactured tobacco.

"'Retail leaf tobacco dealer' includes every person who for himself or on commission sells or offers for sale to persons other than registered dealers in leaf tobacco and manufacturers of cigars, cigarettes, or manufactured tobacco, leaf tobacco.

"Planters or producers of leaf tobacco are excepted from this tax with regard to leaf tobacco of their own production.

"'Manufacturer and wholesale dealer in motor spirits and mineral oils' includes all persons who sell any of the articles made subject to the specific tax by section seventy-two (a) of this Act in quantities of four hundred liters or, more at one time, and the manufacturer or importer of such articles."

SECTION 11. Subsections (c) and (e) and the last paragraph of section fifty-three of Act Numbered Twenty-three hundred and thirty-nine are hereby amended to read as follows:

"(c) Pharmacists, opticians, and dental surgeons, forty pesos;

"(e) Procuradores judiciales, agentes de negocios, and insurance agents, forty pesos;

"'Agente de negocios' includes all persons who act as agents of others in the transaction of business with any public officer, as well as those who conduct collecting, advertising, employment, or private detective agencies."

SECTION 12. Paragraph (a) of section fifty-eight of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"(a) If produced from sap of the nipa, coconut, or buri palm, or from the juice, sirup, or sugar of the cane, per proof liter, thirty-five centavos;"

SECTION 13. Section sixty-one of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 61. Exemption in favor of domestic denatured alcohol. — Domestic alcohol of not less than one hundred and eighty degrees proof (Ninety per cent absolute alcohol) may, when denatured, be withdrawn from a registered distillery or bonded warehouse without the payment of the specific tax prescribed in section fifty-eight hereof for the purpose of being used for fuel, light, or power, or for use generally in the arts and industries."

SECTION 14. Section sixty-four of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 64. Specific tax on fermented liquors. — On beer, lager beer, ale, porter, and other fermented liquors (except tuba, bassi, tapuy, and similar domestic fermented liquors) there shall be collected, on each liter of volume capacity, six centavos."

SECTION 15. Section sixty-seven of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 67. Specific tax on products of tobacco. — On manufactured products of tobacco, except cigars, cigarettes, and tobacco specially prepared for chewing so as to be unsuitable for consumption in any other manner, but including all other tobacco twisted by hand or reduced into a condition to be consumed in any manner other than by the ordinary mode of drying and curing; and on all tobacco prepared or partially prepared for sale or consumption, even if prepared without the use of any machine or instrument and without being pressed or sweetened; and on all fine-cut shorts and refuse, scraps, clippings, cuttings, and sweepings of tobacco, there shall be collected, on each kilogram, sixty centavos.

"On tobacco specially prepared for chewing so as to be unsuitable for use in any other manner, on each kilogram, forty-eight centavos."

SECTION 16. Section sixty-nine of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 69. Specific tax on cigars and cigarettes. — On cigars and cigarettes (except handmade cigars and cigarettes prepared by the consumer for his own consumption and so used) there shall be collected the following taxes:

"(a) Cigars, six pesos per thousand;

"(b) Cigarettes;

"1. Weighing not more than two kilograms per thousand, on each thousand, one peso and twenty centavos;

"2. Weighing more than two kilograms per thousand, on each thousand, two pesos."

SECTION 17. Article five of chapter two of Act Numbered Twenty-three hundred and thirty-nine is hereby amended by adding at the end thereof two new sections to be known as sections seventy-two-a and seventy-two-b, to read as follows:

"SEC. 72 a. Specific tax on motor spirits and refined or manufactured mineral oils. — On motor spirits and refined or manufactured mineral oils, there shall be collected the following tax:

"(1) Naphtha, gasoline, and all lighter products of distillation, per liter of volume capacity, four centavos;

"(2) Kerosene or petroleum, per liter of volume capacity, one and one-half centavos;

"(3) Lubricating oils, per liter of volume capacity, four centavos;

"(4) Denatured alcohol, per liter of volume capacity, one and one-half centavos.

"This tax shall apply to articles now manufactured or produced or which may hereafter be manufactured or produced in the Philippine Islands for domestic sale or consumption and to like articles imported from the United States or foreign countries.

"On the date of the taking effect of this section, all manufacturers and wholesale dealers as hereinbefore defined shall make a return to the provincial treasurer of the province in which they are situated, showing the amount of motor spirits and refined or manufactured mineral oils on hand and shall pay thereon the tax prescribed in this section before disposing of same, in the manner prescribed by the Collector of Internal Revenue. No tax shall be collected on such articles which, before the taking effect of this Act, shall have been disposed of to consumers or persons other than manufacturers or wholesale dealers. The Collector of Internal Revenue may exact a bond conditioned upon the payment of these taxes before the removal of said articles from the premises of the manufacturer or wholesale dealer. No tax shall be collected on any of such articles subsequently received by wholesale dealers, upon which the tax has been paid by the previous owner or wholesale dealer. When wholesale dealers shall have paid the tax on all such articles in their possession, they may be relieved from payment of further privilege tax as such if they sell only motor spirits and mineral oils on which the tax has been paid by the previous owner.

"SEC. 72 b. Tax on coal. — On all coal and coke shall be collected, per metric ton, one peso."

SECTION 18. Section one hundred of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 100. Privilege tax on signs, signboards, and billboards. —

"(a) Upon outdoor signs, signboards, and billboards erected, displayed, or maintained in any place exposed to public view shall be paid, by the person so erecting, displaying, or maintaining the same, a privilege tax, to be computed upon superficial area, as follows:

"(1) Upon signs, signboards, and spaces regularly used for temporary signs on buildings used for business purposes, per square meter or fraction thereof, per annum, one peso;

"(2) Upon billboards and upon all signs displayed on premises not occupied by buildings used for business purposes, per square meter or fraction thereof, per annum, two pesos.

"(b) Signs and signboards having a total area of less than one square meter shall be taxed as of one meter.

"(c) Signs or signboards announcing exclusively the name or style, address, and nature of business of a person shall not be subject to this tax if displayed on the premises in which the business of such person is carried on.

"(d) When the tax is prepaid in full for the entire quarter following that in which the sign, signboard, or billboard is erected or displayed, the tax collected for the current quarter shall be prorated on the remaining portion of the current quarter.

"(e) Removal of signs by the Government. — Any sign, signboard, or billboard which shall be erected, displayed, or maintained without the privilege tax thereon having been paid as hereinabove provided shall be removed by the Government at the owner's expense.

"(f) Restrictive provisions. — No sign, signboard, or billboard shall be erected or displayed on public lands, premises, or buildings. If after due investigation and having given the owners an opportunity to be heard the Collector of Internal Revenue shall decide that any sign, signboard, or billboard displayed or exposed to public view is offensive to the sight or is otherwise a nuisance, he may order the removal of such sign, signboard, or billboard, and if same is not removed within ten days after he has issued such order he may himself cause its removal, and the sign, signboard, or billboard shall thereupon be forfeited to the Government, and the expenses incident to the removal of the same shall become a lawful charge against any person or property liable for the privilege tax thereon.

"When a sign, signboard, or billboard removed as herein contemplated shall be found not to conform with the requirements of the regulations of the Bureau relative to signs, signboards, and billboards, no refund shall be allowed for any portion of the year for which the taxes may have been paid; otherwise, the Collector of Internal Revenue may in his discretion make a refund of so much of the annual tax paid as corresponds to the remaining portion of the year.

"An appeal to the Secretary of Finance and Justice may be taken from any order of removal made by the Collector of Internal Revenue in pursuance of this section, and the decision of said Secretary thereon shall be final."

SECTION 19. Chapter two of Act Numbered Twenty-three hundred and thirty-nine is hereby amended by adding at the end thereof the following article:

"ARTICLE X. — Ad valorem tax on output of mines.

"SEC. 100a. Rate and basis of tax on mines. — There shall be levied and collected on the gross output of each mine an ad valorem tax equal to one and one-half per cent of the actual market value of such output. This tax shall not be imposed with respect to valid perfected mining concessions granted prior to April eleventh, eighteen hundred and ninety-nine, until the year nineteen hundred and eighteen.

"SEC. 100b. Time and manner of collection. — All ad valorem taxes on the value of the output of mines shall be assessed and paid before the removal of any such output from the locality where it is mined. But the output of mines may be removed from such locality without the payment of the tax herein imposed, if the owner or concessionaire of the mine shall first file a bond with the Bureau of Internal Revenue in the form and amount and with such sureties as the Collector of Internal Revenue may require, conditioned upon the future payment of said tax at such time and place as the Collector may direct. For the purpose of establishing a uniform basis for the assessment of this tax the Collector of Internal Revenue shall, upon the taking effect of this article, and from time to time thereafter, make an assessment of the actual market value of the various products of the mines in the Philippine Islands subject to the tax herein imposed. Such assessment shall be made from the most reliable data available and shall be published in the Official Gazette for the information of the taxpayers."

SECTION 20. Section one hundred and two of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 102. Sign to be exhibited by distiller or rectifier. — Every person engaged in distilling or rectifying spirits, and every wholesale liquor dealer, shall keep conspicuously on the outside of his place of business a sign exhibiting, in letters not less than six centimeters high, his name or firm style, with the words 'Registered distiller,' 'Rectifier of spirits,' or 'Wholesale liquor dealer,' as the case may be, and his assessment number. Such a sign shall likewise be kept conspicuously on the outside of the place of business of every person engaged in the manufacture or sale at wholesale of motor spirits and mineral oils." cdtech

SECTION 21. Section one hundred and nineteen of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 119. Requirements incident to process of denaturing alcohol. — Where alcohol is withdrawn for denaturing for use in the arts and industries, the process of denaturing shall be effected either on the distillery premises or in a bonded warehouse designated by the Collector of Internal Revenue for denaturing purposes only. To such warehouses alcohol may be transferred under bond and under conditions prescribed in the Bureau of regulations."

SECTION 22. Section one hundred and sixty-nine of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

SEC. 169. Unlawful pursuit of business or occupation. — Any person who carries on the business of a distiller, rectifier, wholesale liquor dealer, retail liquor dealer, manufacturer of tobacco, snuff, cigars, or cigarettes, or dealer in any manufactured product of tobacco, without having paid the privilege tax therefor as required by law, shall, in addition to being liable for the payment of such tax, be punished by a fine in a sum not less than two hundred pesos nor more than two thousand pesos or by imprisonment for a term not exceeding six months, or both, in the discretion of the court.

"And in the case of a distiller or rectifier so offending all distilled spirits and all stills or other apparatus fit or intended for the distillation or rectification of spirits, or for the compounding of liquors, owned by such person, wherever found, and all distilled spirits or wines and personal property found at the distillery or rectifying establishment or in any building, room, yard, or inclosure connected therewith and used with or constituting a part of the premises on which the distilling or rectifying is carried on, and all the right, title and interest of such person in the lot or tract of land on which such distillery or rectifying establishment is situated, and all the right, title and interest therein of every person who knowingly or with negligence has suffered or permitted the business of a distiller or rectifier to be there carried on or has connived at the same, shall be forfeited to the Government, upon legal proceedings.

"Any person who carries on any other business, or pursues any calling for which a fixed privilege tax is imposed without paying such tax as required by law shall in addition to being liable to the payment of such tax, be punished by a fine in a sum not exceeding one thousand pesos or by imprisonment for a term not exceeding six months, or both, in the discretion of the court."

SECTION 23. Chapter five, article two, of Act Numbered Twenty-three hundred and thirty-nine is hereby amended by adding after section one hundred and sixty-nine thereof a new section to be known as section one hundred and sixty-nine-a, which will read as follows:

"SEC. 169a. Failure to make true return of receipts and sales. — Any person who, being required by law to make a return of the amount of his receipts, sales, or business, shall fail or neglect to make such return within the time required, shall be punished by a fine not exceeding two thousand pesos or by imprisonment for a term not exceeding one year, or both, in the discretion of the court.

"And any such person who shall make a false or fraudulent return shall be punished by a fine not exceeding ten thousand pesos or by imprisonment for a term not exceeding two years, or both, in the discretion of the court."

SECTION 24. Section one hundred and seventy-one of Act Numbered Twenty-three hundred and thirty-nine is hereby amended to read as follows:

"SEC. 171. Unlawful use of denatured alcohol. — Any person who, for the purpose of manufacturing any beverage, uses denatured alcohol or alcohol withdrawn from bond for industrial uses, or who knowingly sells any beverage made in whole or in part from such alcohol, or who uses such alcohol for the manufacture of liquid medicinal preparations, or knowingly sells such preparations containing as an ingredient such alcohol, shall on conviction be fined not more than one thousand pesos or be imprisoned for not more than one year, or both.

"Any person who shall unlawfully recover or attempt to recover by redistillation or other process any denatured alcohol or who knowingly uses, sells, conceals, or otherwise disposes of alcohol so recovered or redistilled shall be subject to the same penalty as above provided."

SECTION 25. Chapter five, article two, of Act Numbered Twenty-three hundred and thirty-nine is hereby amended by inserting the following section:

"SEC. 183a. Unlawful removal of mining products. — Any concessionaire, manager, owner, or person in charge of any mining products upon which the ad valorem tax herein imposed is applicable, who unlawfully removes, or who allows or procures the unlawful removal of any such products from the place where mined, upon which said ad valorem tax has not been paid in the time and manner required, and every person who knowingly aids or abets in the removal of such articles as aforesaid or conceals the same after their illegal removal shall for the first offense be punished by a fine of not more than one thousand pesos or imprisonment for not longer than six months, or both, and the products so unlawfully removed shall be forfeited. In case of reincidence the offender under this section shall be punished by imprisonment for not less than one month nor more than two years, and if the offense be committed by the concessionaire, owner, or manager of the mine, or by his connivance, the mining concession and all mining rights in the property, including the machinery and apparatus used in and about the mine, and all the products unlawfully removed shall be forfeited to the Government."

SECTION 26. All increases provided for in this Act of the several taxes established by Act Numbered Twenty-three hundred and thirty-nine, shall be in force and effect only from January first, nineteen hundred and fifteen, to December thirty-first, nineteen hundred and fifteen. casia

Enacted: December 23, 1914