FIFTEENTH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES Third Regular Session

) ) )

CERTIFIED FOR ITS IMMEDIATE ENACTMENT ON NOVEMBER 15, 2012

SENATE
S. NO. 3299 (In substitution of H. No. 5727, taking into consideration S. Nos. 2763, 2764, 2998 and 3249) Prepared by the Committee on Ways and Means with Senators Lacson and Defensor Santiago as authors thereof AN ACT RESTRUCTURING THE EXCISE TAX ON ALCOHOL AND TOBACCO PRODUCTS BY AMENDING SECTIONS 141, 142, 143, 144, 145, 131, 288 AND 289 OF REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED BY REPUBLIC ACT NO. 9334, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

SECTION 1. Section 141 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: SEC. 141. Distilled Spirits. On distilled spirits, SUBJECT TO THE

PROVISIONS OF SECTION 133 OF THIS CODE, AN EXCISE TAX [there] shall be collected[, subject to the provisions of Section 133 of this Code, excise taxes as follows] BASED ON THE FOLLOWING SCHEDULES: EFFECTIVE JANUARY 1, 2013, IN THE AMOUNT OF TWENTY PESOS (P20.00) PER PROOF LITER PLUS FIFTEEN PERCENT (15%) OF THE NET RETAIL PRICE PER PROOF LITER (EXCLUDING THE EXCISE TAX AND THE VALUE ADDED TAX); AND EFFECTIVE JANUARY 1, 2015, IN THE AMOUNT OF TWENTY PESOS (P 20.00) PER PROOF LITER PLUS TWENTY PERCENT (20%) OF THE NET RETAIL PRICE PER PROOF LITER (EXCLUDING THE EXCISE TAX AND THE VALUE ADDED TAX). THE SPECIFIC RATE OF TWENTY PESOS (P20.00) OF THE TAXES IMPOSED UNDER THIS SECTION SHALL BE INCREASED BY FOUR PERCENT (4%) EVERY YEAR THEREAFTER EFFECTIVE JANUARY 1, 2015 THROUGH REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

[(a) If produced from the sap of nipa, coconut, cassava, camote, or buri palm or from the juice, syrup or sugar of the cane, provided such materials are produced commercially in the country where they are processed into distilled spirits, per proof liter, Eleven pesos and sixty-five centavos (P11.65);] [(b) If produced from raw materials other than those enumerated in the preceding paragraph, the tax shall be in accordance with the net retail price per bottle of seven hundred fifty milliliter (750 ml.) volume capacity (excluding the excise tax and the value-added tax) as follows:] [(1) Less than Two hundred and fifty pesos (P250.00) One hundred twenty-six pesos (P126.00), per proof liter;] [(2) Two hundred and fifty pesos (P250.00) up to Six hundred and seventyfive pesos (P675.00) Two hundred fifty-two pesos (P252.00), per proof liter; and] [(3) More than Six hundred and seventy-five pesos (P675.00) Five hundred four pesos (P504.00), per proof liter.] [(c)] Medicinal preparations, flavoring extracts, and all other preparations, except toilet preparations, of which, excluding water, distilled spirits form the chief ingredient, shall be subject to the same tax as such chief ingredient. This tax shall be proportionally increased for any strength of the spirits taxed over proof spirits, and the tax shall attach to this substance as soon as it is in existence as such, whether it be subsequently separated as pure or impure spirits, or transformed into any other substance either in the process of original production or by any subsequent process. Spirits or distilled spirits is the substance known as ethyl alcohol, ethanol or spirits of wine, including all dilutions, purifications and mixtures thereof, from whatever source, by whatever process produced, and shall include whisky, brandy, rum, gin and vodka, and other similar products or mixtures. Proof spirits is liquor containing one-half (1/2) of its volume of alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten thousandths (0.7939) at fifteen degrees centigrade (15C). A proof liter means a liter of proof spirits. Net retail price, [as determined by the Bureau of Internal Revenue through a price survey to be conducted by the Bureau of Internal Revenue itself, or by the

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

National Statistics Office when deputized for the purpose by the Bureau of Internal Revenue,] shall mean the price at which the distilled spirits is sold on retail in at least ten (10) major supermarkets in Metro Manila, excluding the amount intended to cover the applicable excise tax and the value-added tax. For [brands] DISTILLED SPIRITS which are marketed outside Metro Manila, the net retail price shall mean the price at which the distilled spirits is sold in at least five (5) major supermarkets in the region excluding the amount intended to cover the applicable excise tax and the value-added tax. MAJOR SUPERMARKETS, AS CONTEMPLATED UNDER THIS ACT, SHALL BE THOSE WITH THE THREE HIGHEST TOTAL GROSS SALES IN METRO MANILA OR THE REGION, AS THE CASE MAY BE, AS DETERMINED BY THE NATIONAL STATISTICS OFFICE, AND SHALL EXCLUDE RETAIL OUTLETS OR KIOSKS, CONVENIENCE OR SARI-SARI STORES, AND OTHERS OF A SIMILAR NATURE. THE NET RETAIL PRICE SHALL BE DETERMINED BY THE BUREAU OF INTERNAL REVENUE (BIR) THROUGH A PRICE SURVEY UNDER OATH. [Variants of existing brands and variants of new brands which are introduced in the domestic market after the effectivity of this Act shall be taxed under the proper classification thereof based on their suggested net retail price: Provided, however, That such classification shall not, in any case, be lower than the highest classification of any variant of that brand.] [A variant of a brand shall refer to a brand on which a modifier is prefixed and/or suffixed to the root name of the brand.] [New brands, as defined in the immediately following paragraph, shall initially be classified according to their suggested net retail price.] [Willful u]Understatement of the suggested net retail price by as much as fifteen percent (15%) of the actual net retail price shall render the manufacturer liable for additional excise tax equivalent to the tax due and difference between the understated suggested net retail price and the actual net retail price. [New brand shall mean a brand registered after the date of effectivity of R. A. No. 8240.]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

DISTILLED SPIRITS INTRODUCED IN THE DOMESTIC MARKET AFTER THE EFFECTIVITY OF THIS ACT SHALL BE INITIALLY TAXED ACCORDING TO THEIR SUGGESTED NET RETAIL PRICES. Suggested net retail price shall mean the net retail price at which [new brands, as defined above, of] locally manufactured or imported distilled spirits are intended by the manufacturer or importer to be sold on retail in major supermarkets or retail outlets in Metro Manila for those marketed nationwide, and in other regions, for those with regional markets. At the end of three (3) months from the product launch, the Bureau of Internal Revenue shall validate the suggested net retail price of the new brand against the net retail price as defined herein and determine the correct tax bracket to which a [particular new brand of] NEWLY INTRODUCED distilled spirits[, as defined above,] shall be classified. After the end of eighteen (18) months from such validation, the Bureau of Internal Revenue shall revalidate the initially validated net retail price against the net retail price as of the time of revalidation in order to finally determine the correct EXCISE tax [bracket which] ON a [particular new brand of] NEWLY INTRODUCED distilled spirits.[ shall be classified. : Provided, however, That brands of distilled spirits introduced in the domestic market between January 1, 1997 and December 31, 2003 shall remain in the classification under which the Bureau of Internal Revenue has determined them to belong as of December 31, 2003. Such classification of new brands and brands introduced between January 1, 1997 and December 31, 2003 shall not be revised except by an act of Congress.] [The rates of tax imposed under this Section shall be increased by eight percent (8%) every two years starting on January 1, 2007 until January 1, 2011. ] [Any downward reclassification of present categories, for tax purposes, of existing brands of distilled spirits duly registered at the time of the effectivity of this Act which will reduce the tax imposed herein, or the payment thereof, shall be prohibited.] [The classification of each brand of distilled spirits based on the average net retail price as of October 1, 1996, as set forth in Annex A, including the classification of brands for the same products which, although not set forth in said Annex A, were registered and were being commercially produced and marketed

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

on or after October 1, 1996, and which continue to be commercially produced and marketed after the effectivity of this Act, shall remain in force until revised by Congress.] THE TAX ON DISTILLED SPIRITS, WHETHER REGISTERED BEFORE OR AFTER THE EFFECTIVITY OF THIS ACT, SHALL BE DETERMINED EVERY TWO YEARS FROM THE DATE OF EFFECTIVITY OF THIS ACT. ALL DISTILLED SPIRITS EXISTING IN THE MARKET AT THE TIME OF THE EFFECTIVITY OF THIS ACT SHALL BE TAXED ACCORDING TO THE TAX RATES PROVIDED ABOVE BASED ON THE LATEST PRICE SURVEY OF THE DISTILLED SPIRITS CONDUCTED BY THE BUREAU OF INTERNAL REVENUE. THE METHODOLOGY AND ALL PERTINENT DOCUMENTS USED IN THE CONDUCT OF THE LATEST PRICE SURVEY SHALL BE SUBMITTED TO THE CONGRESSIONAL OVERSIGHT COMMITTEE CREATED UNDER R.A. NO. 8240. Manufacturers and importers of distilled spirits shall, within thirty (30) days from the effectivity of this Act, and within the first five (5) days of every third month thereafter, submit to the Commissioner a sworn statement of the volume of sales for each particular brand of distilled spirits sold at his establishment for the three-month period immediately preceding. Any manufacturer or importer who, in violation of this Section, [knowingly] misdeclares or misrepresents in his or its sworn statement herein required any pertinent data or information shall, upon final findings by the Commissioner that the violation was committed, be penalized by a summary cancellation or withdrawal of his or its permit to engage in business as manufacturer or importer of distilled spirits. Any corporation, association or partnership liable for any of the acts or omissions in violation of this Section shall be fined treble the amount of deficiency taxes, surcharges and interest which may be assessed pursuant to this Section. Any person liable for any of the acts or omissions prohibited under this Section shall be criminally liable and penalized under Section 254 of this Code. Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

If the offender is not a citizen of the Philippines, he shall be deported immediately after serving the sentence, without further proceedings for deportation. SEC. 2. Section 142 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: SEC. 142. Wines. On wines, there shall be collected per liter of volume capacity EFFECTIVE JANUARY 1, 2013, the following EXCISE taxes: (a) Sparkling wines/champagnes regardless of proof, if the net retail price per bottle OF SEVEN HUNDRED FIFTY MILLILITER (750 ML.) VOLUME CAPACITY (excluding the excise tax and the value-added tax) is: (1) Five hundred pesos (P500.00) or less [One hundred forty-five pesos and sixty centavos (P145.60)] TWO HUNDRED FIFTY PESOS (P250.00); and (2) More than Five hundred pesos (P500.00) [Four hundred thirty-six pesos and eighty centavos (P436.80)] SEVEN HUNDRED PESOS (P700.00). (b) Still wines AND CARBONATED WINES containing fourteen percent (14%) of alcohol by volume or less, [Seventeen pesos and forty-seven centavos (P17.47)] THIRTY PESOS (P30.00); and (c) Still wines AND CARBONATED WINES containing more than fourteen percent (14%) but not more than twenty-five percent (25%) of alcohol by volume, [Thirty-four pesos and ninety-four centavos (P34.94)] SIXTY PESOS (P60.00). THE RATES OF TAX IMPOSED UNDER THIS SECTION SHALL BE INCREASED BY FOUR PERCENT (4%) EVERY YEAR THEREAFTER EFFECTIVE JANUARY 1, 2014 THROUGH REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE. Fortified wines containing more than twenty-five percent (25%) of alcohol by volume shall be taxed as distilled spirits. Fortified wines shall mean natural wines to which distilled spirits are added to increase their alcohol strength. Net retail price, [as determined by the Bureau of Internal Revenue through a price survey to be conducted by the Bureau of Internal Revenue itself, or by the National Statistics Office when deputized for the purpose by the Bureau of Internal Revenue,] shall mean the price at which SPARKLING wine/CHAMPAGNE is sold on retail in at least ten (10) major supermarkets in Metro Manila, excluding the amount intended to cover the applicable excise tax and the value-added tax. For

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

[brands] SPARKLING WINES/CHAMPAGNES which are marketed outside Metro Manila, the net retail price shall mean the price at which the [wine is] SPARKLING WINES/CHAMPAGNES ARE sold in at least five (5) major supermarkets in the region excluding the amount intended to cover the applicable excise tax and the value-added tax. MAJOR SUPERMARKETS, AS CONTEMPLATED UNDER THIS ACT, SHALL BE THOSE WITH THE THREE HIGHEST TOTAL GROSS SALES IN METRO MANILA OR THE REGION, AS THE CASE MAY BE, AS DETERMINED BY THE NATIONAL STATISTICS OFFICE, AND SHALL EXCLUDE RETAIL OUTLETS OR KIOSKS, CONVENIENCE OR SARI-SARI STORES, AND OTHERS OF A SIMILAR NATURE. THE NET RETAIL PRICE SHALL BE DETERMINED BY THE BUREAU OF INTERNAL REVENUE (BIR) THROUGH A PRICE SURVEY UNDER OATH. [Variants of existing brands and variants of new brands which are introduced in the domestic market after the effectivity of this Act shall be taxed under the proper classification thereof based on their suggested net retail price: Provided, however, That such classification shall not, in any case, be lower than the highest classification of any variant of that brand.] [A variant of a brand shall refer to a brand on which a modifier is prefixed and/or suffixed to the root name of the brand.] [New brands, as defined in the immediately following paragraph, shall initially be classified according to their suggested net retail price.] UNDERSTATEMENT OF THE SUGGESTED NET RETAIL PRICE BY AS MUCH AS FIFTEEN PERCENT (15%) OF THE ACTUAL NET RETAIL PRICE SHALL RENDER THE MANUFACTURER LIABLE FOR ADDITIONAL EXCISE TAX EQUIVALENT TO THE TAX DUE AND DIFFERENCE BETWEEN THE UNDERSTATED SUGGESTED NET RETAIL PRICE AND THE ACTUAL NET RETAIL PRICE. [New brand shall mean a brand registered after the date of effectivity of R. A. No. 8240.] SPARKLING WINES/CHAMPAGNES INTRODUCED IN THE DOMESTIC MARKET AFTER THE EFFECTIVITY OF THIS ACT SHALL BE INITIALLY TAX CLASSIFIED ACCORDING TO THEIR SUGGESTED NET RETAIL PRICES.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Suggested net retail price shall mean the net retail price at which [new brands, as defined above, of] locally manufactured or imported SPARKLING wines/CHAMPAGNES are intended by the manufacturer or importer to be sold on retail in major supermarkets or retail outlets in Metro Manila for those marketed nationwide, and in other regions, for those with regional markets. At the end of three (3) months from the product launch, the Bureau of Internal Revenue shall validate the suggested net retail price of the [new brand] SPARKLING WINE/CHAMPAGNE against the net retail price as defined herein and determine the correct tax bracket to which a [particular new brand of wine, as defined above,] NEWLY INTRODUCED SPARKLING WINE/CHAMPAGNE shall be classified. After the end of eighteen (18) months from such validation, the Bureau of Internal Revenue shall revalidate the initially validated net retail price against the net retail price as of the time of revalidation in order to finally determine the correct tax bracket which a [particular new brand of] NEWLY INTRODUCED SPARKLING wine[s]/CHAMPAGNE shall be classified.[: Provided, however, That brands of wines introduced in the domestic market between January 1, 1997 and December 31, 2003 shall remain in the classification under which the Bureau of Internal Revenue has determined them to belong as of December 31, 2003. Such

classification of new brands and brands introduced between January 1, 1997 and December 31, 2003 shall not be revised except by any act of Congress.] [The rates of tax imposed under this Section shall be increased by eight percent (8%) every two years starting on January 1, 2007 until January 1, 2011.] [Any downward reclassification of present categories, for tax purposes, of existing brands of wines duly registered at the time of the effectivity of this Act which will reduce the tax imposed herein, or the payment thereof, shall be prohibited.] [The classification of each brand of wines based on the average net retail price as of October 1, 1996, as set forth in Annex B, including the classification of brands for the same products which, although not set forth in said Annex B, were registered and were being commercially produced and marketed on or after October 1, 1996, and which continue to be commercially produced and marketed after the effectivity of this Act, shall remain in force until revised by Congress. ]

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

THE PROPER TAX CLASSIFICATION OF SPARKLING WINES/CHAMPAGNES, WHETHER REGISTERED BEFORE OR AFTER THE EFFECTIVITY OF THIS ACT, SHALL BE DETERMINED EVERY TWO YEARS FROM THE DATE OF EFFECTIVITY OF THIS ACT. ALL WINES EXISTING IN THE MARKET AT THE TIME OF THE EFFECTIVITY OF THIS ACT SHALL BE CLASSIFIED ACCORDING TO THE NET RETAIL PRICES AND THE TAX RATES PROVIDED ABOVE BASED ON THE LATEST PRICE SURVEY OF THE WINES CONDUCTED BY THE BUREAU OF INTERNAL REVENUE. THE METHODOLOGY AND ALL PERTINENT DOCUMENTS USED IN THE CONDUCT OF THE LATEST PRICE SURVEY SHALL BE SUBMITTED TO THE CONGRESSIONAL OVERSIGHT COMMITTEE CREATED UNDER R.A. NO. 8240. Manufacturers and importers of wines shall, within thirty (30) days from the effectivity of this Act, and within the first five (5) days of every month thereafter, submit to the Commissioner a sworn statement of the volume of sales for each particular brand of wines sold at his establishment for the three-month period immediately preceding. Any manufacturer or importer who, in violation of this Sect ion, [knowingly] misdeclares or misrepresents in his or its sworn statement herein required any pertinent data or information shall, upon [discovery] FINAL FINDINGS BY THE COMMISSIONER THAT THE VIOLATION WAS COMMITTED, be penalized by a summary cancellation or withdrawal of his or its permit to engage in business as manufacturer or importer of wines. Any corporation, association or partnership liable for any of the acts or omissions in violation of this Section shall be fined treble the amount of deficiency taxes, surcharges and interest which may be assessed pursuant to this Section. Any person liable for any of the acts or omissions prohibited under this Section shall be criminally liable and penalized under Section 254 of this Code. Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal. If the offender is not a citizen of the Philippines, he shall be deported immediately after serving the sentence, without further proceedings for deportation.

10

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

SEC. 3. Section 143 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: SEC. 143. Fermented Liquors. There shall be levied, assessed and

collected an excise tax on beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar fermented liquors in accordance with the following schedule: (a) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity is [less than Fourteen pesos and fifty centavos (P14.50)] TWENTY TWO PESOS (P22.00) OR LESS, the tax shall be [Eight pesos and twenty-seven centavos (P8.27)] TWENTY PESOS (P 20.00) per liter; (b) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity [is Fourteen pesos and fifty centavos (P14.50) up to] IS MORE THAN Twenty-two pesos (P22.00), the tax shall be [Twelve pesos and thirty centavos (P12.30)] TWENTY FIVE PESOS (P 25.00) per liter; [(c) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume capacity is more than Twenty-two pesos (P22.00), the tax shall be Sixteen pesos and thirty-three centavos (P16.33) per liter.] [Variants of existing brands and variants of new brands which are introduced in the domestic market after the effectivity of this Act shall be taxed under the proper classification thereof based on their suggested net retail price: Provided, however, That such classification shall not, in any case, be lower than the highest classification of any variant of that brand.] [A variant of a brand shall refer to a brand on which a modifier is prefixed and/or suffixed to the root name of the brand.] FERMENTED LIQUORS WHICH ARE BREWED AND SOLD AT MICROBREWERIES OR SMALL ESTABLISHMENTS SUCH AS PUBS AND RESTAURANTS SHALL BE SUBJECT TO THE RATE OF TWENTY-EIGHT PESOS (P28.00) PER LITER EFFECTIVE JANUARY 1, 2013. THE RATES OF TAX IMPOSED UNDER THIS SECTION SHALL BE INCREASED BY FOUR PERCENT (4%) EVERY YEAR THEREAFTER EFFECTIVE JANUARY 1, 2014 THROUGH REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE. HOWEVER, IN CASE OF FERMENTED LIQUORS AFFECTED BY THE NO

11

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

DOWNWARD RECLASSIFICATION

PROVISIONS PRESCRIBED

UNDER THIS

SECTION, THE FOUR PERCENT (4%) INCREASE SHALL APPLY TO THEIR RESPECTIVE APPLICABLE TAX RATES. FERMENTED LIQUORS INTRODUCED IN THE DOMESTIC MARKET AFTER THE EFFECTIVITY OF THIS ACT SHALL BE INITIALLY TAX CLASSIFIED ACCORDING TO THEIR SUGGESTED NET RETAIL PRICES. [Fermented liquors which are brewed and sold at micro-breweries or small establishments such as pubs and restaurants shall be subject to the rate in paragraph (c) hereof.] [New brands, as defined in the immediately following paragraph , shall initially be classified according to their suggested net retail price.] UNDERSTATEMENT OF THE SUGGESTED NET RETAIL PRICE BY AS MUCH AS FIFTEEN PERCENT (15%) OF THE ACTUAL NET RETAIL PRICE SHALL RENDER THE MANUFACTURER LIABLE FOR ADDITIONAL EXCISE TAX EQUIVALENT TO THE TAX DUE AND DIFFERENCE BETWEEN THE UNDERSTATED SUGGESTED NET RETAIL PRICE AND THE ACTUAL NET RETAIL PRICE. [New brand shall mean a brand registered after the date of effectivity of R. A. No. 8240.] Suggested net retail price shall mean the net retail price at which [new brands, as defined above, of] locally manufactured or imported fermented liquor are intended by the manufacturer or importer to be sold on retail in major supermarkets or retail outlets in Metro Manila for those marketed nationwide, and in other regions, for those with regional markets. At the end of three (3) months from the product launch, the Bureau of Internal Revenue shall validate the suggested net retail price of the [new brand] NEWLY INTRODUCED FERMENTED LIQUOR against the net retail price as defined herein and determine the correct tax bracket to which a [particular new brand of] NEWLY INTRODUCED fermented liquor, as defined above, shall be classified. After the end of eighteen (18) months from such validation, the Bureau of Internal Revenue shall revalidate the initially validated net retail price against the net retail price as of the time of revalidation in order to finally determine the correct tax bracket which a [particular new brand of] NEWLY INTRODUCED fermented liquor[s] shall be classified.[: Provided,

12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

however, That brands of fermented liquors introduced in the domestic market between January 1, 1997 and December 31, 2003 shall remain in the classification under which the Bureau of Internal Revenue has determined them to belong as of December 31, 2003. Such classification of new brands and brands introduced between January 1, 1997 and December 31, 2003 shall not be revised except by an act of Congress.] Net retail price, [as determined by the Bureau of Internal Revenue through a price survey to be conducted by the Bureau of Internal Revenue itself, or the National Statistics Office when deputized for the purpose by the Bureau of Internal Revenue,] shall mean the price at which the fermented liquor is sold on retail in at least TEN (10) [twenty (20)] major supermarkets in Metro Manila (for brands of fermented liquor marketed nationally), excluding the amount intended to cover the applicable excise tax and the value-added tax. For brands which are marketed outside Metro Manila, the net retail price shall mean the price at which the fermented liquor is sold in at least five (5) major supermarkets in the region excluding the amount intended to cover the applicable excise tax and the valueadded tax. MAJOR SUPERMARKETS, AS CONTEMPLATED UNDER THIS ACT, SHALL BE THOSE WITH THE THREE HIGHEST TOTAL GROSS SALES IN METRO MANILA OR THE REGION, AS THE CASE MAY BE, AS DETERMINED BY THE NATIONAL STATISTICS OFFICE, AND SHALL EXCLUDE RETAIL OUTLETS OR KIOSKS, CONVENIENCE OR SARI-SARI STORES, AND OTHERS OF A SIMILAR NATURE. THE NET RETAIL PRICE SHALL BE DETERMINED BY THE BUREAU OF INTERNAL REVENUE (BIR) THROUGH A PRICE SURVEY UNDER OATH. [The classification of each brand of fermented liquor based on its average net retail price as of October 1, 1996, as set forth in Annex C, including the classification of brands for the same products which, although not set forth in said Annex C, were registered and were being commercially produ ced and marketed on or after October 1, 1996, and which continue to be commercially produced and marketed after the effectivity of this Act, shall remain in force until revised by Congress.]

13

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

[The rates of tax imposed under this Section shall be increased by eight percent (8%) every two years starting on January 1, 2007 until January 1, 2011. ] Any downward reclassification of present categories, for tax purposes, [of existing brands] of fermented liquorS duly registered at the time of the effectivity of this Act which will reduce the tax imposed herein, or the payment thereof, shall be prohibited. THE PROPER TAX CLASSIFICATION OF FERMENTED LIQUORS, WHETHER REGISTERED BEFORE OR AFTER THE EFFECTIVITY OF THIS ACT, SHALL BE DETERMINED EVERY TWO YEARS FROM THE DATE OF EFFECTIVITY OF THIS ACT. ALL FERMENTED LIQUORS EXISTING IN THE MARKET AT THE TIME OF THE EFFECTIVITY OF THIS ACT SHALL BE CLASSIFIED ACCORDING TO THE NET RETAIL PRICES AND THE TAX RATES PROVIDED ABOVE BASED ON THE LATEST PRICE SURVEY OF THE FERMENTED LIQUORS CONDUCTED BY THE BUREAU OF INTERNAL REVENUE. THE METHODOLOGY AND ALL PERTINENT DOCUMENTS USED IN THE CONDUCT OF THE LATEST PRICE SURVEY SHALL BE SUBMITTED TO THE CONGRESSIONAL OVERSIGHT COMMITTEE CREATED UNDER R.A. NO. 8240. Every brewer or importer of fermented liquor shall, within thirty (30) days from the effectivity of this Act, and within the first five (5) days of every month thereafter, submit to the Commissioner a sworn statement of the volume of sales for each particular brand of fermented liquor sold at his establishment for the three-month period immediately preceding. Any brewer or importer who, in violation of this Section, [knowingly] misdeclares or misrepresents in his or its sworn statement herein required any pertinent data or information shall, UPON FINAL FINDINGS BY THE COMMISSIONER THAT THE VIOLATION WAS COMMITTED, be penalized by a summary cancellation or withdrawal of his or its permit to engage in business as brewer or importer of fermented liquor. Any corporation, association or partnership liable for any of the acts or omissions in violation of this Section shall be fined treble the amount of deficiency taxes, surcharges and interest which may be assessed pursuant to this Section.

14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Any person liable for any of the acts or omissions prohibited under this Section shall be criminally liable and penalized under Section 254 of this Code. Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal. If the offender is not a citizen of the Philippines, he shall be deported immediately after serving the sentence, without further proceedings for deportation. SEC. 4. Section 144 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: SEC. 144. Tobacco Products. There shall be collected [a] AN EXCISE tax of [One peso (P1.00)] ONE PESO AND SEVENTY-FIVE CENTAVOS (P1.75) on each kilogram of the following products of tobacco: (a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other than the ordinary mode of drying and curing; (b) Tobacco prepared or partially prepared with or without the use of any machine or instruments or without being pressed or sweetened except as otherwise provided hereunder; and (c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco except as otherwise provided hereunder. Stemmed leaf tobacco, tobacco prepared or par tially prepared with or without the use of any machine or instrument or without being pressed or sweetened, fine-cut shorts and refuse, scraps, clippings, cuttings, stems, midribs, and sweepings of tobacco resulting from the handling or stripping of whole leaf tobacco shall be transferred, disposed of, or otherwise sold, without any prepayment of the excise tax herein provided for, if the same are to be exported or to be used in the manufacture of cigars, cigarettes, or other tobacco products on which the excise tax will eventually be paid on the finished product, under such conditions as may be prescribed in the rules and regulations promulgated by the Secretary of Finance, upon recommendation of the Commissioner. On tobacco specially prepared for chewing so as to be unsuitable for use in any other manner, on each kilogram, [Seventy-nine centavos (P0.79)] ONE PESO AND FIFTY CENTAVOS (P1.50).

15

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

[The rates of tax imposed under this Section shall be increased by six percent (6%) every two years starting on January 1, 2007 until January 1, 2011.] THE RATES OF TAX IMPOSED UNDER THIS SECTION SHALL BE INCREASED BY FOUR PERCENT (4%) EVERY YEAR THEREAFTER EFFECTIVE JANUARY 1, 2014 THROUGH REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE. NO TOBACCO PRODUCTS MANUFACTURED IN THE PHILIPPINES AND PRODUCED FOR EXPORT SHALL BE REMOVED FROM THEIR PLACE OF MANUFACTURE OR EXPORTED WITHOUT PAYMENT OF AN EXPORT BOND: PROVIDED, HOWEVER, THAT TOBACCO PRODUCTS FOR EXPORT MAY BE TRANSFERRED FROM THE PLACE OF MANUFACTURE TO A BONDED FACILITY, UNDER PAYMENT OF A TRANSFER BOND, PRIOR TO EXPORT. Manufacturers and importers of tobacco products shall, within thirty (30) days from the effectivity of this Act, and within the first five (5) days of every month thereafter, submit to the Commissioner a sworn statement of the volume of sales for each particular brand of tobacco products sold [at their establishment] for the three-month period immediately preceding. Any manufacturer or importer who, in violation of this Section, [knowingly] misdeclares or misrepresents in his or its sworn statement herein required any pertinent data or information shall, upon [discovery] FINAL FINDINGS BY THE COMMISSIONER THAT THE VIOLATION WAS COMMITTED, be penalized by a summary cancellation or withdrawal of his or its permit to engage in business as manufacturer or importer of cigars or cigarettes. Any corporation, association or partnership liable for any of the acts or omissions in violation of this Section shall be fined treble the amount of deficiency taxes, surcharges and interest which may be assessed pursuant to this Section. Any person liable for any of the acts or omissions prohibited under this Section shall be criminally liable and penalized under Section 254 of this Code. Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal. If the offender is not a citizen of the Philippines, he shall be deported immediately after serving the sentence, without further proceedings for deportation.

16

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

SEC. 5. Section 145 of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: SEC. 145. Cigars and Cigarettes. (A) Cigars. There shall be levied, assessed and collected on cigars an ad valorem EXCISE tax based on the net retail price per cigar (excluding the excise tax and the value-added tax) in accordance with the following schedule EFFECTIVE JANUARY 1, 2013: (1) If the net retail price per cigar is Five hundred pesos (P500.00) or less[,] TWENTY PERCENT (20%) [ten percent (10%)]; and (2) If the net retail price per cigar [(excluding the excise tax and the valueadded tax)] is more than Five hundred pesos (P500.00)[,] ONE HUNDRED PESOS (P100.00) [Fifty pesos (P50.00)] plus TWENTY-FIVE PERCENT (25%) [fifteen percent (15%)] of the net retail price in excess of Five hundred pesos (P500.00). THE RECLASSIFICATION OF EXISTING CIGARS SHALL BE BASED ON THE LATEST PRICE SURVEY OF CIGARS CONDUCTED BY THE BUREAU OF INTERNAL REVENUE: PROVIDED, THAT NEWLY INTRODUCED CIGARS OR THOSE

INTRODUCED IN THE MARKET AFTER THE EFFECTIVITY OF THE NEW EXCISE TAX SCHEDULE SHALL BE INITIALLY CLASSIFIED ACCORDING TO THEIR SUGGESTED NET RETAIL PRICE. THE METHODOLOGY AND ALL PERTINENT DOCUMENTS USED IN THE CONDUCT OF THE LATEST PRICE SURVEY SHALL BE SUBMITTED TO THE CONGRESSIONAL OVERSIGHT COMMITTEE CREATED UNDER R.A. NO. 8240. (B) Cigarettes Packed by Hand. There shall be levied, assessed and collected on cigarettes packed by hand [a] AN EXCISE tax BASED ON THE FOLLOWING SCHEDULES: [at the rates prescribed below:] EFFECTIVE JANUARY 1, 2013, TWELVE PESOS (P12.00) PER PACK; EFFECTIVE JANUARY 1, 2014, FIFTEEN PESOS (P15.00) PER PACK; EFFECTIVE JANUARY 1, 2015, EIGHTEEN PESOS (P18.00) PER PACK; EFFECTIVE JANUARY 1, 2016, TWENTY-ONE PESOS (P21.00) PER PACK; AND EFFECTIVE JANUARY 1, 2017, TWENTY-SIX PESOS (P26.00) PER PACK. THE RATE OF TAX IMPOSED UNDER THIS SUBSECTION SHALL BE INCREASED BY FOUR PERCENT (4%) EVERY YEAR THEREAFTER EFFECTIVE

17

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

JANUARY 1, 2018 THROUGH REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE. [Effective on January 1, 2005, Two pesos (P2.00) per pack;] [Effective on January 1, 2007, Two pesos and twenty-three centavos (P2.23) per pack;] [Effective on January 1, 2009, Two pesos and forty-seven centavos (P2.47) per pack; and] [Effective on January 1, 2011, Two pesos and seventy-two centavos (P2.72) per pack.] Duly registered [or existing brands of] cigarettes [or new brands thereof] packed by hand shall only be packed in [thirties] TWENTIES AND NO OTHER PACKAGING COMBINATIONS. CIGARETTE PACKED BY HAND SHALL REFER TO THE MANNER OF

PACKAGING OF CIGARETTE STICKS USING INDIVIDUAL PERSONS HANDS AND NOT THROUGH ANY OTHER MEANS SUCH AS MECHANICAL DEVICE, MACHINE OR EQUIPMENT. (C) Cigarettes Packed by Machine. [There] ON CIGARETTES PACKED BY MACHINE, AN EXCISE TAX shall be [levied, assessed and] collected IN ACCORDANCE WITH THE FOLLOWING SCHEDULES [on cigarettes packed by machine a tax at the rates prescribed below]: (1) THOSE ON WHICH AN EXCISE TAX OF LESS THAN SEVEN PESOS AND FIFTY SIX CENTAVOS (P7.56) IS COLLECTED IN 2012 EFFECTIVE JANUARY 1, 2013, TWELVE PESOS (P12.00) PER PACK; EFFECTIVE JANUARY 1, 2014, FIFTEEN PESOS (P15.00) PER PACK; EFFECTIVE JANUARY 1, 2015, EIGHTEEN PESOS (P18.00) PER PACK; EFFECTIVE JANUARY 1, 2016, TWENTY ONE PESOS (P21.00) PER PACK; AND EFFECTIVE JANUARY 1, 2017, TWENTY-SIX PESOS (P26.00) PER PACK. (2) THOSE ON WHICH AN EXCISE TAX OF SEVEN PESOS AND FIFTY-SIX CENTAVOS (P7.56) BUT LESS THAN TWELVE PESOS (P12.00) IS COLLECTED IN 2012 EFFECTIVE JANUARY 1, 2013, SIXTEEN PESOS (P16.00) PER PACK;

18

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

EFFECTIVE JANUARY 1, 2014, EIGHTEEN PESOS (P18.00) PER PACK; EFFECTIVE JANUARY 1, 2015, TWENTY-TWO PESOS (P22.00) PER PACK; EFFECTIVE JANUARY 1, 2016, TWENTY-FOUR PESOS (P24.00) PER PACK; AND EFFECTIVE JANUARY 1, 2017, TWENTY-SIX PESOS (P26.00) PER PACK. (3) THOSE ON WHICH AN EXCISE TAX OF TWELVE PESOS (P12.00) OR MORE IS COLLECTED IN 2012 EFFECTIVE JANUARY 1, 2013, TWENTY PESOS (P20.00) PER PACK; EFFECTIVE JANUARY 1, 2014, TWENTY ONE PESOS (P21.00) PER PACK; EFFECTIVE JANUARY 1, 2015, TWENTY TWO PESOS (P22.00) PER PACK; EFFECTIVE JANUARY 1, 2016, TWENTY FOUR PESOS (P24.00) PER PACK; AND EFFECTIVE JANUARY 1, 2017, TWENTY SIX PESOS (P26.00) PER PACK. THE RATES OF TAX IMPOSED UNDER THE PRECEDING PARAGRAPH OF THIS SUBSECTION SHALL BE INCREASED BY FOUR PERCENT (4%) EVERY YEAR THEREAFTER EFFECTIVE JANUARY 1, 2018 THROUGH REVENUE REGULATIONS ISSUED BY THE SECRETARY OF FINANCE. HOWEVER, IN CASE OF CIGARETTES AFFECTED BY THE NO DOWNWARD RECLASSIFICATION PROVISIONS

PRESCRIBED UNDER THIS SECTION, THE FOUR PERCENT (4%) INCREASE SHALL APPLY TO THEIR RESPECTIVE APPLICABLE TAX RATES. Duly registered or existing brands of cigarettes or new brands thereof packed by machine shall only be packed in twenties. Any downward reclassification of present categories, for tax purposes, [of existing brands] of cigars and cigarettes duly registered at the time of the effectivity of this Act which will reduce the tax imposed herein, or the payment thereof, shall be prohibited. [New brands, as defined in the immediately following paragraph, shall initially be classified according to their suggested net retail price.] UNDERSTATEMENT OF THE SUGGESTED NET RETAIL PRICE BY AS MUCH AS FIFTEEN PERCENT (15%) OF THE ACTUAL NET RETAIL PRICE SHALL RENDER THE MANUFACTURER LIABLE FOR ADDITIONAL EXCISE TAX EQUIVALENT TO THE TAX

19

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

DUE AND DIFFERENCE BETWEEN THE UNDERSTATED SUGGESTED NET RETAIL PRICE AND THE ACTUAL NET RETAIL PRICE. [New brand shall mean a brand registered after the date of effectivity of R. A. No. 8240.] ALL CIGARETTES INTRODUCED IN THE DOMESTIC MARKET AFTER THE EFFECTIVITY OF THIS ACT SHALL SUBMIT THE SUGGESTED NET RETAIL PRICE (SNRP) OF THE PRODUCT TO THE BIR. THE BIR SHALL DETERMINE THE PRESUMPTIVE TAX RATES OF THE PRODUCT USING THE EXCISE TAX RATES PROVIDED FOR UNDER REPUBLIC ACT NO. 9334. THEREAFTER, THE BIR SHALL APPLY THE CORRESPONDING TAX RATES BASED ON SCHEDULES PROVIDED IN THIS ACT. [(1) If the net retail price (excluding the excise tax and the value-added tax) is below Five pesos (P5.00) per pack, the tax shall be:] [Effective on January 1, 2005, Two pesos (P2.00) per pack;] [Effective on January 1, 2007, Two pesos and twenty-three centavos (P2.23) per pack;] [Effective on January 1, 2009, Two pesos and forty-seven centavos (P2.47) per pack; and] [Effective on January 1, 2011, Two pesos and seventy-two centavos (P2.72) per pack.] [(2) If the net retail price (excluding the excise tax and the value-added tax) is Five pesos (P5.00) but does not exceed Six pesos and fifty centavos (P6.50) per pack, the tax shall be:] [Effective on January 1, 2005, Six pesos and thirty-five centavos (P6.35) per pack;] [Effective on January 1, 2007, Six pesos and seventy-four centavos (P6.74) per pack;] [Effective on January 1, 2009, Seven pesos and fourteen centavos (P7.14) per pack; and] [Effective on January 1, 2011, Seven pesos and fifty-six centavos (P7.56) per pack.]

20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

[(3) If the net retail price (excluding the excise tax and the value-added tax) exceeds Six pesos and fifty centavos (P6.50) but does not exceed Ten pesos (P10.00) per pack, the tax shall be:] [Effective on January 1, 2005, Ten pesos and thirty-five centavos (P10.35) per pack;] [Effective on January 1, 2007, Ten pesos and eighty-eight centavos (P10.88) per pack;] [Effective on January 1, 2009, Eleven pesos and forty-three centavos (P11.43) per pack; and] [Effective on January 1, 2011, Twelve pesos (P12.00) per pack.] [(4) If the net retail price (excluding the excise tax and the value-added tax) is above Ten pesos (P10.00) per pack, the tax shall be:] [Effective on January 1, 2005, Twenty-five pesos (P25.00) per pack;] [Effective on January 1, 2007, Twenty-six pesos and six centavos (P26.06) per pack;] [Effective on January 1, 2009, Twenty-seven pesos and sixteen centavos (P27.16) per pack; and] [Effective on January 1, 2011, Twenty-eight pesos and thirty centavos (P28.30) per pack.] [Variants of existing brands and variants of new brands of cigarettes which are introduced in the domestic market after the effectivity of this Act shall be taxed under the proper classification thereof based on their suggested net retail price: Provided, however, That such classification shall not, in any case, be lower than the highest classification of any variant of that brand.] [A variant of a brand shall refer to a brand on which a modifier is prefixed and/or suffixed to the root name of the brand.] Suggested net retail price shall mean the net retail price at which [new brands, as defined above, of] locally manufactured or imported cigarettes are intended by the manufacturer or importer to be sold on retail in major supermarkets or retail outlets in Metro Manila for those marketed nationwide, and in other regions, for those with regional markets. At the end of three (3) months from the product launch, the Bureau of Internal Revenue shall validate the

21

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

suggested net retail price of the [new brand] NEWLY INTRODUCED CIGARETTE against the net retail price as defined herein and determine the correct tax bracket under which a [particular new brand of] NEWLY INTRODUCED cigarette[, as defined above,] shall be classified. After the end of eighteen (18) months from such validation, the Bureau of Internal Revenue shall revalidate the initially validated net retail price against the net retail price as of the time of revalidation in order to finally determine the correct tax bracket under which a [particular new brand of] NEWLY INTRODUCED cigarette[s] shall be classified.[: Provided,

however, That brands of cigarettes introduced in the domestic market between January 1, 1997 and December 31, 2003 shall remain in the classification under which the Bureau of Internal Revenue has determined them to belong as of December 31, 2003. Such classification of new brands and brands introduced between January 1, 1997 and December 31, 2003 shall not be revised except by an act of Congress.] Net retail price, [as determined by the Bureau of Internal Revenue through a price survey to be conducted by the Bureau of Internal Revenue itself, or the National Statistics Office when deputized for [the] THIS purpose by the Bureau of Internal Revenue,] shall mean the price at which the cigarette is sold on retail in at least TEN (10) [twenty (20)] major supermarkets in Metro Manila (for brands of cigarettes marketed nationally), excluding the amount intended to cover the applicable excise tax and the value-added tax. For [brands] CIGARETTES which are marketed only outside Metro Manila, the net retail price shall mean the price at which the cigarette is sold in at least five (5) major supermarkets in the region excluding the amount intended to cover the applicable excise tax and the valueadded tax. MAJOR SUPERMARKETS, AS CONTEMPLATED UNDER THIS ACT, SHALL BE THOSE WITH THE THREE HIGHEST TOTAL GROSS SALES IN METRO MANILA OR THE REGION, AS THE CASE MAY BE, AS DETERMINED BY THE NATIONAL STATISTICS OFFICE, AND SHALL EXCLUDE RETAIL OUTLETS OR KIOSKS, CONVENIENCE OR SARI-SARI STORES, AND OTHERS OF A SIMILAR NATURE. THE NET RETAIL PRICE SHALL BE DETERMINED BY THE BUREAU OF INTERNAL REVENUE (BIR) THROUGH A PRICE SURVEY UNDER OATH.

22

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

[The classification of each brand of cigarettes based on its average net retail price as of October 1, 1996, as set forth in Annex D, including the classification of brands for the same products which, although not set forth in said Annex D, were registered and were being commercially produced and marketed on or after October 1, 1996, and which continue to be commercially produced and marketed after the effectivity of this Act, shall remain in force until revised by Congress. ] THE PROPER TAX CLASSIFICATION OF CIGARETTES, WHETHER REGISTERED BEFORE OR AFTER THE EFFECTIVITY OF THIS ACT, SHALL BE DETERMINED EVERY TWO YEARS FROM THE DATE OF EFFECTIVITY OF THIS ACT. ALL CIGARETTES EXISTING IN THE MARKET AT THE TIME OF THE EFFECTIVITY OF THIS ACT SHALL BE CLASSIFIED ACCORDING TO THE NET RETAIL PRICES AND THE TAX RATES PROVIDED ABOVE BASED ON THE LATEST PRICE SURVEY OF CIGARETTES CONDUCTED BY THE BUREAU OF INTERNAL REVENUE. THE METHODOLOGY AND ALL PERTINENT DOCUMENTS USED IN THE CONDUCT OF THE LATEST PRICE SURVEY SHALL BE SUBMITTED TO THE CONGRESSIONAL OVERSIGHT COMMITTEE CREATED UNDER R.A. NO. 8240. NO TOBACCO PRODUCTS MANUFACTURED IN THE PHILIPPINES AND PRODUCED FOR EXPORT SHALL BE REMOVED FROM THEIR PLACE OF MANUFACTURE OR EXPORTED WITHOUT PAYMENT OF AN EXPORT BOND: PROVIDED, HOWEVER, THAT TOBACCO PRODUCTS FOR EXPORT MAY BE TRANSFERRED FROM THE PLACE OF MANUFACTURE TO A BONDED FACILITY, UNDER PAYMENT OF A TRANSFER BOND, PRIOR TO EXPORT. OF THE TOTAL VOLUME OF CIGARETTES SOLD IN THE COUNTRY, ANY MANUFACTURER AND/OR SELLER OF TOBACCO PRODUCTS MUST SOURCE AT LEAST FIFTEEN PERCENT (15%) OF ITS VIRGINIA LEAF RAW MATERIALS SUPPLY LOCALLY. Manufacturers and importers of cigars and cigarettes shall, within thirty (30) days from the effectivity of this Act and within the first five (5) days of every month thereafter, submit to the Commissioner a sworn statement of the volume of sales for [each particular brand of] cigars and/or cigarettes sold [at his establishment] for the three-month period immediately preceding.

23

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

Any manufacturer or importer who, in violation of this Section, [knowingly] misdeclares or misrepresents in his or its sworn statement herein required any pertinent data or information shall, upon [discovery] FINAL FINDINGS BY THE COMMISSIONER THAT THE VIOLATION WAS COMMITTED, be penalized by a summary cancellation or withdrawal of his or its permit to engage in business as manufacturer or importer of cigars or cigarettes. Any corporation, association or partnership liable for any of the acts or omissions in violation of this Section shall be fined treble the aggregate amount of deficiency taxes, surcharges and interest which may be assessed pursuant to this Section. Any person liable for any of the acts or omissions prohibited under this Section shall be criminally liable and penalized under Section 254 of this Code. Any person who willfully aids or abets in the commission of any such act or omission shall be criminally liable in the same manner as the principal. If the offender is not a citizen of the Philippines, he s hall be deported immediately after serving the sentence, without further proceedings for deportation. SEC. 6. Section 8 of Republic Act No. 8424 or the National Internal Revenue Code, as amended, shall be amended to read as follows: SEC. 8. Duty of the Commissioner to Ensure the Provision and Distribution of Forms, Receipts, Certificates, and Appliances, and the Acknowledgment of Payment of Taxes. (A) Provision and Distribution to Proper Officials. ANY LAW TO THE CONTRARY NOTWITHSTANDING, [I]it shall be the duty of the Commissioner, among other things, to prescribe, provide, and distribute to the proper officials the requisite licenses, internal revenue stamps, [labels and other forms, certificates, bonds, records, invoices, books, receipts, instruments, appliances and apparatus used in administering the laws falling within the jurisdiction of the Bureau] UNIQUE, SECURE AND NON-REMOVABLE

IDENTIFICATION MARKINGS (HEREAFTER CALLED UNIQUE IDENTIFICATION MARKINGS), SUCH AS CODES OR STAMPS, TO BE AFFIXED TO OR FORM PART OF ALL UNIT PACKETS AND PACKAGES AND ANY OUTSIDE PACKAGING OF CIGARETTES AND BOTTLES OF DISTILLED SPIRITS AND FERMENTED LIQUOR. For

24

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

this purpose, internal revenue stamps, OR OTHER MARKINGS, [strip stamps] and labels shall be caused by the Commissioner to be printed with adequate security features. Internal revenue stamps, whether of a bar code or fuson design, OR OTHER MARKINGS shall be firmly and conspicuously affixed OR PRINTED on each pack of cigars and cigarettes AND BOTTLES OF DISTILLED SPIRITS AND FERMENTED LIQUOR subject to excise tax in the manner and form as prescribed by the Commissioner, upon approval of the Secretary of Finance. TO FURTHER IMPROVE TAX ADMINISTRATION, CIGARETTE AND ALCOHOL MANUFACTURERS SHALL BE REQUIRED TO INSTALL AUTOMATED VOLUMECOUNTERS OF PACKS AND BOTTLES TO DETER OVER-REMOVALS AND MISDECLARATION OF REMOVALS. SEC. 7. Section 131, Subsection A of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended as follows: SEC. 131. Payment of Excise Taxes on Imported Articles. x x x The provision of any special or general law to the contrary notwithstanding, the importation of cigars and cigarettes distilled spirits, fermented liquors and wines into the Philippines, even if destined for tax and duty-free shops, shall be subject to all applicable taxes, duties, charges, including excise taxes due thereon. This shall apply to cigars and cigarettes, distilled spirits, fermented liquors and wines brought directly into the duly chartered or legislated freeports of the Subic Special Economic and Freeport Zone, created under Republic Act No. 7227; the Cagayan Special Economic Zone and Freeport, created under Republic Act No. 7922; and the Zamboanga City Special Economic Zone, created under Republic Act No. 7903, and such other freeports as may hereafter be established or created by law: Provided, further, That NOTWITHSTANDING THE PROVISIONS OF REPUBLIC ACT NOS. 9400 AND 9593, importations of cigars and cigarettes, distilled spirits, fermented liquors and wines made directly by a government-owned and operated duty-free shop, like the Duty-Free Philippines (DFP), shall be exempted from all applicable duties only: x x x x x x

25

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Articles

confiscated

shall

be

DESTROYED

USING

THE

MOST

ENVIRONMENTALLY FRIENDLY METHOD AVAILABLE[. disposed of] in accordance with the rules and regulations to be promulgated by the Secretary of Finance, upon recommendation of the Commissioners of Customs and Internal Revenue. [,upon consultation with the Secretary of Tourism and the General Manager of the Philippine Tourism Authority.] x x x SEC. 8. Section 288, subsections (B) and (C) of the National Internal Revenue Code of 1997, as amended by Republic Act No. 9334, is hereby further amended to read as follows: (B) Incremental Revenues from Republic Act No. 8240. Fifteen percent (15%) of the incremental revenue collected from the excise tax on tobacco products under R. A. No. 8240 shall be allocated and divided among the provinces producing burley and native tobacco in accordance with the volume of tobacco leaf production. The fund shall be exclusively utilized for programs [in pursuit of the following objectives] TO PROMOTE ECONOMICALLY VIABLE ALTERNATIVES FOR TOBACCO FARMERS AND WORKERS SUCH AS: (1) PROGRAMS THAT WILL PROVIDE INPUTS, TRAINING, AND OTHER SUPPORT FOR TOBACCO FARMERS WHO SHIFT TO PRODUCTION OF AGRICULTURAL PRODUCTS OTHER THAN TOBACCO INCLUDING, BUT NOT LIMITED TO, HIGH-VALUE CROPS, SPICES, RICE, CORN, LIVESTOCK, FISHERIES, SUGARCANE, AND COCONUT; (2) PROGRAMS THAT WILL PROVIDE FINANCIAL SUPPORT FOR TOBACCO FARMERS WHO ARE DISPLACED OR WHO CEASE TO PRODUCE TOBACCO VOLUNTARILY; (3) COOPERATIVE PROGRAMS TO ASSIST TOBACCO FARMERS IN PLANTING ALTERNATIVE CROPS OR IMPLEMENTING OTHER LIVELIHOOD PROJECTS; (4) LIVELIHOOD PROGRAMS AND PROJECTS THAT WILL PROMOTE, ENHANCE, AND DEVELOP TOURISM POTENTIAL OF TOBACCO-GROWING PROVINCES;

26

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

(5) PROGRAMS TO PROVIDE INSURANCE PROTECTION TO AGRICULTURAL PRODUCERS WHO WILL SHIFT TO PRODUCTION OF AGRICULTURAL PRODUCTS OTHER THAN TOBACCO; (6) INFRASTRUCTURE PROJECTS SUCH AS FARM TO MARKET ROADS, SCHOOLS, HOSPITALS, AND RURAL HEALTH FACILITIES; AND [(1) Cooperative projects that will enhance better quality of agricultural products and increase income and productivity of farmers;] [(2) Livelihood projects, particularly the development of alternative farming system to enhance farmers income; and] ([3]7) Agro-industrial projects that will enable tobacco farmers to be involved in the management and subsequent ownership of projects, such as postharvest and secondary processing like cigarette manufacturing and by-product utilization. The Department of Budget and Management, in consultation with the [Oversight Committee created under said R. A. No. 8240] DEPARTMENT OF AGRICULTURE, shall issue [the corresponding] rules and regulations governing the allocation and disbursement of this fund, NOT LATER THAN ONE HUNDRED EIGHTY (180) DAYS FROM THE EFFECTIVITY OF THIS ACT. (C) Incremental Revenues from the Excise Tax on Alcohol and Tobacco Products under this Republic Act. [(1) Two and a half percent (2.5%) of the incremental revenue from the excise tax on alcohol and tobacco products starting January 2005 shall be remitted directly to the Philippine Health Insurance Corporation for the purpose of meeting and sustaining the goal of universal coverage of the National Health Insurance Program; and] [(2)Two and a half percent (2.5%) of the incremental revenue from the excise tax on alcohol and tobacco products starting January 2005 shall be credited to the account of the Department of Health and constituted as a trust fund for its disease prevention program.] [The earmarking provided under this provision shall be observed for five (5) years starting from January 2005.]

27

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

THE TOTAL INCREMENTAL REVENUE RESULTING FROM THIS ACT AFTER DEDUCTING THE AMOUNT ALLOCATED IN SECTIONS 288 (B) AND 289 OF THE NIRC, AS AMENDED, SHALL BE USED TO FINANCE THE FUNDING GAP BETWEEN THE REGULAR APPROPRIATION AND WHAT IS REQUIRED FOR THE UNIVERSAL HEALTH CARE PROGRAM STARTING JANUARY 2013 FOR THE FOLLOWING: 1. PHILHEALTH PREMIUMS FOR THE FIRST AND SECOND QUINTILES; 2. HEALTH FACILITIES ENHANCEMENT PROGRAM (HFEP); 3. PREVENTIVE AND PROMOTIVE HEALTH PROGRAM, INCLUDING TOBACCO AND ALCOHOL CONTROL; 4. POLICY AND REGULATION STANDARDS; AND 5. PROGRAMS INCLUDING, BUT NOT LIMITED TO, (A) THE EXPANSION OF THE COVERAGE OF THE NATIONAL HEALTH INSURANCE PROGRAM, (B) ATTAINMENT OF HEALTH RELATED MILLENIUM DEVELOPMENT GOALS SUCH AS THE ERADICATION AND REDUCTION OF INFANT AND CHILD MORTALITY, IMMUNIZATION, MATERNAL HEALTH CARE, ERADICATION, REDUCTION AND CONTROL OF HIV/AIDS EPIDEMIC, TUBERCULOSIS, MALARIA, DENGUE, AMONG OTHERS, (C) IMPROVEMENT OF PROVISION OF HEALTH CARE FACILITIES AND INFRASTRUCTURES, (D) RESEARCH AND DEVELOPMENT FUNDS FOR KEY FIELDS SUCH AS REGENERATIVE MEDICINE AND AGING AND PRODUCTION OF DRUGS FROM INDIGENOUS SOURCES, AMONG OTHERS, AND (E) ENHANCEMENT OF BENEFITS AND TRAINING FOR HEALTH CARE PROFESSIONALS ASSIGNED OR POSTED TO HEALTH CARE UNDERSERVED AREAS. FOR FISCAL YEAR 2013, THE AMOUNT OF P23.4 BILLION EARMARKED REVENUE SHALL BE INCLUDED UNDER THE UNPROGRAMMED FUND OF THE 2013 GENERAL APPROPRIATIONS ACT. THE SAID AMOUNT SHALL BE AUTOMATICALLY

PROGRAMMED AND RELEASED TO THE DEPARTMENT OF HEALTH-OFFICE OF THE SECRETARY (DOH-OSEC) AND PHILHEALTH UPON THE COLLECTION OF THE INCREMENTAL REVENUE AS CERTIFIED BY THE BUREAU OF THE TREASURY: PROVIDED, THAT AFTER 2013 THE EARMARKED REVENUE, UPON THE CERTIFICATION OF THE BUREAU OF THE TREASURY OF THE COLLECTION THEREOF, SHALL BE RELEASED QUARTERLY TO THE SAID IMPLEMENTING AGENCIES: PROVIDED, FINALLY,

28

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

THAT THE PRESIDENT, UPON THE RECOMMENDATION OF THE SECRETARY OF THE DEPARTMENT OF HEALTH, SHALL DETERMINE THE ANNUAL ALLOCATIONS FOR THE ABOVE PROGRAMS. Sec. 9. A new section, designated as Section 288-A under Chapter II, Title XI of the same Code is inserted to read as follows: SEC. 288-A. EARMARKING FOR THE ENHANCEMENT OF TAX ADMINISTRATION. AN AMOUNT OF TWO BILLION PESOS

(P2,000,000,000) FROM THE REVENUE TO BE DERIVED FROM THIS ACT SHALL BE EARMARKED FOR THE TAX ADMINISTRATION PROGRAM OF THE GOVERNMENT UNDER SECTION 8 OF R.A. NO. 8424, AS AMENDED, WHICH AMOUNT SHALL BE INCREASED BY THREE PERCENT (3%) EVERY YEAR. SEC. 10. Section 289 of the National Internal Revenue Code of 1997, as

amended by Republic Act No. 9334, is hereby further amended, to read as follows: Section 289. DISPOSITION OF EXCISE TAX COLLECTIONS FROM ALCOHOL AND TOBACCO PRODUCTS. [Special financial Support to Beneficiary Provinces Producing Virginia Tobacco] (A) SPECIAL FINANCIAL SUPPORT TO BENEFICIARY PROVINCES PRODUCING VIRGINIA TOBACCO UNDER REPUBLIC ACT NO. 7171. The financial support given by the National Government for the beneficiary provinces shall be constituted and collected from the proceeds of fifteen percent (15%) of the excise taxes on locally manufactured Virginia-type of cigarettes. The funds allotted shall be divided among the beneficiary provinces pro-rata according to the volume of Virginia tobacco production. Provinces producing Virginia tobacco shall be the beneficiary provinces under Republic Act No. 7171; Provided, however, That to qualify as beneficiary under RA No. 7171, a province must have an average annual production of Virginia leaf tobacco in amount not less than one million kilos: Provided, further, That the Department of Budget and Management (DBM) shall each year determine the beneficiary provinces and their computed share of the funds under RA No. 7171, referring to the National Tobacco Administration (NTA) records of tobacco acceptances, at the tobacco trading centers for the immediate past year.

29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

THE

PROVISIONS

OF

EXISTING

LAWS

TO

THE

CONTRARY

NOTWITHSTANDING, [T] the Secretary of Budget and Management is hereby directed to retain annually the said funds equivalent to fifteen percent (15%) of excise taxes on locally manufactured Virginia-type cigarettes to be remitted to the beneficiary provinces qualified under RA No. 7171 AND TO UTILIZE THE SAID FUNDS FOR PROGRAMS TO PROMOTE ECONOMICALLY VIABLE ALTERNATIVE FOR TOBACCO FARMERS AND WORKERS SUCH AS: (1) COOPERATIVES PROJECTS THAT WILL ENHANCE BETTER QUALITY OF PRODUCTS, INCREASE PRODUCTIVITY, GUARANTEE THE MARKET AND AS A WHOLE, INCREASE FARMERS INCOME, INCLUDING, BUT NOT LIMITED TO, HIGHVALUE CROPS, SPICES, RICE, CORN, LIVESTOCK, FISHERIES, SUGARCANE, COCONUT, AMONG OTHERS; (2) LIVELIHOOD PROJECTS PARTICULARLY THE DEVELOPMENT OF ALTERNATIVE FARMING SYSTEMS TO ENHANCE FARMERS INCOME INCLUDING COOPERATIVE PROGRAMS TO ASSIST TOBACCO FARMERS IN PLANTING ALTERNATIVE CROPS OR IMPLEMENTING OTHER LIVELIHOOD PROJECTS, AND LIVELIHOOD PROGRAMS AND PROJECTS THAT WILL PROMOTE, ENHANCE, AND DEVELOP TOURISM POTENTIAL OF TOBACCO-GROWING PROVINCES; (3) AGRO-INDUSTRIAL PROJECTS THAT WILL ENABLE TOBACCO FARMERS IN THE VIRGINIA PRODUCING PROVINCES TO BE INVOLVED IN THE MANAGEMENT AND THE SUBSEQUENT OWNERSHIP OF THESE PROJECTS SUCH AS POST-HARVEST AND SECONDARY PROCESSING LIKE CIGARETTE

MANUFACTURING AND BY-PRODUCT UTILIZATION; (4) PROGRAMS TO PROVIDE INSURANCE PROTECTION TO AGRICULTURAL PRODUCERS WHO WILL SHIFT TO PRODUCTION OF AGRICULTURAL PRODUCTS OTHER THAN TOBACCO; AND (5) INFRASTRUCTURE PROJECTS SUCH AS FARM TO MARKET ROADS, SCHOOLS, HOSPITALS, AND RURAL HEALTH FACILITIES. The provisions of existing laws to the contrary notwithstanding, the fifteen percent (15%) share from government revenues mentioned in RA No. 7171 and due to the Virginia tobacco-producing provinces shall be directly remitted to the provinces concerned.

30

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Provided, That this Section shall be implemented in accordance with the guidelines of Memorandum Circular No. 61-A, dated November 28, 1993, which amended Memorandum Circular No. 61, entitled Prescribing Guidelines for Implementing Republic Act No. 7171, dated January 1, 1992. [Provided, further, That in addition to the local government mentioned in the above circular,] [t]The concerned officials in the province shall be consulted as regards the identification of projects to be financed. (B) SPECIAL FINANCIAL SUPPORT FOR HEALTH CARE PROGRAMS . THE FOLLOWING AMOUNTS SHALL BE ANNUALLY ALLOCATED FROM THE TOTAL EXCISE TAX COLLECTION ON TOBACCO AND ALCOHOL PRODUCTS: (1) TWENTY-THREE BILLION PESOS (P23,000,000,000) SHALL BE DIRECTLY RELEASED TO THE PHILIPPINE HEALTH INSURANCE CORPORATION (PHILHEALTH) FOR THE PURPOSE OF MEETING AND SUSTAINING THE GOAL OF UNIVERSAL COVERAGE OF THE NATIONAL HEALTH INSURANCE PROGRAM: PROVIDED, THAT SAID AMOUNT SHALL NOT BE USED FOR PERSONNEL SERVICES, AS WELL AS FOR TRAVEL, TRANSPORTATION OR REPRESENTATION EXPENSES, OR PURCHASE OF MOTOR VEHICLES; (2) TEN MILLION PESOS (P10,000,000) TO BE RELEASED DIRECTLY BY THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM) TO EACH OF THE SIX HUNDRED EIGHTEEN (618) DISTRICT HOSPITALS OPERATED BY LGUs FOR THE REPAIR, MAINTENANCE AND IMPROVEMENT OF FACILITIES AND THE UPGRADING OF SERVICES; AND (3) ONE HUNDRED MILLION (P100,000,000) TO BE RELEASED DIRECTLY BY DBM TO EACH OF THE SIXTEEN (16) REGIONAL HOSPITALS AND TWENTY-TWO (22) MEDICAL CENTERS FOR THE REPAIR, MAINTENANCE AND IMPROVEMENT OF FACILITIES AND THE UPGRADING OF SERVICES. (C) SPECIAL FINANCIAL SUPPORT FOR INFORMATION AND EDUCATION CAMPAIGN ON THE DANGERS OF SMOKING AND DRINKING. THE AMOUNT OF ONE HUNDRED MILLION PESOS (P100,000,000) SHALL BE ANNUALLY ALLOCATED AND DIRECTLY RELEASED TO AND ADMINISTERED BY THE DEPARTMENT OF HEALTH (DOH) TO FINANCE A PUBLIC INFORMATION AND EDUCATION PROGRAM

31

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32

EXCLUSIVELY AND DIRECTLY AIMED TO PROVIDE HEALTH AWARENESS INFORMATION ON THE DANGERS OF SMOKING AND DRINKING. (D) SPECIAL FINANCIAL SUPPORT FOR DISPLACED WORKERS IN THE ALCOHOL AND TOBACCO INDUSTRY. (1) THE AMOUNT OF SEVEN HUNDRED FIFTY MILLION (P750,000,000) SHALL BE ANNUALLY ALLOCATED AND DIRECTLY RELEASED TO AND ADMINISTERED BY THE DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE) TO FINANCE UNEMPLOYMENT BENEFIT PROGRAM FOR THE DISPLACED WORKERS IN THE ALCOHOL AND TOBACCO INDUSTRY: PROVIDED, THAT THE UNEMPLOYMENT

BENEFIT SHALL BE EXTENDED TO THE DISPLACED WORKERS FOR A MAXIMUM PERIOD OF ONE (1) YEAR ONLY. (2) THE AMOUNT OF TWO HUNDRED FIFTY MILLION (P250,000,000) SHALL BE ANNUALLY ALLOCATED AND DIRECTLY RELEASED TO AND ADMINISTERED BY THE TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY (TESDA) TO FINANCE THE RE-TRAINING AND RE-TOOLING PROGRAMS FOR THE DISPLACED WORKERS IN THE ALCOHOL AND TOBACCO INDUSTRY. THE EARMARKING PROVISIONS UNDER PARAGRAPHS (B), (C), AND (D) HEREOF SHALL BE IMPLEMENTED FOR FOUR (4) YEARS STARTING FROM JANUARY 2013. THE BALANCE OF THE TOTAL REVENUES COLLECTED FROM THE EXCISE TAXES ON ALCOHOL AND TOBACCO PRODUCTS AFTER DEDUCTING THE ALLOCATION OF THE INCREMENTAL REVENUES FOR TOBACCO FARMERS UNDER R.A. NOS. 7171 AND 8240 AND THE SPECIAL FINANCIAL SUPPORT UNDER PARAGRAPHS (B), (C) AND (D) HEREOF SHALL ACCRUE TO THE GENERAL FUND. SEC. 11. Annual Report. The Department of Budget and Management, the Department of Agriculture, the Philippine Health Insurance Corporation and the Department of Health shall each submit to the Oversight Committee, created under Republic Act No. 8240, a detailed report on the expenditure of the amounts earmarked in this Section on the first week of August of every year. The reports shall be simultaneously published in the Official Gazette and in the agencies websites. SEC. 12. Oversight Committee. The composition of the Oversight Committee, created under Republic Act No. 8240, shall include the Agriculture and Health Committee

32

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Chairpersons of the Senate and the House of Representatives as part of the four (4) members to be appointed from each House. Upon receipt of the agencies annual reports, the Committee shall review them and ensure the proper implementation of this Act as regards the expenditures of the earmarked funds. SEC. 13. Implementing Rules and Regulations. The Secretary of Finance shall, upon the recommendation of the Commissioner of Internal Revenue, and in consultation with the Department of Health, promulgate the necessary rules and regulations for the effective implementation of this Act not later than one hundred eighty (180) days upon the effectivity of this Act. SEC. 14. Separability Clause. If any of the provisions of this Act is declared invalid by a competent court, the remainder of this Act or any provision not affected by such declaration of invalidity shall remain in force and effect. SEC. 15. Repealing Clause. All laws, decrees, ordinances, rules and regulations, executive or administrative orders and such other presidential issuances that are inconsistent with any of the provisions of this Act are hereby repealed, amended or otherwise modified accordingly. SEC. 16. Effectivity. This Act shall take effect fifteen (15) days after its publication in a newspaper of general circulation. Approved,

33