Question & AnswerQ&A (Republic Act No. 1175)
Republic Act No. 1175 is an act amending sections one and two of Republic Act No. 601, imposing a special excise tax on the sale of foreign exchange by the Central Bank of the Philippines and its agents, with specific exemptions.
The special excise tax rate on the value in Philippine peso of foreign exchange sold and/or authorized to be sold by the Central Bank or its agents is seventeen percent (17%).
The special excise tax was effective until June 30, 1955.
The Central Bank of the Philippines or any of its agents is authorized to sell foreign exchange subject to this special excise tax.
Exempt items include foreign exchange used for the importation of car milk, canned beef, canned fish, chocolate, malt, stabilizers, vitamin concentrates; government-purchased supplies and equipment; machinery and equipment for industries and agriculture; fertilizers; containers for local product export; textbooks and school-approved books; drugs and medical supplies listed in the appendix; insurance payments; spare parts for Philippine vessels and airplanes; and other specified exemptions.
No, drugs and medicines listed in the appendix of the Act are exempted from the tax.
Payments in respect of reinsurance, marine and aviation insurance, and premiums by veterans on life insurance policies under the US government, as well as life insurance policies issued before December 9, 1949, are exempt.
No, remittances for payment of principal and interest of foreign loans contracted under obligation of the Philippine Government or its instrumentalities are exempt.
Vessels or ships intended for Philippine registry with 90% ownership exclusively Filipino, and charter fees of airplanes and vessels of Philippine registry are exempt.
Yes, machinery and/or raw materials to be used by new and necessary industries as determined under Republic Act Numbered Thirty-five are exempt from the tax.
The Act took effect upon its approval on June 18, 1954.
Medical and hospital supplies such as bandages, surgical instruments, syringes, needles, diagnostic instruments, x-ray equipment, and others listed in the appendix are exempted.
Textbooks, reference books, and supplementary readers approved by the Board on Textbooks and/or established educational institutions are exempted to support education.
Yes, fertilizers and machinery/accessories imported directly or through cooperatives by planters and farmers are exempt from the tax.
Yes, drugs and medicines for use in dental and veterinary professions are exempted.