Question & AnswerQ&A (Republic Act No. 2025)
Fixed taxes shall be payable annually on or before January 20, or semi-annually on or before January 20 and July 20. A person starting a business must pay before engaging in it.
The tax is reckoned from the start of the current semester. If abandoned, the tax is paid only up to the end of the semester. No refund if the full year's tax was already paid.
If the percentage tax is unpaid on time, a 25% increment is added. Willful neglect or fraudulent returns add a 50% surcharge to the tax or deficiency.
A 7% tax is levied once on the gross selling price or gross value in money on original sales, barter, or exchange of articles not enumerated in Sections 184 and 185, paid by the manufacturer or producer.
Sawmills pay the tax on 33.33% of the gross cost of logs purchased each month. They must keep complete records of log transactions and purchases of lumber for resale.
The value of the tax-free product used in manufacturing shall be deducted in determining the value of the finished article.
A tax of 2% on the gross value in money of all products manufactured or milled, based on actual selling price or market value at the factory or mill warehouse, except if exported.
A 3% tax on gross receipts is imposed on specified contractors and service providers. Bars and cafes pay 7%, and those within cabarets or night clubs pay 10%. Special invoice requirements apply for liquor sales.
They pay a 2% tax on their monthly gross receipts, excluding owners of bancas and animal-drawn two-wheeled vehicles.
A real estate broker acts for others in buying, selling, leasing, or negotiating real estate transactions for compensation; a salesman is employed by a broker to perform such functions; a dealer is a principal engaged in buying, selling, leasing real estate or holding rental property with gross rents exceeding 4,000 pesos yearly.
A fine of 2,000–10,000 pesos, imprisonment of 6 months to 6 years, and forfeiture of all related articles and property used. Reincidence brings a fine of 5,000–15,000 pesos and imprisonment of 2–12 years.
Capital gains are exempt if invested within one year from year-end in new productive agricultural or industrial enterprises that are dollar-saving or dollar-producing.