Question & AnswerQ&A (Republic Act No. 1856)
Every person engaging in a business subject to percentage tax shall pay a fixed annual tax of twenty pesos.
The tax is based on gross annual sales during the preceding calendar year, with various graduated fixed amounts starting from ten pesos if gross sales exceed 2,000 pesos but do not exceed 10,000 pesos, up to five hundred pesos if sales exceed five hundred thousand pesos.
The initial graduated fixed annual tax to be paid by a person first engaging in business subject to said tax shall be ten pesos.
Brewers shall pay a fixed tax of one thousand pesos for the whole year.
They must pay an annual tax of seventy-five pesos.
Exemptions include persons whose gross monthly sales do not exceed two hundred pesos, sellers of certain domestic food products in public markets, peddlers with limited stock, producers working at home with low daily production value, owners of animal-drawn two-wheeled vehicles, banca owners, and government employees or persons serving religious, educational, or charitable institutions exclusively.
Exemptions include articles taxed under Title IV, agricultural and fish products sold by producers, minerals sold by lessees or owners, articles taxed under Section 189, articles exported abroad by manufacturers, persons with gross monthly sales under two hundred pesos, and certain sellers as described, among others.
Persons must issue serially numbered sales or commercial invoices or receipts in duplicate for each sale or service valued at two pesos or more, showing names and business addresses. For sales of fifty pesos or more, the purchaser's details must also be shown. Originals go to the purchaser, and duplicates are kept by the seller for five years.
No, public market vendors selling exclusively domestic meat, fruits, vegetables, game, poultry, fish, and similar domestic food products are exempt from these provisions.
The Act takes effect upon its approval on June 22, 1957.