QuestionsQuestions (Act No. 1189)
The short title is “The Internal Revenue Law of Nineteen hundred and four.”
The chief officer is the Collector of Internal Revenue, appointed by the Civil Governor with the advice and consent of the Philippine Commission.
Under the Secretary of Finance and Justice, he has general superintendence of assessment and collection of all taxes and excises imposed by the Act and performs other duties required by law.
He must submit at least once each year to the Secretary of Finance and Justice a report of proceedings of the Bureau, collections and disbursements, sources of revenue, classes of disbursements, recommendations, and an estimate of expenses of collecting internal revenue for each province.
Expenses of maintaining the Collector’s office (including subordinates/employees) are insular expenses borne by the Insular Government; expenses incurred by provincial treasurers in performing duties imposed by the Act are borne by the respective provincial treasuries.
A bond to the Insular Government in the sum of sixty thousand pesos with sufficient surety, conditioned for faithful performance of duties and due accounting for all stamps, cedulas, moneys, and other property coming into his possession.
On or before the fifth day of each calendar month, they must transmit to the Insular Treasurer all money collected during the preceding month on account of internal revenues, except where otherwise specifically provided.
No money properly belonging to the Insular Treasury shall be retained by any provincial treasurer for payment of salaries/expenses of his office or for any other purpose.
They help ensure faithful execution of internal-revenue laws and regulations, aid in prevention/detection/punishment of fraud, examine efficiency of officers, report neglect/incompetency/delinquency/malfeasance, and may suspend from duty certain officials upon notice.
Divulging or making known information or trade secrets/operations/style/apparatus of a manufacturer visited in official duties is punishable by a fine not more than two thousand pesos and imprisonment from not less than one nor more than five years.
Acts include extortion/oppression; demanding more than authorized sums or taking unauthorized compensation; failing to give receipts; conspiring/colluding to defraud revenues; willfully making opportunity to defraud; omission to do acts with intent to enable defrauding; permitting violations negligently/designly; making/signing false entries or false certificates; failing to report known violations/frauds; and accepting sums for compromise/settlement without legal authority.
Every tax constitutes a lien in favor of the Insular Government superior to all other charges/liens from the time it becomes due until paid, on the property and rights used in the business related to which the tax is assessed. “Person” includes firms, associations, and corporations.
The provincial treasurer may levy upon all property subject to the lien for nonpayment and related costs (distraint and levy), which is cumulative to action in court. If distraint is made, an inventory/account must be prepared, notice posted in at least two public places, sale at public auction to highest cash bidder after at least ten days, with restoration if payment is made prior to sale.
Notification must be exhibited in at least two public places in the municipality (including the municipal president’s office), specifying time/place, and the sale must not be less than ten days after notice/publication/posting.
A suit cannot be maintained unless protest is made at the time of payment or within ten days thereafter, and after appeal to the Collector with an adverse decision—except if decision is delayed six months from appeal, then suit may be brought without it. Suit must be filed within two years from when the cause of action accrued. Courts cannot grant injunction restraining collection; remedy is payment under protest and action to recover back illegally collected amounts.
For each offense: fine not less than two thousand nor more than ten thousand pesos and imprisonment not less than one year nor more than five years, at the court’s discretion.
Except poll taxes, taxes required by the Act on specified taxable articles and certain documents/instruments are paid by affixing internal-revenue stamps to be purchased, attached, and canceled in the manner provided.
License tax is paid by affixing stamps to license forms. The license form is divided into quarterly coupons; the taxpayer separates and transmits the coupon with payment on the first day of each quarter to the provincial treasurer to obtain stamps to affix in the proper division, and coupons are retained and transmitted monthly to the Collector after stamp sales endorsement.