Law Summary
Amendments to Section 188 - Excluded Transactions and Tax Exemptions
- Exclusions in computing taxes under Sections 184, 185, and 186 include:
- Articles subject to tax under Title IV of the Revenue Code.
- Agricultural products and ordinary salt in their original or processed form sold/bartered/exchanged by the producer or landowner; fish and by-products sold/bartered/exchanged by fishermen or operators.
- Minerals and mineral products sold/bartered/exchanged by lessees, concessionaires, or owners of mineral lands.
- Articles subject to tax under Section 189.
- Articles exported abroad by the manufacturer or producer regardless of shipping arrangements.
- Exempt persons from the percentage taxes under Sections 184-186 include:
- Persons with gross monthly sales or receipts not exceeding ₱200.
- Filipino retail sellers in public market places selling all kinds of food products.
- Peddlers and fixed-stand sellers with daily stock not exceeding ₱100, selling specified food products.
- Producers working at home with daily output not exceeding ₱5 per capable worker.
- Persons importing articles under contracts exclusively for use by the Armed Forces of the Philippines.
Amendments to Section 191 - Percentage Tax on Various Contractors and Businesses
- Contractors and operators in construction, filling, demolition, salvage, arrastre, installation of utilities, and other specified services must pay 3% tax on gross receipts.
- Businesses involved include:
- Water, light, power sellers (except franchise taxpayers)
- Dockyards, mine drilling, smelting, engraving, plating, plastic lamination, vulcanizing, vehicle greasing/washing
- Sawmills under contract to cut others' logs
- Drycleaning, dyeing, laundries, photographic studios
- Telecom lines/exchanges, broadcasting/wireless stations
- Funeral parlors, mechanical repair shops, shoe repairing, tailor shops
- Beauty parlors, dressmakers, milliners, hatters
- Hotels, lodging houses, stevedores, warehousemen
- Plumbers, smiths, painters, lithographers, publishers (except recurring publication of newspapers, magazines)
- Printers, bookbinders, business agents, independent contractors (except those related to export embroidery/apparel and their agents)
- Keepers of restaurants and caterers pay a 3% tax on gross receipts.
- Keepers of bars and cafes where wines or liquors are served pay a 7% tax; they must issue two sets of serially numbered sales invoices: one for food/refreshments and another for wines/liquors.
- Establishments inside race tracks or jai-alai venues, or accessible to their patrons via connecting doors, pay a 20% tax on gross receipts.
- Establishments inside cabarets or nightclubs, or accessible to patrons by connecting door/passage, pay a 10% tax on gross receipts.
Effectivity and Tax Condonation
- The Act takes effect immediately upon approval.
- All previously unpaid or uncollected taxes from persons selling food products in public markets who are exempt under this Act are condoned.