Penalties for Late Payment and False Returns
- Failure to pay percentage tax on time incurs a 25% additional tax, which forms part of the total tax due.
- Willful neglect in filing or submitting false or fraudulent returns results in an additional 50% surcharge on the tax or deficiency.
- Additional charges are collectible as part of the tax, with procedures for collection aligning with whether the tax was previously paid or not.
Advance Payment on Imported and Locally Produced Articles
- Percentage taxes on imported articles must be paid in advance by importers prior to customs release, based on total value including freight, postage, insurance, commission, customs duty, and similar charges.
- Locally produced and manufactured articles are also subject to advance payment before removal from warehouse.
- Amounts paid in advance are credited against percentage tax due on sales each quarter.
Compensating Tax on Commodities from Outside the Philippines
- Persons residing or doing business in the Philippines must pay compensating tax on commodities received from abroad, excluding those subject to specific taxes under Title IV.
- The compensating tax equals the percentage tax imposed under this Title on original transactions by merchants, importers, or manufacturers.
- This tax is payable upon withdrawal or removal from customs or post office.
Exemptions from Compensating Tax
- Merchants, importers, and manufacturers who pay certain percentage taxes are exempt when goods received from abroad are for resale, barter, exchange, or are used as materials to manufacture articles for sale.
- Articles used directly by the importer in manufacturing items subject to specific tax or for foreign consignment are exempt.
- Goods valued at or below 100 pesos per single shipment or 500 pesos for returning residents are exempt.
Requirements for Use of Imported Goods Without Prior Tax Payment
- If imported goods withdrawn without compensating tax are used otherwise, an entry must be marked in accounting books or notice sent to the Collector within 30 days.
- Payment of corresponding compensating tax must be made within 30 days to avoid a 25% additional tax.
Repeal and Effectivity
- All inconsistent laws or parts thereof are repealed.
- The Act took effect on July 1, 1948.