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PHILIPPINE ISLANDS



CUMNT8
DtPt.



INTERNAL REVENUE LAWS

OF THE

PHILIPPINE ISLANDS

In Force and Effect
July 1, 1921

COMPRISING

INTERNAL REVE~ .IE LAW Chapter 40, Administrative Code,
1917, Sections 1420 to 1601, as amended

OFFENSES AGAINST INTERNAL REVENUE LAW Chapter 66,
Administrative Code, 1917, Sections 2714 to 2741, as amended

INTERNAL REVENUE ALLOTMENT LAW Chapter 19, Admin-
istrative Code, 1917, Sections 484 to 497, as amended

INCOME TAX LAW Act No. 2833, as amended

TOBACCO INSPECTION LAW Act No. 2613, as amended



Compiled in the

Bureau of Insular Affairs

War Department







WASHINGTON

GOVERNMENT PRINTING OFFICE
1921



GIFT OF






DOCUMENTS

DEPT,



PHILIPPINE ISLANDS



INTERNAL REVENUE LAWS



OF THE



PHILIPPINE ISLANDS

In Force and Effect
July 1, 1921



COMPRISING

INTERNAL REVENUE LAW Chapter 40, Administrative Code,
1917, Sections 1420 to 1601, as amended

OFFENSES AGAINST INTERNAL REVENUE LAW Chapter 66,
Administrative Code, 1917, Sections 2714 to 2741, as amended

INTERNAL REVENUE ALLOTMENT LAW Chapter 19, Admin-
istrative Code, 1917, Sections 484 to 497, as amended ,

INCOME TAX LAW Act No. 2833, as amended
TOBACCO INSPECTION LAW-Act No. 2613, as amended



Compiled in the
Bureau of Insular Affairs
War Department




WASHINGTON

GOVERNMENT PRINTING OFFICE
1921



A JTT



J)OCUMNT*
DEFI.



CONTENTS.



Page.

Internal Revenue Law 3

Ratification of Internal Revenue Taxes by acts of Congress 05

Offenses against Internal Revenue Laws 67

Internal Revenue Allotment Law 79

Income Tax Law +. ; 85

Tobacco Inspection Law '. 113



INTERNAL REVENUE LAW.



[From Administrative Code, 1917.]
Chapter 40. BUREAU OF INTERNAL REVENUE.

PRELIMINARY ARTICLE. Title of chapter.
SEC. 1420. Title of chapter.

ARTICLE I. Organization of Bureau.

SEC. 1421. (Chief officials of Bureau of Internal Revenue.

SEC. 1422. City assessor and collector of Manila.

SEC. 1428. Powers and duties of Bureau.

SEC. 1424. Specific provisions to be contained in regulations.

SEC. 1425. Forms, certificates, and appliances supplied by the Collector of

Internal Revenue.

SEC. 1420. A fronts and deputies for collection of internal revenue.
SEC. 1427. Expenses of collection to be borne by provinces.
SEC. 1428. Internal-revenue inspection districts.
SEC. 1429. Duties of internal-revenue agents.
SEC. 1480. Authority of agent's assistant.
SEC. 1431. Assignment of storekeepers to warehouses.
SEC. 1432. Assignment of internal-revenue agents to special duties.
SEC. 1433. Reports of violations of law.

SEC-. 1434. Authority of internal-revenue officers to make arrests and seizures.
SEC. 1435. Power of Collector of Internal Revenue in making assessments.
SEC. 1436. Authority of officers to administer oaths and take testimony.
SEC. 1437. Contents of Collector's annual report.

ARTICLE II. Sources of internal revenue.
SEC. 1438. Sources of taxes.

ARTICLE III. Cedula tax.

SEC. 1439. Person liable to cedula tax.

SEC. 1440. Amount of the cedula tax.

SEC. 1441. Increase of tax in case of delinquency.

SKC. 1442. Payment of arrearages.

SEC. 1443. Time for payment of cedula tax When delinquency occurs.

SEC. 1444. Extension of time for payment of cedula tax.

SEC. 1445. Remission of tax in Department of Mindanao and Sulu.

SEC. 1440. Payment of cedula tax in province other than that of domicile.

SEC. 1447. Presentation of cedula certificate upon certain occasions.

SEC. 1448. Secondary certificate in lieu of destroyed cedula certificate.



/f\ ' 4 M



1946



' *4 INTERNAL REVENUE LAWS.

"' * "'* * ' ARTICLE IV. Documentary stump ia.v.

SEC. 1449. Stamp tax upon documents and papers.

SEC. 1450. Documents and papers not subject to stamp tax.

SEC. 1451. Payment of documentary stamp tax Cancellation of stamp.

SEC. 1452. Effect of failure to stamp taxable document.

ARTICLE V. Privilege taxes.

SEC. 1453. Privilege taxes on business and occupation.

SEC. 1454. Legality of business as affected by payment of tax.

SEC. 1455. Time for payment of fixed taxes.

SEC. 1456. Reckoning tax for business first begun or abandoned during year.

SEC. 1457. Fixed tax upon business subject to percentage tax.

SEC. 1458. Payment of percentage taxes Quarterly report of earnings.

SEC. 1459. Percentage tax on merchant's sales.

SEC. 1460. Sales not subject to merchant's tax.

SEC. 1461. Percentage tax on printers, publishers, and lithographers.

NEC. 1462. Percentage tax on contractors, warehousemen, and others.

SEC. 1463. Percentage tax on carriers and keepers of stables and garages.

SEC. 1464. Amount of tax on business.

SEC. 1465. Words and phrases defined.

SEC. 1466. Percentage tax on stock, real estate, and commercial brokers.

SEC. 1467. Increase of tax on cockpits.

SEC. 1468. Reduction of tax on race tracks.

SEC. 1469. Privilege secured by payment of tax.

SEC. 1470. Continuation of business of deceased person.

SEC. 1471. Removal of business to other location.

Six . 1472. Revocation of privilege.

SEC. 1473. Amount of privilege tax on occupation.

Six. 1474. Exemption of persons employed by Government or engaged in work

of charity.

SEC. 1475. Privilege tax on signs, signboards, and billboards.
SEC. 1476. Removal of sign by Government.
SEC. 1477. Restrictive provisions.

ARTICLE VI. Specific taxes.

SEC. 1478. Articles subject to specific tax.

SEC. 1479. Payment of specific tax on domestic products.

SEC. 1480. Payment of specific tax on imported articles.

SEC. 1481. Specific tax on distilled spirits.

SEC. 1482. Mode of computing contents of cask or package.

SEC. 1483. Tax on preparations containing distilled spirits as chief ingredient.

SEC. 1484. Exemption in favor of domestic denatured alcohol.

SEC. 1485. Removal of spirits or cigars under bond.

SEC. 1486. Specific tax on wines.

SEC. 1487. Specific tax on fermented liquors.

S KO. 1488. Removal of fermented liquors to bonded wn rehouse.

SEC. 1489. Removal of damaged liquors free of tax.

SEC'. 1490. Specific tax on products of tobacco.

SEC. 1491. Removal of tobacco products without prepayment of taxes.

SEC. 1492. Specific tax on cigars and cigarettes.

SEC. 1493. Specific tax on matches.




INTERNAL REVENUE LAWS.

1494. Tax on skimmed milk.
SEC. 1495. Specific tax on manufactured oils.
SEC. 1496. Tax on coal.
SEC. 1497. Tax on cinematographic films.

1498. Tax on playing cards.



: -



CLE VII. Taxes on resources of banks, receipts of insurance coinp(i-i:icx,
and receipts of corporations paying franchise tax.

SEC. 1499. Tax on capital, deposits, and circulation of banks.

SEC. 1500. Time for payment of tax Increase of tax in case of delinquency.

SEC. 1501. Banker's semiannual report of business done.

SEC. 1502. Computing resources of bank incorporated abroad.

SEC. 1503. Exemption of savings institutions.

SEC. 1504. Exemption in case of reduced circulation.

SEC. 1505. Tax on insurance premiums.

SEC. 1506. Time for payment of tax Increase of tax in case of delinquency.

SEC. 1507. Yearly report from insurance company.

SEC. 1508. Tax on corporate franchises.

ARTICLE VIII. Charges for forest products.

SEC. 1509. Measuring of forest products and collection of charges thereon.

SEC. 1510. Mode of measuring timber.

SEC. 1511. Charges for timber cut in public forests.

SEC. 1512. Charges for firewood cut in public forests.

SEC. 1513. Charges collectible for wood cut from unregistered private lands.

SEC. 1514. Surcharge for illegal cutting and removal of forest products or for

delinquency.

SEC. 1515. Charge for timber cut for use on mining claim.
SKC. 1516. Charges for gums, resins, and other forest products.
SEC. 1517. Charges for stone, earth, salt, and guano taken from lands under

the jurisdiction of the Bureau of Forestry.

SEC. 151S. No charge for products lawfully removed under gratuitous license.
SEC. 1519. Gratuitous licensees subject to regulations of Bureau of Internal

Revenue. x
SEC. 1520. Time for payment of forest charges.

ARTICLE IX. Testing and sealing of weights and measures.

SEC. 1521. Sealing and licensing of weights and measures.

SEC. 1522. Fees for sealing linear metric measures.

SEC. 1523. Fees for sealing English linear measures.

SEC. 1524. Fees for sealing metric measures of capacity.

SEC. 1525. Fees for sealing metric instruments of weight.

SEC. 1526. Form and duration of license for use of weights and measures.

SEC. 1527. Secondary standards preserved by provincial treasurers Testing

of same.

SEC. 1528. Comparison of secondary and fundamental standards.
SEC. 1529. Inspectors of weights and measures.
SEC. 1530. Sealers of weights and measures.

SEC. 1531. Destruction of defective instrument of weight or measure.
SEC. 1532. Testing of instruments used in Government work.
SEC. 1533. Dealer's permit to keep unsealed weights and measures.



6 INTERNAL REVENUE LAWS.

ARTICLE X. .if? valorem ta.r on output of mines.

SEC. 1534. Rate and basis of tax on mines.
SEC. 1535. Time and manner of collection.

ARTICLE XI. Tax on inheritance, legacies and other acquisition* mortis causa.

SEC. 1536. Conditions and rates of taxation.

SEC. 1537. Payment of tax antecedent to the transfer of shares, bonds or rights.

SEC. 1538. Exemption in favor of surviving spouse and children.

SEC. 1539. Deductions to be made in determining net taxable amount.

SEC. 1540. Additions of gifts and advances.

SEC. 1541. Rule of taxation when beneficiaries belong to different classes.

SEC. 1542. Determination of value of usufructs, annuities, and real property.

SEC. 1543. Exemption of certain acquisitions and transmissions.

SEC. 1544. When tax to be paid.

SEC. 1545. Beneficiary to be charged with tax on his corresponding portion.

SEC. 1546. Payment before delivery by executor or administrator.

SEC. 1547. Payment of tax antecedent to registration of documents.

SEC. 1548. Restitution of tax upon satisfaction of outstanding obligation.

ARTICLE XII. Administrative provision* relative to persons and establishments
subject to privilege taxes.

SEC. 1549. Registration of name or style with provincial treasurer.

SEC. 1550. Sign to be exhibited by distiller or rectifier.

SEC. 1551. Sign to be exhibited by manufacturer of products of tobacco.

SEC. 1552. Exhibition of certificate of payment at place of business.

ARTICLE XIII. Adniinixtra-ti-rc pro ris ions reyulathnj lriisihexn of ]>crsous deal-
inn in article* subject to sited fie ta.r.

SEC. 1553. Extent of supervision over establishments producing taxable output.

SEC. 1554. Records to be kept by manufacturers Assessments based thereon.

SEC. 1555. Premises subject to approval by collector.

SEC. 1556. Labels and form of packages prescribed by collector.

SEC. 1557. Removal of articles after payment of tax.

SEC. 1558. Storage of goods in internal-revenue bonded warehouse.

SEC. 1559. Proof of exportation Exporter's bond.

SEC. 1560. Manufacturers' and importers' bonds.

SEC. 1501. Records to be kept by wholesale dealers.

Six 1 , inoii. Records to be kept by dealers in leaf tobacco.

SEC. 15(53. Preservation <>f invoices and stamps.

SKC. 1564. Information to be given by manufacturers of distilling apparatus.

SKC. 15(55. Establishment of distillery warehouses.

SEC. 1566. Custody of distillery warehouse.

SKC. 1567. Limitation on quantity of spirits removed from warehouse.

SEC. 1568. Requirement incident to process of denaturing alcohol.

SFC. 1569. Recovery of alcohol for use in arts and industries.

SKC. 1570. Supervision over rectification and compounding of liquors.

SEC. 1571. Authority of officer in searching for taxable articles.

SEC. 1572. Detention of package containing taxable articles.

SKC-. 1573. Inscription to be placed on skimmed milk.



SEC



INTERNAL REVENUE LAWS. 7

ARTICLE XIV. Administrative provisions relative to prohibited drugs.

?. 1574. Words and phrases defined.

SEC. 1575. Lawful possession and uses of prohibited drugs specified.

SEC. 1576. Importation of opium Storage of same.

SEC. 1577. Record to be kept by pharmacists Inspection of same.

ARTICLE XV. Remedies in general.

SKC. 1578. Injunction not available to restrain collection of tax.
SKC. 1579. Recovery of tax paid under protest.
SEC. 1580. Action to contest forfeiture of chattel.

.1581. Form and nvode of proceeding in actions arising under internal
revenue law.

. 1582. Authority of collector to make compromises and to refund taxes.
SKC. 15S.'}. Satisfaction of judgment recovered against treasurer or other officer.
SEC. 1 584. Remedy for enforcement of statutory penal provisions.
SEC. 1585. Remedy for enforcement for forfeitures.
Sn\ 1580. When property to be sold or destroyed.

SKC. 1587. Disposition of funds recovered in legal proceedings or obtained from
forfeitures.

ARTICLE XVI. Civil remedies for collection of taxes.

SEC. 1588. Nature and extent of tax lien.

SEC. 1589. Civil remedies for collection of delinquent taxes.

SEC. 1590. Distraint of personal property.

SEC. 1591. Mode of procedure and disposition of proceeds.

SEC. 1592. Release of distrained property upon payment prior to sale.

SEC. 1593. Report of sale to Bureau of Internal Revenue.

SEC. 1594. Purchase by Government at sale upon distraint.

SEC. 1595. Levy on real estate after exhaustion of personality.

SEC. 1596. Advertisement and sale.

SEC. 1597. Redemption by delinquent.

SEC. 1598. Final deed to purchaser.

SEC. 1599. Forfeiture to Government for want of bidder.

SEC. 1600. Resale of real estate taken for taxes.

SEC. 1601. Further distraint or levy.

PRELIMINARY ARTICLE. TITLE or CHAPTER.

SEC. 1420. Title of chapter. This chapter shall be known as the
Internal Revenue Law.
[26571575.]

ARTICLE I. ORGANIZATION OF BUREAU.

SEC. 1421. Chief officials of Bureau of Internal Revenue. The
Bureau of Internal Revenue shall have one chief and one assistant
chief to be known, respectively, as the collector of internal revenue
and the deputy collector of internal revenue.

[26571576.]

SEC. 1422. City assessor and collector of Manila. The collector of
internal revenue shall be ex officio city assessor and collector of



8 INTERNAL REVENUE LAWS.

Manila and as such shall collect all its municipal revenues, and shall
perform in and for said city the duties imposed by this law on pro-
vincial treasurers generally.

[26571577.]

SEC. 1423. Powers and duties of bureau. The powers and duties of
the Bureau of Internal Revenue shall comprehend the collection of
all internal-revenue taxes, fees, and charges, and the enforcement
according to law of all forfeitures, penalties, and fines connected
therewith. Said bureau shall also give effect to and administer the
supervisory and police powers conferred by this chapter or other
law or parts of laws within its jurisdiction.

[26571578.]

SEC. 1424. (As amended by act No. 2819; sec. 28, act No. 2833; and
sec. 1, act No. 2835.) Specific provisions to l>e contained in regula-
tions. The regulations of the Bureau of Internal Revenue shall,
among other things, contain provisions specifying, prescribing, or
defining

(a) The time and manner in which provincial treasurers shall can-
vass their provinces for the purpose of discovering persons and prop-
erty liable to internal-revenue taxes, and the manner in which their
lists and records of taxable persons and taxable objects shall be
made and kept.

(b) The forms of labels, brands, or marks to be required on goods
subject to a specific tax and the manner in which the labeling, brand-
ing, or marking shall be effected.

(c) The conditions under which and the manner in which goods
intended for export, which if not exported would be subject to a
specific tax, shall be labeled, branded, or marked.

(d) The conditions to be observed by revenue officers, provincial
fiscals, and other officials respecting the institution and conduct of
legal actions and proceedings.

(e) The manner in which persons authorized to have and keep
prohibited drugs shall keep their records relating to the same.

(/) The conditions under which opium may be imported, the man-
ner of its storage and removal for use, as well as the manner in which
the same shall be marked or labeled prior to removal.

(g) The conditions under which prohibited drugs may be trans-
ferred from the possession of persons authorized to have and keep
the same to the possession of other persons similarly authorized.

(7t.) The conditions under which -goods intended for storage in
bonded warehouses shall be conveyed thither, their manner of stor-
age, and the method of keeping the entries and records in connection
therewith ; also the books to be kept by storekeepers and the 'reports



INTERNAL REVENUE LAWS.

to be made by them in connection with their supervision of such
houses.

(i) The conditions under which alcohol intended for use in the
arts and industries may be removed and dealt in, the character and
quantity of the denaturing material to be used, the manner in which
the process of denaturing shall be effected, the bonds to be given,
the books and records to be kept, the entries to be made therein, the
reports to be made to the collector of internal revenue, and the
signs to be displayed in the business or by the person for whom such
denaturing is done or by whom such alcohol is dealt in.

(j) The manner in which revenue shall be collected and paid, the
instrument, document, or object to which revenue stamps shall be
affixed, the mode of cancellation of the same, the manner in which
the proper books, records, invoices, and other papers shall be kept
and entries therein made by the person subject to tjie tax, as well as
the manner in which licenses and stamps shall be gathered up and
returned after serving their purpose.

(k) (Repealed by sec. 1 of act 2819.)

(I) The conditions to be observed by revenue officers, provincial
fiscals, and other officials respecting the enforcement of Article XI
imposing a tax on inheritances, legacies, and other acquisitions mortis
causa and such other rules and prohibition which the collector of
internal revenue may consider suitable for the enforcement of the
said Article XI.

(m) The manner in which income-tax returns, information, and
reports shall be prepared and reported and the tax collected and
paid, as well as the conditions under which evidence of payment shall
be furnished the taxpayer, and the preparation and publication of
income-tax statistics.

[26571579.]

SEC. 1425. Forms, certificates, and appliances supplied ~by the col-
lector of internal revenue. It shall be the duty of the collector of
internal revenue, among other things, to prescribe, provide, and dis-
tribute to the proper officials the requisite licenses, cedula forms, in-
ternal-revenue stamps, and labels or tags used in sealing weights and
measures, and all other forms, certificates, bonds, records, invoice
books, instruments, appliances and apparatus used in administering
the laws under the jurisdiction of the bureau.

[26571580.]

SEC. 1426. Agents and deputies for collection of internal revenue.
For the collection of the internal revenue on imported articles the
insular collector of customs and his subordinates are constituted
agents of the collector of internal revenue; and the provincial treas-



10 INTERNAL REVENUE LAWS.

urers, their deputies, and employees shall be his deputies for the col-
lection of other internal revenue and the enforcement of all laws
within the jurisdiction of the bureau.

For economy or effectiveness in the collection of the cedula tax,
the collector of internal revenue may authorize the provincial treas-
urer of any province to appoint, for the first four months of the
year only, special deputies to collect such tax, at a rate of compen-
sation not greater than ten centavos for each tax collected and cer-

C?

tificate issued.

The treasurer of the Department of Mindanao and Sulu may ap-
point such special deputies as he may deem necessary for the col-
lection and execution of the payment of the cedula tax in each
province of the department, and pay to the persons so appointed,
including persons otherwise compensated by the Government, a
commission of not to exceed 10 per centum on the money collected
by each, which commission shall be stated in his appointment.

[26571581.]

SEC. 1427. Expenses of collection to be borne by provinces. The
expenses incurred by the provincial and municipal authorities in
collecting taxes and in enforcing the laws under the jurisdiction
of the Bureau of Internal Revenue, including expenses incurred in
appearing in the courts in internal-revenue cases, shall be borne by
the respective provinces ; but the city of Manila shall be liable only
for such expenses as are incident to the collection of internal-revenue
and other taxes in and for that city, and for such expenses the In-
sular Government shall be reimbursed.

[26571582.]

SEC. 1428. Internal-revenue inspection districts. With the ap-
proval of the department head, the collector of internal revenue
shall divide the Philippine Islands into such number of inspection
districts as may from time to time be required for administrative
purposes. Each of these districts shall be in charge of an internal-
revenue agent.

[26571583.]

SEC. 1429. Duties 'of internal-revenue agents. It shall be the
duty of every internal-revenue agent to see that all laws and regula-
tions relative to the collection of internal-revenue taxes are faith-
fully executed and complied with, to aid in the prevention, detection,
and punishment of any frauds or delinquencies in connection there-
with, and to examine into the efficiency of all officers and employees
of the Bureau of Internal Revenue. He shall report in writing to
the collector of internal revenue any neglect of duty, incompetency,
delinquency, or malfeasance in office of any internal-revenue officer
of which he may obtain knowledge, with a statement of all the facts
in each case and any evidence sustaining the same. He may, by



INTERNAL, REVENUE LAWS. 11

:ice in writing, suspend from duty any storekeeper, and in such
case he shall immediately notify the collector of internal revenue and
within three days thereafter report his action an$ his reasons there-
for in writing to said collector.

Should any revenue agent discover any neglect, incompetency,
delinquency, or malfeasance of any provincial treasurer in the per-
formance of his duty as a collector of internal revenue, he shall im-
mediately report the facts to the collector of internal revenue In
writing.

[26571584.]

SEC. 14:30. Authority of agent's assistant. An agent's assistant
in any district may, in the name of the internal-revenue agent in
charge of such district and under the control of such officer as his
principal, exercise any power or perform any act which might be
exercised or performed by such internal-revenue agent himself.

[26571585.]

SEC. 1431. Assignment of storekeepers to warehouses. The col-
lector of internal revenue shall employ and assign to such bonded
warehouses and manufacturers' warehouses as lie shall deem ex-
pedient internal-revenue storekeepers.

[26571586.]

SEC. 1432. Assignment of internal-revenue agents to special
duties. Internal-revenue agents may be assigned to duty under the
direction of any officer of the Bureau of Internal Revenue and may
be assigned to special duties other than those of internal-revenue
agent proper.

Any officer 'or employee of the bureau may be assigned to the
duties of revenue agent without change of his official character or
salary.

[26571587.]

SEC. 1433. Reports of violations of law. When a provincial or
deputy provincial treasurer or an internal-revenue agent discovers
evidence of the violation of any law administered by the Bureau
of Internal Revenue of such character that a criminal prosecution
ought to be instituted, he shall immediately report the facts to the
fiscal of the province, giving the name of the offender and the names
of the witnesses, if possible. A duplicate of such report shall be
sent to the collector of internal revenue.

It shall also be the duty of officers and employees of the Bureau
of Internal Revenue to report to the Bureau of Forestry any viola-
tions of the forest law within their knowledge. A duplicate of
each such report shall be furnished to the collector of internal
revenue.

[26571587.]



12 INTERNAL REVENUE LAWS.

SEC. 1434. Authority of internal-revenue officers to make arrest*
and seizures. The collector of internal revenue, the deputy collector of
internal revenue, internal-revenue agents, and provincial treasurers


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Online LibraryPhilippinesInternal revenue laws of the Philippine Islands in force and effect July 1, 1921 .. → online text (page 1 of 12)