Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section one hundred eighty of the National Internal Revenue Code, as amended by Republic Act Numbered Sixteen hundred twelve, is further amended to read as follows:

"SEC. 180. Time for payment of fixed taxes.—All fixed taxes shall be payable, at the option of the taxpayer, annually, on or before the twentieth of January, or semi-annually, on or before the twentieth of January and July. But any person first beginning a business or occupation must pay the tax before engaging therein."

SEC. 2. Section one hundred eighty-one of the same Code which was repealed by Republic Act Numbered Sixteen hundred twelve, is reenacted to read as follows:

"SEC. 181. Reckoning of tax for business first begun or abandoned during year.—When an occupation or business subject to a fixed tax is newly begun during any year, the tax shall be reckoned from the commencement of the current semester; and when either is at any time abandoned, the tax shall not be exacted for a longer period than to the end of the semester: Provided, That any person who elected to pay the tax in full for the year shall not be entitled to a refund of the tax corresponding to the unused period for which the tax had been paid."

SEC. 3. Paragraph (a), section one hundred eighty-three" of the National Internal Revenue Code, as amended by Republic Act Numbered Sixteen hundred twelve, is further amended to read as follows:

"SEC. 183. Payment of percentage taxes.— (a) In general.—It shall be the duty of every person conducting a business on which a percentage tax is imposed under this Title, to make a true and complete return of the amount of his, her or its gross monthly sales, receipts or earnings, or gross value of output actually removed from the factory or mill warehouse and within twenty days after the end of each month, pay the tax due thereon: Provided, That any person retiring from a business subject to the percentage tax shall notify the nearest internal revenue officer thereof, file his return or declaration, and pay the tax due thereon within twenty days after closing his business.

"If the percentage tax on any business is not paid within the time specified above, the amount of the tax shall be increased by twenty-five per centum, the increment to be a part of the tax.

"In case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of such return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount. The amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the falsity or fraud, in which case the amount so added shall be collected in the same manner as the tax."

SEC. 4. Section one hundred eighty-six of Commonwealth Act Numbered Four hundred sixty-six, as amended, is hereby further amended to read as follows:

"SEC. 186. Percentage tax on sales of other articles.— There shall be levied, assessed and collected once only on every original sale, barter, exchange, and similar transaction either for nominal or valuable considerations, intended to transfer ownership of, or title to, the articles not enumerated in sections one hundred and eighty-four and one hundred and eighty-five a tax equivalent to seven per centum of the gross selling price or gross value in money of the articles so sold, bartered, exchanged, or transferred, such tax to be paid by the manufacturer or producer: Provided, That where the articles subject to tax under this section are manufactured out of materials likewise subject to tax under this section and section one hundred and eighty-nine, the total cost of such materials, as duly established, shall be deductible from the gross selling price or gross value in money of such manufactured articles.

"In the case of operators or proprietors of sawmills, who buy logs for the purpose of sawing and/or cutting them into lumber of standard sizes, the tax prescribed in this section shall be computed on thirty-three and one-third per centum of the gross cost of logs purchased during any given month intended for manufacture. Operators or proprietors of sawmills entitled to the privilege of paying the tax on thirty-three and one-third per centum of the gross cost of the logs purchased, including freight, insurance, and similar charges incurred up to the delivery to mill site, by them shall keep a complete record of their transactions, especially their purchase of logs together with the corresponding vouchers, such as official and auxiliary invoices, or the commercial invoices of the producers from whom they purchased the logs, in cases where the logs purchased constitute merely a portion of the logs covered by an official invoice, in which commercial invoices the assessment numbers of the official invoices covering the logs and the names and addresses of the vendors shall be indicated. They shall also keep a complete record of lumber purchased by them for resale."

SEC. 5. A new section between sections one hundred eighty-six and one hundred eighty-seven of the same Code, as amended, is inserted to read as follows:

"SEC. 186-A. Whenever a tax-free product is utilized in the manufacture or production of any article, in the determination of the value of such finished article, the value of such tax-free product shall be deducted."

SEC. 6. Section one hundred eighty-nine of the same Code, as amended by Republic Act Numbered Eight hundred twenty-two, is further amended to read as follows:

"SEC. 189. Percentage tax upon proprietors or operators of rope factories, sugar centrals, rice mills, coconut oil mills, corn mills and desiccated coconut factories.—Proprietors or operators of rope factories, sugar centrals, rice mills, coconut oil mills, corn mills, and desiccated coconut factories shall pay a tax equivalent to two per centum of the gross value in money of all the rope, sugar, rice, coconut oil, ground or milled corn, and desiccated coconut manufactured or milled by them, including the by-products of the raw materials from which said articles are produced or manufactured, such tax to be based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse: Provided, however, That this tax shall not apply to ropes, coconut oil, and the by-products of copra from which it is produced or manufactured, and desiccated coconuts, if such ropes, oil, copra by-products and desiccated coconuts shall be removed for exportation and are actually exported without returning to the Philippines, whether so exported in their original state, or as an ingredient or part of any manufactured article or product; and to rice, ground or milled corn, including the by-products of the raw materials from which they are produced or manufactured, produced or manufactured by proprietors or operators of rice and corn mills of sixteen horse-power or less.

"In case the raw materials are manufactured or milled in pursuance of a contract where the factory, central, or mill receives a share of the finished products, the tax on the share pertaining to the planter or owner of the raw-materials shall be charged to the planter or owner and withheld by the proprietor or operator of the factory, central, or mill and paid by him to the Collector of Internal Revenue.

"A proprietor or operator of a refined sugar factory shall be subject to the tax imposed by this section but shall be permitted to deduct from the actual selling price or market value of the refined sugar the total cost, as duly established, of the raw sugar upon which the tax under this section has previously been paid.
"Where articles are manufactured out of materials subject to tax under this section, the total cost, as duly established, of the said materials shall be deductible from the gross selling price or gross value in money of the manufactured articles."

SEC. 7. Section one hundred ninety-one of the same Code, as amended, is further amended to read as follows:

"SEC. 191. Percentage tax on road, building, irrigation, artesian well, waterworks, and other construction work contractors, proprietors or operators of dockyards, and others.—Road, building, irrigation, artesian well, waterworks, and other construction work contractors; filling contractors; demolition and salvage work contractors; arrastre contractors; persons engaged in the installation of gas or electric light, heat, or power; persons selling water, light, heat, or power, except those paying a franchise tax; proprietors or operators of dockyards, mine drilling apparatus, smelting plants, engraving plants, plating establishments, plastic lamination establishments, vulcanizing and recapping establishments; establishments for washing and/or greasing of motor vehicles, battery charging, planing or surfacing and recutting of lumber; sawmills under contract to saw and/or cut logs belonging to others; dry cleaning or dyeing establishments, steam laundries using washing machines; photographic studios, telephone or telegraph lines or exchanges, broadcasting or wireless stations; funeral parlors; shops for the construction or repair of bicycles or vehicles of any kind, mechanical devices, instruments, apparatus, or furniture of any kind, shoe repairing by machine or any mechanical contrivance, and tailor shops, beauty parlors, dressmakers, milliners, hatters, keepers of hotels, lodging houses, stevedores, warehousemen; plumbers; smiths; house or sign painters; lithographers, publishers, except those engaged in the publication or printing and publication of any newspaper, magazine, review or bulletin which appears at regular intervals, with fixed prices for subscription and sale, and which is not devoted principally to the publication of advertisements; printers and bookbinders; and other contractors, except those performing contracts for and/or with the Philippine Government, shall pay a tax equivalent to three per centum of their gross receipts. The term 'other contractors' includes all others not enumerated herein whose business consists essentially of the sale of service and manufacturers of embroidery and apparel for export, their agents and contractors.

"Keepers of restaurants, refreshment parlors and other eating places, and caterers, shall pay a tax of three per centum of their gross receipts. Keepers of bars and cafes where wines or liquors are served shall pay a tax of seven per centum of their gross receipts: Provided, however, That two sets of sales or commercial invoices or receipts serially numbered in duplicate shall be separately prepared and issued, one for each sale of food or refreshment served and another for each sale of wine or liquor served, the originals of which shall be issued to the purchaser or customer. Where the establishment is maintained within the premises of a cabaret or night club, or is accessible to patrons thereof by means of a connecting door or passage, the keeper of the establishment shall pay a tax of ten per centum, of the gross receipts."

SEC. 8. Section one hundred ninety-two of the same Code, as amended by Republic Act Numbered Thirty-nine, is further amended to read as follows:

"SEC. 192. Percentage tax on carriers and keepers of garages.—Keepers of garages, transportation contractors, persons who transport passengers or freight for hire, and common carriers by land, air, or water, except owners of bancas, and owners of animal-drawn two-wheeled vehicles, shall pay a tax equivalent to two per centum of their monthly gross receipts."

SEC. 9. Paragraph (s) of section one hundred ninety-four of the same Code, as amended by Republic Act Numbered Sixteen hundred twelve, is further amended to read as follows:

"(s) 'Real estate broker' includes any person, other than a real estate salesman as hereinafter defined, who for another, and for a compensation or in the expectation or promise of receiving compensation, (1) sells or offers for sale, buys or offers to buy, lists, or solicits for prospective purchasers, or negotiates the purchase, sale or exchange of real estate or interests therein; (2) or negotiates loans on real estate; (3) or leases or offers to lease or negotiates the sale, purchase or exchange of a lease, or rents or places for rent or collects rent from real estate or improvements thereon; (4) or shall be employed by or on behalf of the owner or owners of lots or other parcels of real estate at a stated salary, on commission, or otherwise, to sell such real estate or any parts thereof in lots or parcels. 'Real estate salesman' means any natural person regularly employed by a real estate broker to perform in behalf of such broker any or all of the functions of a real estate broker. One act of a character embraced within the above definition shall constitute the person performing or attempting to perform the same a real estate broker. But the foregoing definitions do not include a person who shall directly perform any of the acts aforesaid with reference to his own property, where such acts are performed in the regular course of or as an incident to the management of such property; nor shall they apply to persons acting pursuant to a duly executed power of attorney from the owner authorizing final consummation by performance of a contract conveying real estate by sale, mortgage or lease; nor shall they apply to any receiver, trustee or assignee in bankruptcy or insolvency, or to any person acting pursuant to the order of any court; nor to a trustee selling under a deed of trust. 'Real estate dealer’ includes any person engaged in the business of buying, selling, exchanging, leasing, or renting property as principal and holding himself out as a full or part-time dealer in real estate or as an owner of rental property or properties rented or offered to rent for an aggregate amount of four thousand pesos or more a year. Any person shall be considered as engaged in business as real estate dealer by the mere fact that he is the owner or sublessor of property rented or offered to rent for an aggregate amount of four thousand pesos or more a year: Provided, however, That an owner of sugar lands subject to tax under Commonwealth Act Numbered Five hundred and sixty-seven shall not be considered as a real estate dealer under this definition."

SEC. 10. Section one hundred ninety-five of the same Code is amended to read as follows:

"SEC. 195. Percentage tax on stock, real estate, commercial, customs and immigration brokers and cinematographic film owners, lessors, or distributors.—Stock, real estate, commercial, customs, and immigration brokers shall pay a percentage tax equivalent to six per centum of the gross compensation received by them. Cinematographic film owners, lessors, or distributors shall pay a percentage tax of two per centum of their gross receipts.

"The records kept by said brokers and cinematographic film owners, lessors or distributors may be used as evidence to determine the amount of the percentage tax due from them, and the Collector of Internal Revenue may assess and collect the tax due on the compensation or gross receipts earned in accordance with said records.

"In any case the amount of the compensation or gross monthly receipts of said brokers and cinematographic film owners, lessors, or distributors shall be declared for taxation within the time established for the other monthly reports of sales or receipts."

SEC. 11. Section two hundred eight of the same Code, as amended by Republic Act Numbered Sixteen hundred twelve, is further amended to read as follows:

"SEC. 208. Unlawful pursuit of business or occupation,— Any person who distills, rectifies, repacks, compounds, or manufactures any article subject to a specific tax, without having paid the privilege tax therefor as required by law, or who aids or abets in the conduct of illicit distilling, rectifying, repacking, compounding or illicit manufacture of any article subject to a specific tax shall, in addition to being liable for the payment of such tax, be punished by a fine of not less than two thousand pesos nor more than ten thousand pesos and imprisoned for a term of not less than six months nor more than six years; and all articles distilled, rectified, repacked, compounded or manufactured, and all personal property found at the distillery, repacking, rectifying, compounding, or manufacturing establishment or in any building, room, yard, or inclosure connected therewith and used with or constituting a part of the premises on which the distilling, repacking, rectifying, compounding, or manufacturing of said article is carried on, and all the right, title, and interest of such person in the lot or tract of land in which such distillery, repacking, rectifying, compounding, or manufacturing establishment is situated, and all the right, title, and interest therein of every person who knowingly or with negligence has suffered or permitted the business of a distiller, repacker, rectifier, compounder or manufacturer of any article subject to a specific tax to be there carried on or has connived at the same, shall be forfeited.

"In case of reincidence, the offender under the first paragraph hereof shall be punished by a fine of not less than five thousand pesos nor more than fifteen thousand pesos and imprisoned for not less than two years nor more than twelve years.

Any person who carries on any other business, or pursues any calling for which a fixed privilege tax is imposed without paying such tax as required by law or who aids or abets in the conduct of such business shall, in addition to being liable to,the payment of such tax, be punished by a fine of not exceeding one thousand pesos or by imprisonment for a term not exceeding six months, or both."

SEC. 12. Section thirty-five of the same Code, as amended, is further amended by adding a new paragraph to read as follows:

"(d) All capita] gains shall be exempt from the payment of any income tax provided that they shall be invested within one, year from the end of the year they are earned in new productive agricultural or industrial enterprises which are dollar-saving or dollar-producing."

SEC. 13. This Act shall take effect upon its approval.

Approved, June 22, 1957, except sections 6, 7, and 12.