Be It Enacted by The Senate and House of Representatives of The Philippines in Congress Assembled

Republic of the Philippines
Congress of the Philippines

Metro Manila
Fifteenth Congress
Third Regular Session
Begun and held in Metro Manila, on Monday, the twenty third day of July, two thousand twelve.
[REPUBLIC ACT NO. 10351]
AN ACT RESTRUCTURING THE EXCISE TAX ON ALCOHOL AND TOBACCO

PRODUCTS BY AMENDING SECTIONS 141, 142, 143, 144, 145, 8, 131 AND 288 OF
REPUBLIC ACT NO. 8424. OTHERWISE KNOWN AS THE NATIONAL INTERNAL
REVENUE CODE OF 1997, AS AMENDED BY REPUBLIC ACT NO. 9334, AND FOR
OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:
SECTION 1. Section 141 of the National Internal Revenue Code of 1997, as amended by
Republic Act No. 9334, is hereby further amended to read as follows:
“SEC. 141. Distilled Spirits. – On distilled spirits, subject to the provisions of Section 133 of this
Code, an excise tax shall be levied, assessed and collected based on the following schedules:
“(a) Effective on January 1, 2013
“(1) An ad valorem tax equivalent to fifteen percent (15%) of the net retail price (excluding the
excise tax and the value-added tax) per proof; and
“(2) In addition to the ad valorem tax herein imposed, a specific tax of Twenty pesos (P20.00)
per proof liter.
“(b) Effective on January 1, 2015
“(1) An ad valorem tax equivalent to twenty percent (20%) of the net retail price (excluding the
excise tax and the value-added tax) per proof; and
“(2) In addition to the ad valorem tax herein imposed, a specific tax of Twenty pesos (P20.00)
per proof liter.
“(c) In addition to the ad valorem tax herein imposed, the specific tax rate of Twenty pesos
(P20.00) imposed under this Section shall be increased by four percent (4%) every year
thereafter effective on January 1, 2016, through revenue regulations issued by the Secretary of
Finance.
“Medicinal preparations, flavoring extracts, and all other preparations, except toilet preparations,
of which, excluding water, distilled spirits form the chief ingredient, shall be subject to the same
tax as such chief ingredient.
“This tax shall be proportionally increased for any strength of the spirits taxed over proof spirits,
and the tax shall attach to this substance as soon as it is in existence as such, whether it be
subsequently separated as pure or impure spirits, or transformed into any other substance either
in the process of original production or by any subsequent process.
” ‘Spirits or distilled spirits’ is the substance known as ethyl alcohol, ethanol or spirits of wine,
including all dilutions, purifications and mixtures thereof, from whatever source, by whatever
process produced, and shall include whisky, brandy, rum, gin and vodka, and other similar
products or mixtures.
” ‘Proof spirits’ is liquor containing one-half (1/2) of its volume of alcohol of a specific gravity
of seven thousand nine hundred and thirty-nine ten thousandths (0.7939) at fifteen degrees
centigrade (15°C). A ‘proof liter’ means a liter of proof spirits.
” ‘Net retail price’ shall mean the price at which the distilled spirits is sold on retail in at least
five (5) major supermarkets in Metro Manila, excluding the amount intended to cover the
applicable excise tax and the value-added tax. For distilled spirits which are marketed outside
Metro Manila, the ‘net retail price’ shall mean the price at which the distilled spirits is sold in at
least five (5) major supermarkets in the region excluding the amount intended to cover the
applicable excise tax and the value-added tax.
“Major supermarkets, as contemplated under this Act, shall be those with the highest annual
gross sales in Metro Manila or the region, as the case may be, as determined by the National
Statistics Office, and shall exclude retail outlets or kiosks, convenience or sari-sari stores, and
others of a similar nature: Provided, That no two (2) supermarkets in the list to be surveyed are
affiliated and/or branches of each other: Provided, finally, That in case a particular distilled spirit
is not sold in major supermarkets, the price survey can be conducted in retail outlets where said
distilled spirit is sold in Metro Manila or the region, as the case may be, upon the determination
of the Commissioner of Internal Revenue.
“The net retail price shall be determined by the Bureau of Internal Revenue (B1R) through a
price survey under oath.
“The methodology and all pertinent documents used in the conduct of the latest price survey
shall be submitted to the Congressional Oversight Committee on the Comprehensive Tax Reform
Program created under Republic Act No. 8240.
“Understatement of the suggested net retail price by as much as fifteen percent (15%) of the
actual net retail price shall render the manufacturer or importer liable for additional excise tax
equivalent to the tax due and difference between the understated suggested net retail price and
the actual net retail price.
“Distilled spirits introduced in the domestic market after the effectivity of this Act shall be
initially taxed according to their suggested net retail prices.
” ‘Suggested net retail price’ shall mean the net retail price at which locally manufactured or
imported distilled spirits are intended by the manufacturer or importer to be sold on retail in
major supermarkets or retail outlets in Metro Manila for those marketed nationwide, and in other
regions, for those with regional markets. At the end of three (3) months from the product launch,
the Bureau of Internal Revenue shall validate the suggested net retail price of the new brand
against the net retail price as defined herein and initially determine the correct tax on a newly
introduced distilled spirits. After the end of nine (9) months from such validation, , the Bureau of
Internal Revenue shall revalidate the initially validated net retail price against the net retail price
as of the time of revalidation in order to finally determine the correct tax on a newly introduced
distilled spirits.
“All distilled spirits existing in the market at the time of the effectivity of this Act shall be taxed
according to the tax rates provided above based on the latest price survey of the distilled spirits
conducted by the Bureau of Internal Revenue.
“Manufacturers and importers of distilled spirits shall, within thirty (30) days from the effectivity
of this Act, and within the first five (5) days of every third month thereafter, submit to the
Commissioner a sworn statement of the volume of sales for each particular brand of distilled
spirits sold at his establishment for the three-month period immediately preceding.
“Any manufacturer or importer who, in violation of this Section, misdeclares or misrepresents in

his or its sworn statement herein required any pertinent data or information shall, upon final
findings by the Commissioner that the violation was committed, be penalized by a summary
cancellation or withdrawal of his or its permit to engage in business as manufacturer or importer
of distilled spirits.
“Any corporation, association or partnership liable for any of the acts or omissions in violation of
this Section shall be fined treble the amount of deficiency taxes, surcharges and interest which
may be assessed pursuant to this Section.
“Any person liable for any of the acts or omissions prohibited under this Section shall be
criminally liable and penalized under Section 254 of this Code. Any person who willfully aids or
abets in the commission of any such act or omission shall be criminally liable in the same
manner as the principal.
“If the offender is not a citizen of the Philippines, he shall be deported immediately after serving
the sentence, without further proceedings for deportation.”
SEC. 2. Section 142 of the National Internal Revenue Code of 1997, as amended by Republic
Act No. 9334, is hereby further amended to read as follows:
“SEC. 142. Wines. – On wines, there shall be collected per liter of volume capacity effective on
January 1, 2013, the following excise taxes:
“(a) Sparkling wines/champagnes regardless of proof, if the net retail price per bottle of seven
hundred fifty milliliter (750 ml.) volume capacity (excluding the excise tax and the value-added
tax) is:
“(1) Five hundred pesos (P500.00) or less -Two hundred fifty pesos (P250.00); and
“(2) More than Five hundred pesos (P500.00) – Seven hundred pesos (P700.00).
“(b) Still wines and carbonated wines containing fourteen percent (14%) of alcohol by volume or
less, Thirty pesos (P30.00); and
“(c) Still wines and carbonated wines containing more than fourteen percent (14%) but not more
than twenty-five percent (25%) of alcohol by volume, Sixty pesos (P60.00).
“The rates of tax imposed under this Section shall be increased by four percent (4%) every year
Finance.
“Fortified wines containing more than twenty-five percent (25%) of alcohol by volume shall be
taxed as distilled spirits. ‘Fortified wines’ shall mean natural wines to which distilled spirits are
added to increase their alcohol strength.
” ‘Net retail price’ shall mean the price at which sparkling wine/champagne is sold on retail in at
least five (5) major supermarkets in Metro Manila, excluding the amount intended to cover the
applicable excise tax and the value-added tax. For sparkling wines/champagnes which are
marketed outside Metro Manila, the ‘net retail price’ shall mean the price at which the wine is
sold in at least five (5) major supermarkets in the region excluding the amount intended to cover
the applicable excise tax and the value-added tax.
affiliated and/or branches of each other: Provided, finally, That in case a particular sparkling
wine/champagne is not sold in major supermarkets, the price survey can be conducted in retail
outlets where said sparkling wine/champagne is sold in Metro Manila or the region, as the case
may be, upon the determination of the Commissioner of Internal Revenue.
“The net retail price shall be determined by the Bureau of Internal Revenue through a price
survey under oath.
“Sparkling wines/champagnes introduced in the domestic market after the effectivity of this Act
shall be initially tax classified according to their suggested net retail prices.
imported sparkling wines/champagnes are intended by the manufacturer or importer to be sold
on retail in major supermarkets or retail outlets in Metro Manila for those marketed nationwide,
and in other regions, for those with regional markets. At the end of three (3) months from the
product launch, the Bureau of Internal Revenue shall validate the suggested net retail price of the
sparkling wine/champagne against the net retail price as defined herein and initially determine
the correct tax bracket to which a newly introduced sparkling wine/champagne shall be
classified. After the end of nine (9) months from such validation, the Bureau of Internal Revenue
shall revalidate the initially validated net retail price against the net retail price as of the time of
revalidation in order to finally determine the correct tax bracket to which a newly introduced
sparkling wine/champagne shall be classified.
“The proper tax classification of sparkling wines/champagnes, whether registered before or after
the effectivity of this Act, shall be determined every two (2) years from the date of effectivity of
this Act.
“All sparkling wines/champagnes existing in the market at the time of the effectivity of this Act
shall be classified according to the net retail prices and the tax rates provided above based on the
latest price survey of the sparkling wines/champagnes conducted by the Bureau of Internal
Revenue.
“Manufacturers and importers of wines shall, within thirty (30) days from the effectivity of this
Act, and within the first five (5) days of every month thereafter, submit to the Commissioner a
sworn statement of the volume of sales for each particular brand of wines sold at his
establishment for the three-month period immediately preceding.

findings by the Commissioner that the violation was committed be penalized by a summary
of wines.
“SEC. 143. Fermented Liquors. – There shall be levied, assessed and collected an excise tax on
beer, lager beer, ale, porter and other fermented liquors except tuba, basi, tapuy and similar
fermented liquors in accordance with the following schedule:
“Effective on January 1, 2013
“(a) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume
capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax shall be Fifteen pesos (P15.00)
per liter; and
“(b) If the net retail price (excluding the excise tax and the value-added tax) per liter of volume
capacity is more than Fifty pesos and sixty centavos (P50.60), the tax shall be Twenty pesos
(P20.00) per liter.
capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax shall be Seventeen pesos
(P17.00) per liter; and
capacity is more than Fifty pesos and sixty centavos (P50.60), the tax shall be Twenty-one pesos
(P21.00) per liter.

capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax shall be Nineteen pesos
capacity is more than Fifty pesos and sixty centavos (P50.60), the tax shall be Twenty-two pesos
(P22.00) per liter.
capacity is Fifty pesos and sixty centavos (P50.60) or less, the tax shall be Twenty-one pesos
capacity is more than Fifty pesos and sixty centavos (P50.60), the tax shall be Twenty-three
pesos (P23.00) per liter.
“Effective on January 1, 2017, the tax on all fermented liquors shall be Twenty-three pesos and
fifty centavos (P23.50) per liter.
“The rates of tax imposed under this Section shall be increased by four percent (4%) every year
Finance. However, in case of fermented liquors affected by the ‘no downward reclassification’
provision prescribed under this Section, the four percent (4%) increase shah apply to their
respective applicable tax rates.
“Fermented liquors which are brewed and sold at micro-breweries or small establishments such
as pubs and restaurants shall be subject to the rate of Twenty-eight pesos (P28.00) per liter
effective on January 1, 2013: Provided, That this rate shall be increased by four percent (4%)
every year thereafter effective on January 1, 2014, through revenue regulations issued by the
Secretary of Finance.
“Fermented liquors introduced in the domestic market after the effectivity of this Act shall be
initially tax classified according to their suggested net retail prices.
imported fermented liquor are intended by the manufacturer or importer to be sold on retail in
major supermarkets or retail outlets in Metro Manila for those marketed nationwide, and in other
the Bureau of Internal Revenue shall validate the suggested net retail price of the newly
introduced fermented liquor against the net retail price as defined herein and initially determine
the correct tax bracket to which a newly introduced fermented liquor, as defined above, shall be
classified. After the end of nine (9) months from such validation, the Bureau of Internal Revenue
shall revalidate the initially validated net retail price against the net retail price as of the time of
revalidation in order to finally determine the correct tax bracket which a newly introduced
fermented liquor shall be classified.
” ‘Net retail price’ shall mean the price at which the fermented liquor is sold on retail in at least
five (5) major supermarkets in Metro Manila (for brands of fermented liquor marketed
nationally), excluding the amount intended to cover the applicable excise tax and the value-
added tax. For brands which are marketed outside Metro Manila, the ‘net retail price’ shall mean
the price at which the fermented liquor is sold in at least five (5) major supermarkets in the
region excluding the amount intended to cover the applicable excise tax and the value-added tax.
affiliated and/or branches of each other: Provided, finally, That in case a particular fermented
liquor is not sold in major supermarkets, the price survey can be conducted in retail outlets where
said fermented liquor is sold in Metro Manila or the region, as the case may be, upon the
determination of the Commissioner of Internal Revenue.
“The net retail price shall be determined by the Bureau of Internal Revenue (BIR) through a
price survey under oath.
“Any downward reclassification of present categories, for tax purposes, of fermented liquors
duly registered at the time of the effectivity of this Act which will reduce the tax imposed herein,
or the payment thereof, shall be prohibited.
“The proper tax classification of fermented liquors, whether registered before or after the
effectivity of this Act, shall be determined every two (2) years from the date of effectivity of this
Act.
“All fermented liquors existing in the market at the time of the effectivity of this Act shall be
classified according to the net retail prices and the tax rates provided above based on the latest
price survey of the fermented liquors conducted by the Bureau of Internal Revenue.
“Every brewer or importer of fermented liquor shall, within thirty (30) days from the effectivity
of this Act, and within the first five (5) days of every month thereafter, submit to the
Commissioner a sworn statement of the volume of sales for each particular brand of fermented
liquor sold at his establishment for the three-month period immediately preceding.
“Any brewer or importer who, in violation of this Section, misdeclares or misrepresents in his or
its sworn statement herein required any pertinent data or information shall, upon final findings
by the Commissioner that the violation was committed, be penalized by a summary cancellation
or withdrawal of his or its permit to engage in business as brewer or importer of fermented
liquor.
“SEC. 144. Tobacco Products. – There shall be collected an excise tax of One peso and seventy-
five centavos (P1.75) effective on January 1, 2013 on each kilogram of the following products of
tobacco:
“(a) Tobacco twisted by hand or reduced into a condition to be consumed in any manner other
than the ordinary mode of drying and curing;
“(b) Tobacco prepared or partially prepared with or without the use of any machine or
instruments or without being pressed or sweetened except as otherwise provided hereunder; and
“(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of tobacco
except as otherwise provided hereunder.
“Stemmed leaf tobacco, tobacco prepared or partially prepared with or without the use of any
machine or instrument or without being pressed or sweetened, fine-cut shorts and refuse, scraps,
clippings, cuttings, stems, midribs, and sweepings of tobacco resulting from the handling or
stripping of whole leaf tobacco shall be transferred, disposed of, or otherwise sold, without any
prepayment of the excise tax herein provided for, if the same are to be exported or to be used in
the manufacture of cigars, cigarettes, or other tobacco products on which the excise tax will
eventually be paid on the finished product, under such conditions as may be prescribed in the
rules and regulations promulgated by the Secretary of Finance, upon recommendation of the
Commissioner.
“On tobacco specially prepared for chewing so as to be unsuitable for use in any other manner,
on each kilogram, One peso and fifty centavos (P1.50) effective on January 1, 2013.
“The rates of tax imposed under this Section shall be increased by four percent. (4%) every year
Finance.
“No tobacco products manufactured in the Philippines and produced for export shall be removed
from their place of manufacture or exported without posting of an export bond equivalent to the
amount of the excise tax due thereon if sold domestically: Provided, however, That tobacco
products for export may be transferred from the place of manufacture to a bonded facility, upon
posting of a transfer bond, prior to export.
“Tobacco products imported into the Philippines and destined for foreign countries shall not be
allowed entry without posting a bond equivalent to the amount of customs duty, excise and
value-added taxes due thereon if sold domestically.
“Manufacturers and importers of tobacco products shall, within thirty (30) days from the
effectivity of this Act, and within the first five (5) days of every month thereafter, submit to the
Commissioner a sworn statement of the volume of sales for each particular brand of tobacco
products sold for the three-month period immediately preceding.
“Any manufacturer or importer who, in violation of this Section, misdeclares or misrepresents hi

of cigars or cigarettes.
“SEC. 145. Cigars and Cigarettes. –
“(A) Cigars. – There shall be levied, assessed and collected on cigars an excise tax in accordance
with the following schedule:
“(1) Effective on January 1, 2013
“(a) An ad valorem tax equivalent to twenty percent (20%) of the net retail price (excluding the
excise tax and the value-added tax) per cigar; and
“(b) In addition to the ad valorem tax herein imposed, a specific tax of Five pesos (P5.00) per
cigar.
“(2) In addition to the ad valorem tax herein imposed, the specific tax rate of Five pesos (P5.00)
imposed under this subsection shall be increased by four percent (4%) effective on January 1,
2014 through revenue regulations issued by the Secretary of Finance.
“(B) Cigarettes Packed by Hand. – There shall be levied, assessed and collected on cigarettes
packed by hand an excise tax based on the following schedules:
“Effective on January 1, 2013, Twelve pesos (P12.00) per pack;
“Effective on January 1, 2014, Fifteen pesos (P15.00) per pack;
“Effective on January 1, 2015, Eighteen pesos (P18.00) per pack;
“Effective on January 1, 2016, Twenty-one pesos (P21.00) per pack; and
“Effective on January 1, 2017, Thirty pesos (P30.00) per pack.
“The rates of tax imposed under this subsection shall be increased by four percent (4%) every
year* effective on January 1, 2018, through revenue regulations issued by the Secretary of
Finance.
“Duly registered cigarettes packed by hand shall only be packed in twenties and other packaging
combinations of not more than twenty.
” ‘Cigarettes packed by hand’ shall refer to the manner of packaging of cigarette sticks using an
individual person’s hands and not through any other means such as a mechanical device,
machine or equipment.
“(C) Cigarettes Packed by Machine. – There shall be levied, assessed and collected on cigarettes
packed by machine a tax at the rates prescribed below:

“(1) If the net retail price (excluding the excise tax and the value-added tax) is Eleven pesos and
fifty centavos (P11.50) and below per pack, the tax shall be Twelve pesos (P12.00) per pack; and
“(2) If the net retail price (excluding the excise tax and the value-added tax) is more than Eleven
pesos and fifty centavos (P11.50) per pack, the tax shall be Twenty-five pesos (P25.00) per pack.
fifty centavos (P11.50) and below per pack, the tax shall be Seventeen pesos (P17.00) per pack;
and
pesos and fifty centavos (P11.50) per pack, the tax shall be Twenty-seven pesos (P27.00) per
pack.
fifty centavos (P11.50) and below per pack, the tax shall be Twenty-one pesos (P21.00) per pack;
and
pesos and fifty centavos (P11.50) per pack, the tax shall be Twenty-eight pesos (P28.00) per
pack.
fifty centavos (P11.50) and below per pack, the tax shall be Twenty-five pesos (P25.00) per
pack; and
pesos and fifty centavos (P11.50) per pack, the tax shall be Twenty-nine pesos (P29.00) per
pack.
“Effective on January 1, 2017, the tax on all cigarettes packed by machine shall be Thirty pesos
(P30.00) per pack.
“The rates of tax imposed under this subsection shall be increased by four percent (4%) every
year thereafter effective on January 1, 2018, through revenue regulations issued by the Secretary
of Finance.
“Duly registered cigarettes packed by machine shall only be packed in twenties and other
packaging combinations of not more than twenty.
“Cigarettes introduced in the domestic market after the effectivity of this Act shall be initially tax
classified according to their suggested net retail prices.
imported cigarettes are intended by the manufacturer or importer to be sold on retail in major
supermarkets or retail outlets in Metro Manila for those marketed nationwide, and in other
the Bureau of Internal Revenue shall validate the suggested net retail price of the newly
introduced cigarette against the net retail price as defined herein and initially determine the
correct tax bracket under which a newly introduced cigarette shall be classified. After the end of
nine (9) months from such validation, the Bureau of Internal Revenue shall revalidate the
initially validated net retail price against the net retail price as of the time of revalidation in order
to finally determine the correct tax bracket under which a newly introduced cigarette shall be
classified.
” ‘Net retail price’ shall mean the price at which the cigarette is sold on retail in at least five (5)
major supermarkets in Metro Manila (for brands of cigarettes marketed nationally), excluding
the amount intended to cover the applicable excise tax and the value-added tax. For cigarettes
which are marketed only outside Metro Manila, the ‘net retail price’ shah mean the price at
which the cigarette is sold in at least five (5) major supermarkets in the region excluding the
amount intended to cover the applicable excise tax and the value-added tax.
affiliated and/or branches of each other: Provided, finally, That in case a particular cigarette is
not sold in major supermarkets, the price survey can be conducted in retail outlets where said
cigarette is sold in Metro Manila or the region, as the case may be, upon the determination of the
Commissioner of Internal Revenue.
“The net retail price shall be determined by the Bureau of Internal Revenue through a price
survey under oath.
“The proper tax classification of cigarettes, whether registered before or after the effectivity of
this Act, shall be determined every two (2) years from the date of effectivity of this Act.
“All cigarettes existing in the market at the time of the effectivity of this Act shall be classified
according to the net retail prices and the tax rates provided above based on the latest price survey
of cigarettes conducted by the Bureau of Internal Revenue.
“No tobacco products manufactured in the Philippines and produced for export shall be removed
from their place of manufacture or exported without posting of an export bond equivalent to the
amount of the excise tax due thereon if sold domestically: Provided, however, That tobacco
products for export may be transferred from the place of manufacture to a bonded facility, upon
posting of a transfer bond, prior to export.
“Tobacco products imported into the Philippines and destined for foreign countries shall not be
allowed entry without posting a bond equivalent to the amount of customs duty, excise and
value-added taxes due thereon if sold domestically.
“Of the total volume of cigarettes sold in the country, any manufacturer and/or seller of tobacco
products must procure at least fifteen percent (15%) of its tobacco leaf raw material requirements
from locally grown sources, subject to adjustments based on international treaty commitments.
“Manufacturers and importers of cigars and cigarettes shall, within thirty (30) days from the
effectivity of this Act and within the first five (5) days of every month thereafter, submit to the
Commissioner a sworn statement of the volume of sales for cigars and/or cigarettes sold for the
three-month period immediately preceding.

of cigars or cigarettes.
this Section shall be fined treble the aggregate amount of deficiency taxes, surcharges and
interest which may be assessed pursuant to this Section.
SEC. 6. Section 8 of Republic Act No. 8424 or the National Internal Revenue Code, as amended,
is hereby further amended to read as follows:
“SEC. 8. Duty of the Commissioner to Ensure the Provision and Distribution of Forms, Receipts,
Certificates, and Appliances, and the Acknowledgment of Payment of Taxes. –
“(A) Provision and Distribution to Proper-Officials. – Any law to the contrary notwithstanding,
it shah be the duty of the Commissioner, among other things, to prescribe, provide, and distribute
to the proper officials the requisite licenses; internal revenue stamps; unique, secure and
nonremovable identification markings (hereafter called unique identification markings), such as
codes or stamps, be affixed to or form part of all unit packets and packages and any outside
packaging of cigarettes and bottles of distilled spirits; labels and other forms; certificates; bonds;
records; invoices; books; receipts; instruments; appliances and apparatus used in administering
the laws falling within the jurisdiction of the Bureau. For this purpose, internal revenue stamps,
or other markings and labels shall be caused by the Commissioner to be printed with adequate
security features.
“Internal revenue stamps, whether of a bar code or fuson design, or other markings shall be
firmly and conspicuously affixed or printed on each pack of cigars and cigarettes and bottles of
distilled spirits subject to excise tax in the manner and form as prescribed by the Commissioner,
upon approval of the Secretary of Finance.
“To further improve tax administration,’ cigarette and alcohol manufacturers shall be required to
install automated volume-counters of packs and bottles to deter over-removals and
misdeclaration of removals.”
SEC. 7. Section 131, Subsection A of the National Internal Revenue Code of 1997, as amended
by Republic Act No. 9334, is hereby further amended as follows:
“SEC. 131. Payment of Excise Taxes on. Imported Articles. –
“x x x
“The provision of any special or general law to the contrary notwithstanding, the importation of
cigars and cigarettes distilled spirits, fermented liquors and wines into the Philippines, even if
destined for tax and duty-free shops, shall be subject to all applicable taxes, duties, charges,
including excise taxes due thereon. This shall apply to cigars and cigarettes, distilled spirits,
fermented liquors and wines brought directly into the duly chartered or legislated freeports of the
Subic Special Economic and Freeport Zone, created under Republic Act No. 7227; the Cagayan
Special Economic Zone and Freeport, created under Republic Act No. 7922; and the Zamboanga
City Special Economic Zone, created under Republic Act No. 7903, and such other freeports as
may hereafter be established or created by law: Provided, further, That notwithstanding the
provisions of Republic Act Nos. 9400 and 9593, importations of cigars and cigarettes, distilled
spirits, fermented liquors and wines made directly by a government-owned and operated duty-
free shop, like the Duty-Free Philippines (DFP), shall be exempted from all applicable duties
only: x x x
“x x x
“Articles confiscated shall be destroyed using the most environmentally friendly method
available in accordance with the rules and regulations to be promulgated by the Secretary of
Finance, upon recommendation of the Commissioners of Customs and Internal Revenue.
“x x x.”
SEC. 8. Section 288, subsections (B) and (C) of the National Internal Revenue Code of 1997, as
amended by Republic Act No. 9334, is hereby further amended to read as follows:
“(B) Incremental Revenues from Republic Act No. 8240. – Fifteen percent (15%) of the
incremental revenue collected from the excise tax on tobacco products under R. A. No. 8240
shall be allocated and divided among the provinces producing burley and native tobacco in
accordance with the volume of tobacco leaf production. The fund shall be exclusively utilized for
programs to promote economically viable alternatives for tobacco farmers and workers such as:
“(1) Programs that will provide inputs, training, and other support for tobacco farmers who shift
to production of agricultural products other than tobacco including, but not limited to, high-value
crops, spices, rice, corn, sugarcane, coconut, livestock and fisheries;
“(2) Programs that will provide financial support for tobacco farmers who are displaced or who
cease to produce tobacco;
“(3) Cooperative programs to assist tobacco farmers in planting alternative crops or

implementing other livelihood projects;
“(4) Livelihood programs and projects that will promote, enhance, and develop the tourism
potential of tobacco-growing provinces;
“(5) Infrastructure projects such as farm to market roads, schools, hospitals, and rural health
facilities; and
“(6) Agro-industrial projects that will enable tobacco farmers to be involved in the management
and subsequent ownership of projects, such as post-harvest and secondary processing like
cigarette manufacturing and by-product utilization.
“The Department of Budget and Management, in consultation with the Department of

Agriculture, shall issue rules and regulations governing the allocation and disbursement of this
fund, not later than one hundred eighty (] 80) days from the effectivity of this Act.
“(C) Incremental Revenues from the Excise Tax on Alcohol and Tobacco Products. –
“After deducting the allocations under Republic Act Nos. 7171 and 8240, eighty percent (80%)
of the remaining balance of the incremental revenue derived from this Act shall be allocated for
the universal health care under the National Health Insurance Program, the attainment of the
millennium development goals and health awareness programs; and twenty percent (20%) shall
be allocated nationwide, based on political and district subdivisions, for medical assistance and
health enhancement facilities program, the annual requirements of which shall be determined by
the Department of Health (DOH).”
SEC. 9. Transitory Provision. – A special financial support for displaced workers in the alcohol
and tobacco industries shall be allocated and included in the appropriations under the
Department of Labor and Employment (DOLE) to finance unemployment alleviation program;
and to the Technical Education and Skills Development Authority (TESDA) to finance the
training and retooling programs of displaced workers, to be included in the General
Appropriations Acts for the Fiscal Years 2014 to 2017.
SEC. 10. Annual Report. – The Department of Budget and Management (DBM), the Department
of Agriculture (DA), the Department of Health (DOH) and the Philippine Health Insurance
Corporation (PhilHealth) shall each submit to the Oversight Committee, created under Republic
Act No. 8240, a detailed report on the expenditure of the amounts earmarked in this Section on
the first week of August of every year. The reports shall be simultaneously published in
the Official Gazette and in the agencies’ websites.
SEC. 11. Congressional Oversight Committee. – The composition of the Congressional

Oversight Committee, created under Republic Act No. 8240, shall include the Agriculture and
Health Committee Chairpersons of the Senate and the House of Representatives as part of the
four (4) members to be appointed from each House.
Upon receipt of the annual reports from the DBM, DA, DOH, DOLE, PhilHealth and TESDA,
the Committee shall review and ensure the proper implementation of this Act as regards the
expenditures of the earmarked funds.
Starting the third quarter of Calendar Year 2016, the Committee is mandated to review the
impact of the tax rates provided under this Act.
SEC. 12. Implementing Rules and Regulations. – The Secretary of Finance shall, upon the
recommendation of the Commissioner of Internal Revenue, and in consultation with the
Department of Health, promulgate the necessary rules and regulations for the effective
implementation of this Act not later than one hundred eighty (180) days upon the effectivity of
this Act.
SEC. 13. Separability Clause. – If any of the provisions of this Act is declared invalid by a
competent court, the remainder of this Act or any provision not affected by such declaration of
invalidity shall remain in force and effect.
SEC. 14. Repealing Clause. – All laws, decrees ordinances, rules and regulations, executive
or administrative orders and such other presidential issuances that are inconsistent with any of
the provisions of this Act are hereby repealed, amended or otherwise modified accordingly.
SEC. 15. Effectivity. – This Act shall take effect upon its publication in a newspaper of general
circulation.
Approved,
(Sgd.) FELICIANO BELMONTE JR.

(Sgd.) JUAN PONCE ENRILE Speaker of the House
President of the Senate of Representatives
This Act which is a consolidation of House Bill No. 5727 and Senate Bill No. 3299 was finally
passed by the House of Representatives and the Senate on December 11, 2012.
Approved: DEC 19 2012
(Sgd.) MARILYN B. BARUA-YAP

(Sgd.) EMMA LIRIO-REYES Secretary General
Secretary of the Senate House of Representatives
(Sgd.) BENIGNO S. AQUINO III

President of the Philippines
Congress of the Philippines
Metro Manila
Thirteenth Congress
First Regular Session
Begun and held in Metro Manila, on Monday, the twenty-sixth day of July, two thousand four.
Republic Act No. 9334
AN ACT INCREASING THE EXCISE TAX RATES IMPOSED ON ALCOHOL AND

TOBACCO PRODUCTS, AMENDING FOR THE PURPOSE SECTIONS 131,141, 142,
143, 144, 145 AND 288 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED"

assembled:
SECTION 1. Section 141 of the National Internal Revenue Code of 1997, as amended, is hereby
further amended to read as follows:
"SEC. 141. Distilled Spirits. - On distilled spirits, there shall be collected, subject to the
provisions of Section 133 of this Code, excise tax as follows:
"(a) If produced from the sap of nipa, coconut, cassava, camote, or buri palm or
from the juice, syrup or sugar of the cane, provided such materials are produced
commercially in the country where they are processed into distilled spirits, per
proof liter, Eleven pesos and sixty-five centavos (P11.65);
"(b) If produced from raw materials other than those enumerated in the preceding
paragraph, the tax shall be in accordance with the net retail price per bottle of
seven hundred fifty milliliter (750 ml.) volume capacity (excluding the excise tax
and the value-added tax) as follows:
"(1) Less than Two hundred and fifty pesos (P250.00) - One hundred
twenty-six pesos (P126.00), per proof liter;
"(2) Two hundred and fifty pesos (P250.00) up to Six hundred and
seventy-five pesos (P675.00) - Two hundred fifty-two pesos (P252.00),
per proof liter; and
"(3) More than Six hundred and seventy five pesos (P675.00) -Five
hundred four pesos (P504.00), per proof liter.
"(c) Medicinal preparations, flavoring extracts, and all other preparations, except
toilet preparations, of which, excluding water, distilled spirits form the chief
ingredient, shall be subject to the same tax as such chief ingredient.
"This tax shall be proportionally increased for any strength of the spirits taxed over proof
spirits, and the tax shall attach to this substance as soon as it is in existence as such,
whether it be subsequently separated as pure or impure spirits, or transformed into any
other substance either in the process of original production or by any subsequent process.
"'Spirits or distilled spirits' is the substance known as ethyl alcohol, ethanol or

spirits of wine, including all dilutions, purifications and mixtures thereof, from
whatever source, by whatever process produced, and shall indlude whisky,
brandy, rum, gin and vodka, and other similar products or mixtures.
"'Proof spirits' is liquor containing one-half (1/2) of its volume of alcohol of a

specific gravity of seven thousand nine hundred and thirty-nine ten thousandths
(0.7939) at fifteen degrees centigrade (150C). A 'proof liter' means a liter of proof
spirits.
"'Net retail price', as determined by the Bureau of Internal Revenue through a

price survey to be conducted by the Bureau of Internal Revenue itself, or by the
National Statistics Office when deputized for the purpose by the Bureau of
Internal Revenue, shall mean the price at which the distilled spirits is sold on
retail in at least ten (10) major supermarkets in Metro Manila, excluding the
amount intended to cover the applicable excise tax and the value-added tax. For
brands which are marketed outside Metro Manila, the 'net retail price' shall mean
the price at which the distilled spirits is sold in at least five (5) major
supermarkets in the region excluding the amount intended to cover the applicable
excise tax and the value-added tax.
"Variants of existing brands and variants of new brands which are introduced in the
domestic market after the effectivity of this Act shall be taxed under the proper
classifcation thereof based on their suggested net retail price: Provided, however, That
such classification shall not, in any case, be lower than the highest classification of any
variant of that brand.
"A 'variant of a brand' shall refer to a brand on which a modifier is prefixed and/or
suffixed to the root name of the brand.
"New brands, as defined in the immediately following paragraph, shall initially be

classified according to their suggested net retail price.
"Willful understatement of the suggested net retail price by as much as fifteen percent
(15%) of the actual net retail price shall render the manufacturer liable for additional
excise tax equivalent to the tax due and difference between the understated suggested net
retail price and the actual net retail price.
"'New brand' shall mean a brand registered after the date of effectivity of R.A.
No. 8240.
"'Suggested net retail price' shall mean the net retail price at which new brands, as
defined above, of locally manufactured or imported distilled spirits are intended
by the manufacturer or importer to be sold on retail in major supermarkets or
retail outlets in Metro Manila for those marketed nationwide, and in other regions,
for those with regional markets. At the end of three (3) months from the product
launch, the Bureau of Internal Revenue shall validate the suggested net retail price
of the new brand against the net retail price as defined herein and determine the
correct tax bracket to which a particular new brand of distilled spirits, as defined
above, shall be classified. After the end of eighteen (18) months from such
validation, the Bureau of Internal Revenue shall revalidate the initially validated
net retail price against the net retail price as of the time of revalidation in order to
finally determine the correct tax bracket which a particular new brand of distilled
spirits shall be classified: Provided, however, That brands of distilled spirits
introduced in the domestic market between January 1, 1997 and December 31,
2003 shall remain in the classification under which the Bureau of Internal
Revenue has determined them to belong as of December 31, 2003. Such
classification of new brands and brands introduced between January 1, 1997 and
December 31, 2003 shall not be revised except by an act of Congress.
"The rates of tax imposed under this Section shall be increased by eight percent (8%)
every two years starting on January 1, 2007 until January 1, 2011.
"Any downward reclassification of present categories, for tax purposes, of existing

brands of distilled spirits duly registered at the time of the effectivity of this Act which
will reduce the tax imposed herein, or the payment thereof, shall be prohibited.
"The classification of each brand of distilled spirits based on the average net retail price
as of October 1, 1996, as set forth in Annex 'A', including the classification of brands for
the same products which, although not set forth in said Annex'A', were registered and
were being commercially produced and marketed on or after October 1,1996, and which
continue to be commercially produced and marketed after the effectivity of this Act, shall
remain in force until revised by Congress.
"Manufacturers and importers of distilled spirits shall, within thirty (30) days from the
effectivity of this Act, and within the first five (5) days of every third month thereafter,
submit to the Commissioner a sworn statement of the volume of sales for each particular
brand of distilled spirits sold at his establishment for the three-month period immediately
preceding.
"Any manufacturer or importer who, in violation of this Section, knowingly misdeclares
or misrepresents in his or its sworn statement herein required any pertinent data or
information shall, upon final findings by the Commissioner that the violation was
committed, be penalized by a summary cancellation or withdrawal of his or its permit to
engage in business as manufacturer or importer of distilled spirits.
"Any corporation, association or partnership liable for any of the acts or omissions in
violation of this Section shall be fined treble the amount of deficiency taxes, surcharges
and interest which may be assessed pursuant to this Section.
"Any person liable for any of the acts or omissions prohibited under this Section shall be
criminally liable and penalized under Section 254 of this Code. Any person who willfully
aids or abets in the commission of any such act or omission shall be criminally liable in
the same manner as the principal.
"If the offender is not a citizen of the Philippines, he shall be deported immediately after
serving the sentence, without further proceedings for deportation."
SEC. 2. Section 142 of the National Internal Revenue Code of 1997, as amended, is hereby
"SEC 142. Wines. - On wines, there shall be collected per liter of volume capacity, the
following taxes:
"(a) Sparkling wines/champagnes regardless of proof, if the net retail price per
bottle (excluding the excise tax and the value-added tax) is:
"(1) Five hundred pesos (P500.00) or less - One hundred forty-five pesos
and sixty centavos (P145.60); and
"(2) More than Five hundred pesos (P500.00) - Four hundred thirty-six
pesos and eighty centavos (P436.80).
"(b) Still wines containing fourteen percent (14%) of alcohol by volume or less,
Seventeen pesos and forty-seven centavos (P17.47); and
"(c) Still wines containing more than fourteen percent (14%) but not more than
twenty-five percent (25%) of alcohol by volume, Thirty-four pesos and ninety-
four centavos (P34.94).
"Fortified wines containing more than twenty-five percent (25%) of alcohol by volume
shall be taxed as distilled spirits. 'Fortified wines' shall mean natural wines to which
distilled spirits are added to increase their alcohol strength.
"'Net retail price', as determined by the Bureau of Internal Revenue through a price
survey to be conducted by the Bureau of Internal Revenue itself, or by the National
Statistics Office when deputized for the purpose by the Bureau of Internal Revenue, shall
mean the price at which wine is sold on retail in at least ten (10) major supermarkets in
Metro Manila, excluding the amount intended to cover the applicable excise tax and the
value-added tax. For brands which are marketed outside Metro Manila, the 'net retail
price' shall mean the price at which the wine is sold in at least five (5) major
supermarkets in the region excluding the amount intended to cover the applicable excise
tax and the value-added tax.
classification thereof based on their suggested net retail price: Provided, however, That

"'New brand' shall mean a brand registered after the date of effectivity of R. A. No. 8240.
defined above, of locally manufactured or imported wines are intended by the
manufacturer or importer to be sold on retail in major supermarkets or retail outlets in
Metro Manila for those marketed nationwide, and in other regions, for those with
regional markets. At the end of three (3) months from the product launch, the Bureau of
Internal Revenue shall validate the suggested net retail price of the new brand against the
net retail price as defined herein and determine the correct tax bracket to which a
particular new brand of wine, as defined above, shall be classified. After the end of
eighteen (18) months from such validation, the Bureau of Internal Revenue shall
revalidate the initially validated net retail price against the net retail price as of the time
of revalidation in order to finally determine the correct tax bracket which a particular new
brand of wines shall be classified: Provided, however, That brands of wines introduced in
the domestic market between January 1, 1997 and December 31, 2003 shall remain in the
classification under which the Bureau of Internal Revenue has determined them to belong
as of December 31, 2003. Such classification of new brands and brands introduced
between January 1, 1997 and December 31, 2003 shall not be revised except by an act of
Congress.

brands of wines duly registered at the time of the effectivity of this Act which will reduce
the tax imposed herein, or the payment thereof, shall be prohibited.
"The classification of each brand of wines based on the average net retail price as of
October 1,1996, as set forth in Annex 'B', including the classification of brands for the
same products which, although not set forth in said "Annex B", were registered and were
being commercially produced and marketed on or after October 1, 1996, and which
"Manufacturers and importers of wines shall, within thirty (30) days from the effectivity
of this Act, and within the first five (5) days of every month thereafter, submit to the
Commissioner a sworn statement of the volume of sales for each particular brand of
wines sold at his establishment for the three-month period immediately preceding.

information shall, upon discovery, be penalized by a summary cancellation or withdrawal
of his or its permit to engage in business as manufacturer or importer of wines.
"SEC. 143. Fermented Liquors. - There shall be levied, assessed and collected an excise
tax on beer, lager beer, ale, porter and other fermented liquors except tuba, basi,
tupuy and similar fermented liquors in accordance with the following schedule:
"(a) If the net retail price (excluding the excise tax and the value-added tax) per
liter of volume capacity is less than Fourteen pesos and fifty centavos (P14.50),
the tax shall be Eight pesos and twenty- seven centavos (P8.27) per liter;
"(b) If the net retail price (excluding the excise tax and the value-added tax) per
liter of volume capacity is Fourteen pesos and fifty centavos (p14.50) up to
Twenty-two pesos (P22.00), the tax shall be Twelve pesos and thirty centavos
(P12.30) per liter;
"(c) If the net retail price (excluding the excise tax and the value-added tax) per
liter of volume capacity is more than Twenty-two pesos (P22.00), the tax shall be
Sixteen pesos and thirty-three centavos (P16.33) per liter.
classification thereof based on their suggested net retail price: Provided, however, That
"Fermented liquors which are brewed and sold at micro-breweries or small

establishments such as pubs and restaurants shall be subject to the rate in paragraph (e)
hereof.

"'New brand' shall mean a brand registered after the date of effectivity of R.A.
No. 8240.
defined above, of locally manufactured or imported fermented liquor are intended
by the manufacturer or importer to be sold on retail in major supermarkets or
retail outlets in Metro Manila for those marketed nationwide, and in other regions,
for those with regional markets. At the end of three (3) months from the product
launch, the Bureau of Internal Revenue shall validate the suggested net retail price
of the new brand against the net retail price as defined herein and determine the
correct tax bracket to which a particuIar new brand of fermented liquor, as
defined above, shall be classified. After the end of eighteen (18) months from
such validation, the Bureau of Interns Revenue shall revalidate the initially
validated net retail price against the net retail price as of the time of revalidation
in order to finally determine the correct tax bracket which a particular new brand
of fermented liquors shall he classified: Provided, however, That brands of
fermented liquors introduced in the domestic market between January 1, 1997 and
December 31, 2003 shall remain in the classification under which the Bureau of
Internal Revenue has determined them to belong as of December 31,2003. Such
classification of new brands and brands introduced between January 1, 1997 and
December 31, 2003 shall not be revised except by an act of Congress.
"'Net retail price', as determined by the Bureau of Internal Revenue through a

price survey to be conducted by the Bureau of Internal Revenue itself, or the
National Statistics Office when deputized for the purpose by the Bureau of
Internal Revenue, shall mean the price at which the fermented liquor is sold on
retail in at least twenty (20) major supermarkets in Metro Manila (for brands of
fermented liquor marketed nationally), excluding the amount intended to cover
the applicable excise tax and the value-added tax. For brands which are marketed
outside Metro Manila, the 'net retail price' shall mean the price at which the
fermented liquor is sold in at least five (5) major supermarkets in the region
excluding the amount intended to cover the applicable excise tax and the value-
added tax.
"The classification of each brand of fermented liquor based on its average net retail price
as of October 1, 1996, as set forth in Annex 'C', including the classification of brands for
the same products which, although not set forth in said Annex 'C', were registered and
were being commercially produced and marketed on or after October 1, 1996, and which

brands of fermented liquor duly registered at the time of the effectivity of this Act which
will reduce the tax imposed herein, or the payment thereof, shall be prohibited.
"Every brewer or importer of fermented liquor shall, within thirty (30) days from the
effectivity of this Act, and within the first five (5) days of every month thereafter, submit
to the Commissioner a sworn statement of the volume of sales for each particular brand
of fermented liquor sold at his establishment for the three-month period immediately
preceding.
"Any brewer or importer who, in violation of this Section, knowingly misdeclares or

misrepresents in his or its sworn statement herein required any pertinent data or
information shall be penalized by a summary cancellation or withdrawal of his or its
permit to engage in business as brewer or importer of fermented liquor.
"SEC. 144. Tobacco Products. - There shall be collected a tax of One peso (P1.00) on
each kilogram of the following products of tobacco:
"(a) Tobacco twisted by hand or reduced into a condition to be consumed in any

manner other than the ordinary mode of drying and curing;
"(b) Tobacco prepared or partially prepared with or without the use of any
machine or instruments or without being pressed or sweetened except as
otherwise provided hereunder; and
"(c) Fine-cut shorts and refuse, scraps, clippings, cuttings, stems and sweepings of
tobacco except as otherwise provided hereunder.
"Stemmed leaf tobacco, tobacco prepared or partially prepared with or without the use of
any machine or instrument or without being pressed or sweetened, fine-cut shorts and
refuse, scraps, clippings, cuttings, stems, midribs, and sweepings of tobacco resulting
from the handling or stripping of whole leaf tobacco shall be transferred, disposed of, or
otherwise sold, without any prepayment of the excise tax herein provided for, if the same
are to be exported or to be used in the manufacture of cigars, cigarettes, or other tobacco
products on which the excise tax will eventually be paid on the finished product, under
such conditions as may be prescribed in the rules and regulations promulgated by the
Secretary of Finance, upon recommendation of the Commissioner.
"On tobacco specially prepared for chewing so as to be unsuitable for use in any other
manner, on each kilogram, Seventy-nine centavos (P0.79).
"The rates of tax imposed under this Section shall be increased by six percent (6%) every
two years starting on January 1, 2007 until January 1, 2011.
"Manufacturers and importers of tobacco products shall, within thirty (30) days from the
effectivity of this Act, and within the first five (5) days of every month thereafter, submit
to the Commissioner a sworn statement of the volume of sales for each particular brand
of tobacco products sold at their establishment for the three-month period immediately
preceding.

of his or its permit to engage in business as manufacturer or importer of cigars or
cigarettes.
SEC. 5. Section 145 of the National Internal Revenue Code, as amended, is hereby further
amended to read as follows:
"SEC. 145. Cigars and Cigarettes. -
"(A) Cigars. - There shall be levied, assessed and collected on cigars an ad

valorem tax based on the net retail price per cigar (excluding the excise tax and
the value-added tax) in accordance with the following schedule:
"(1) If the net retail price per cigar is Five hundred pesos (P500.00) or
less, ten percent (10%); and
"(2) If the net retail price per cigar (excluding the excise tax and the value-
added tax) is more than Five hundred pesos (P500.00), Fifty pesos
(P50.00) plus fifteen percent (15%) of the net retail price in excess of Five
hundred pesos (P500.00).
"(B) Cigarettes Packed by Hand. - There shall be levied, assessed and collected on
cigarettes packed by hand a tax at the rates prescribed below:
"Effective on January 1, 2005, Two pesos (P2.00) per pack;
"Effective on January 1,2007, Two pesos and twenty-three centavos

(P2.23) per pack;
"Effective on January 1, 2009, Two pesos and forty-seven centavos

(P2.47) per pack; and
"Effective on January 1, 2011, Two pesos and seventy-two centavos

(P2.72) per pack.
"Duly registered or existing brands of cigarettes or new brands thereof packed by

hand shall only be packed in thirties.
"(C) Cigarettes Packed by Machine. - There shall be levied, assessed and
collected on cigarettes packed by machine a tax at the rates prescribed below:
"(1) If the net retail price (excluding the excise tax and the value-added
tax) is below Five pesos (P5.00) per pack, the tax shall be:
"Effective on January 1, 2005, Two pesos (P2.00) per pack;
"Effective on January 1, 2007, Two pesos and twenty-three

centavos (P2.23) per pack;
"Effective on January 1, 2009, Two pesos and forty-seven centavos

"Effective on January 1, 2011, Two pesos and seventy-two

centavos (P2.72) per pack.
tax) is Five pesos (P5.00) but does not exceed Six pesos and fifty centavos
(P6.50) per pack, the tax shall be:
"Effective on January 1, 2005, Six pesos and thirty-five centavos

(P6.35) per pack;
"Effective on January 1, 2007, Six pesos and seventy-four centavos

(P6.74) per pack;
"Effective on January 1, 2009, Seven pesos and fourteen centavos

"Effective on January 1, 2011, Seven pesos and fifty-six centavos

(P7.56) per pack.
tax) exceeds Six pesos and fifty centavos (P6.50) but doesnot exceed Ten
pesos (Pl0.00) per pack, the tax shall be:
"Effective on January 1, 2005, Ten pesos and thirty-five centavos

(P10.35) per pack;
"Effective on January 1, 2007, Ten pesos and eighty-eight centavos

(P10.88) per pack;
"Effective on January 1, 2009, Eleven pesos and forty-three

centavos (P11.43) per pack; and
"Effective on January 1, 2011, Twelve pesos (P12.00) per pack.
tax) is above Ten pesos (P10.00) per pack, the tax shall be:
"Effective on January 1, 2005, Twenty-five pesos (P25.00) per

pack;
"Effective on January 1, 2007, Twenty-six pesos and six centavos

(P26.06) per pack;
"Effective on January 1, 2009, Twenty-seven pesos and sixteen

centavos (P27.16) per pack; and
"Effective on January 1, 2011, Twenty-eight pesos and thirty

centavos (P28.30) per pack.
"Variants of existing brands and variants of new brands of cigarettes which are
introduced in the domestic market after the effectivity of this Act shall be taxed under the
proper classification thereof based on their suggested, net retail price: Provided,
however, That such classification shall not, in any case, be lower than the highest
classification of any variant of that brand.
"Duly registered or existing brands of cigarettes or new brands thereof packed by

machine shall only be packed in twenties.

brands of cigars and cigarettes duly registered at the time of the effectivity of this Act
which will reduce the tax imposed herein, or the payment thereof, shall be prohibited.

"'New brand' shall mean a brand registered after the date of effectivity of R.A. No. 8240.
defined above, of locally manufactured or imported cigarettes are intended by the
manufacturer or importer to be sold on retail in major supermarkets or retail outlets in
Metro Manila for those marketed nationwide, and in other regions, for those with
regional markets. At the end of three (3) months from the product launch, the Bureau of
Internal Revenue shall validate the suggested net retail price of the new brand against the
net retail price as defined herein and determine the correct tax bracket under which a
particular new brand of cigarette, as defined above, shall be classified. After the end of
eighteen (18) months from such validation, the Bureau of Internal Revenue shall
revalidate the initially validated net retail price against the net retail price as of the time
of revalidation in order to finally determine the correct tax bracket under which a
particular new brand of cigarettes shall be classified: Provided, however, That brands of
cigarettes introduced in the domestic market between January 1, 1997 and December 31,
2003 shall remain in the classification under which the Bureau of Internal Revenue has
determined them to belong as of December 31, 2003. Such classification of new brands
and brands introduced between January 1, 1997 and December 31, 2003 shall not be
revised except by an act of Congress.
"'Net retail price', as determined by the Bureau of Internal Revenue through a price
survey to be conducted by the Bureau of Internal Revenue itself, or the National Statistics
Office when deputized for the purpose by the Bureau of Internal Revenue, shall mean the
price at which the cigarette is sold on retail in at least twenty (20) major supermarkets in
Metro Manila (for brands of cigarettes marketed nationally), excluding the amount
intended to cover the applicable excise tax and the value-added tax. For brands which are
marketed only outside Metro Manila, the 'net retail price' shall mean the price at which
the cigarette is sold in at least five (5) major supermarkets in the region excluding the
amount intended to cover the applicable excise tax and the value-added tax.
"The classification of each brand of cigarettes based on its average net retail price as of
October 1, 1996, as set forth in Annex 'D', including the classification of brands for the
same products which, although not set forth in said Annex ID', were registered and were
being commercially produced and marketed on or after October 1, 1996, and which
"Manufacturers and importers of cigars and cigarettes shall, within thirty (30) days from
the effectivity of this Act and within the first five (5) days of every month thereafter,
submit to the Commissioner a sworn statement of the volume of sales for each particular
brand of cigars and/or cigarettes sold at his establishment for the three-month period
immediately preceding.

of his or its permit to engage in business as manufacturer or importer of cigars or
cigarettes.
violation of this Section shall be fined treble the aggregate amount of deficiency taxes,
surcharges and interest which may be assessed pursuant to this Section.
amended to read as follows:
"SEC. 131. Payment of Excise Taxes on Imported Articles. -
"(A) Persons Liable. - Excise taxes on imported articles shall be paid by the
owner or importer to the Customs Officers, conformably with the regulations of
the Department of Finance and before the release of such articles from the
customshouse, or by the person who is found in possession of articles which are
exempt from excise taxes other than those legally entitled to exemption.
"In the case of tax-free articles brought or imported into the Philippines by
persons, entities, or agencies exempt from tax which are subsequently sold,
transferred or exchanged in the Philippines to non-exempt persons or entities, the
purchasers or recipients shall be considered the importers thereof, and shall be
liable for the duty and internal revenue tax due on such importation.
"The provision of any special or general law to the contrary notwithstanding, the
importation of cigars and cigarettes, distilled spirits, fermented liquors and wines
into the Philippines, even if destined for tax and duty-free shops, shall be subject
to all applicable taxes, duties, charges, including excise taxes due thereon. This
shall apply to cigars and cigarettes, distilled spirits, fermented liquors and wines
brought directly into the duly chartered or legislated freeports of the Subic Special
Economic and Freeport Zone, created under Republic Act No. 7227; the Cagayan
Special Economic Zone and Freeport, created under Republic Act No. 7922; and
the Zamboanga City Special Economic Zone, created under Republic Act No.
7903, and such other freeports as may hereafter be established or created by
law: Provided, further, That importations of cigars and cigarettes, distilled spirits,
fermented liquors and wines made directly by a government-owned and operated
duty-free shop, like the Duty-Free Philippines (DFP), shall be exempted from all
applicable duties only: Provided, still further, That such articles directly imported
by a government-owned and operated duty-free shop, like the Duty-Free
Philippines, shall be labeled 'duty-free' and 'not for resale': Provided, finally, That
the removal and transfer of tax and duty-free goods, products, machinery,
equipment and other similar articles other than cigars and cigarettes, distilled
spirits, fermented liquors and wines, from one freeport to another freeport, shall
not be deemed an introduction into the Philippine customs territory."
"Cigars and cigarettes, distilled spirits and wines within the premises of all duty-
free shops which are not labelled as hereinabove required, as well as tax and duty-
free articles obtained from a duty-free shop and subsequently found in a non-duty-
free shop to be offered for resale shall be confiscated, and the perpetrator of such
non-labelling or re-selling shall be punishable under the applicable provisions of
this Code.
"Articles confiscated shall be disposed of in accordance with the rules and

regulations to be promulgated by the Secretary of Finance, upon recommendation
of the Commissioners of Customs and Internal Revenue, upon consultation with
the Secretary of Tourism and the General Manager of the Philippine Tourism
Authority.
"The tax due on any such goods, products, machinery, equipment or other similar
articles shall constitute a lien on the article itself, and such lien shall be superior to
all other charges or liens, irrespective of the possessor thereof.
"(B) Rate and Basis of the Excise Tax on Imported Articles. - Unless otherwise
specified, imported articles shall be subject to the same rates and basis of excise
taxes applicable to locally manufactured articles."
"SEC. 288. Disposition of Incremental Revenues. -
"(A) Incremental Revenues front Republic Act No. 7660. - The incremental
revenues from the increase in the documentary stamp taxes under R.A. No. 7660
shall be set aside for the following purposes.
"(1) In 1994 and 1995, twenty-five percent (25%) thereof respectively,

shall accrue to the Unified Home-Lending Program under Executive Order
No. 90 particularly for mass-socialized housing program to be allocated as
follows: fifty percent (50%) for mass-socialized housing; thirty percent
(30%) for the community mortgage program; and twenty percent (20%)
for land banking and development to be administered by the National
Housing Authority: Provided, That not more than one percent (1%) of the
respective allocations hereof shall be used for administrative expenses;
"(2) In 1996, twenty-five percent (25%) thereof to be utilized for the

National Health Insurance Program that hereafter may he mandated by
law;
"(3) In 1994 and every year thereafter, twenty-five percent (25%) thereof
shall accrue to a Special Education Fund to be administered by the
Department of Education, Culture and Sports for the construction and
repair of school facilities, training of teachers, and procurement or
production of instructional materials and teaching aids; and
"(4) In 1994 and every year thereafter, fifty percent (50%) thereof shall
accrue to a Special Infrastructure Fund for the construction and repair of
roads, bridges, dams and irrigation, seaports and hydroelectric and other
indigenous power projects: Provided, however, That for the years 1994
and 1995, thirty percent (30%), and for the years 1996, 1997 and 1998,
twenty percent (20%), of this fund shall be allocated for depressed
provinces as declared by the President as of the time of the effectivity of
R.A. No. 7660: Provided, further, That availments under this fund shall be
determined by the President on the basis of equity.
"Provided, finally, That in paragraphs (2), (3) and (4) of this Section, not more
than one percent (1%) of the allocated funds thereof shall be used for
administrative expenses by the implementing agencies.
"(B) Incremental Revenues from Republic Act No. 8240. - Fifteen percent (15%)
of the incremental revenue collected from the excise tax on tobacco products
under R.A. No. 8240 shall be allocated and divided among the provinces
producing burley and native tobacco in accordance with the volume of tobacco
leaf production. The fund shall be exclusively utilized for programs in pursuit of
the following objectives:
"(1) Cooperative projects that will enhance better quality of agricultural

products and increase income and productivity of farmers;
"(2) Livelihood projects, particularly the development of alternative

farming system to enhance farmer's income; and
"(3) Agro-industrial projects that will enable tobacco farmers to be

involved in the management and subsequent ownership of projects, such
as post-harvest and secondary processing like cigarette manufacturing and
by-product utilization.
"The Department of Budget and Management, in consultation with the Oversight

Committee created under said R.A. No. 8240, shall issue the corresponding rules
and regulations governing the allocation and disbursement of this fund.
"(C) Incremental Revenues from the Excise Tax on Alcohol and Tobacco
Products. -
"(1) Two and a half percent (2.5%) of the incremental revenue from the
excise tax on alcohol and tobacco products starting January 2005 shall be
remitted directly to the Philippine Health Insurance Corporation for the
purpose of meeting and sustaining the goal of universal coverage of the
National Health Insurance Program; and
"(2) Two and a half percent (2.5%) of the incremental revenue from the
excise tax on alcohol and tobacco products starting January 2005 shall be
credited to the account of the Department of Health and constituted as a
trust fund for its disease prevention program.
"The earmarking provided under this provision shall be observed for five (5)
years starting from January 2005."
SEC. 8. Implementing Rules and Regulations. - The Secretary of Finance shall, upon the
recommendation of the Commissioner of Internal Revenue, promulgate the necessary rules and
regulations for the effective implementation of this Act.
SEC. 9. Separability Clause. - If any of the provisions of this Act is declared invalid by a
competent court, the remainder of this Act or any provision not affected by such declaration of
invalidity shall remain in force and effect.
SEC. 10. Repealing Clause. - All laws, decrees, ordinances, rules and regulations, executive or
administrative orders, and such other presidential issuances as are inconsistent with any of the
provisions of this Act are hereby repealed, amended or otherwise modified accordingly.
SEC. 11. Effeetiuity. - This Act shall take effect on January 1, 2005.
Approved,
FRANKLIN DRILON JOSE DE VENECIA JR.

President of the Senate Speaker of the House of
Representatives
passed by the House of Representatives and the Senate on December 15, 2004 and December 16,
2004, respectively.
OSCAR G. YABES ROBERTO P. NAZARENO

Secretary of Senate Secretary General
House of Represenatives
Approved: December 21, 2004
GLORIA MACAPAGAL-ARROYO
Republic Act No. 9400
REPUBLIC ACT NO. 9400 [H. No 5064 & S. No 2260] – AN ACT AMENDING
REPUBLIC ACT NO. 7227, AS AMENDED, OTHERWISE KNOWN AS THE BASES
CONVERSION AND DEVELOPMENT ACT OF 1992, AND FOR OTHER PURPOSES
Begun and held in Metro Manila, on Monday, the Twenty-Fourth day of July, Two Thousand
Six.

assembled:
Section 1. Sec. 12 of Republic Act No. 7227, as amended, otherwise known as the
“Bases Conversion and Development Act of 1992”, is hereby amended to read as follows:
“Sec. 12. Subic Special Economic Zone. - x x x
“(a) x x x
“(b) The Subic Special Economic Zone shall be operated and managed as a separate customs
territory ensuring free flow or movement of goods and capital within, into and exported out of
the Subic Special Economic Zone, as well as provide incentives such as tax and duty-free
importations of raw materials, capital and equipment. However, exportation or removal of goods
from the territory of the Subic Special Economic Zone to the other parts of the Philippine
territory shall be subject to customs duties and taxes under the Tariff and Customs Code of the
Philippines, as amended, the National Internal Revenue Code of 1997, as amended, and other
relevant tax laws of the Philippines;
“(c) The provision of existing laws, rules and regulations to the contrary notwithstanding, no
national and local taxes shall be imposed within the Subic Special Economic Zone. In lieu of
said taxes, a five percent (5%) tax on gross income earned shall be paid by all business
enterprises within the Subic Special Economic Zone and shall be remitted as follows: three
percent (3%) to the National Government, and two percent (2%) to the Subic Bay Metropolitan
Authority (SBMA) for distribution to the local government units affected by the declaration of
and contiguous to the zone, namely: the City of Olongapo and the municipalities of Subic, San
Antonio, San Marcelino and Castillejos of the Province of Zambales; and the municipalities of
Morong, Hermosa and Dinalupihan of the Province of Bataan, on the basis of population (50%),
land area (25%), and equal sharing (25%).
“x x x.”
Sec. 2. Sec. 15 of Republic Act No. 7227, as amended, is hereby amended to read as follows:
“Sec. 15. Clark Special Economic Zone (CSEZ) and Clark Freeport Zone (CFZ). - Subject to the
concurrence by resolution of the local government units directly affected, the President is hereby
authorized to create by executive proclamation a Special Economic Zone covering the lands
occupied by the Clark Military reservations and its contiguous extensions as embraced, covered
and defined by the 1947 Military Bases Agreement between the Philippines and the United
States of America, as amended, located within the territorial jurisdiction of Angeles City,
municipalities of Mabalacat and Porac, Province of Pampanga, and the municipalities of Capas
and Bamban, Province of Tarlac, in accordance with the provision as herein provided insofar as
applied to the Clark Military reservations. The Clark Air Base proper with an area of not more
than four thousand four hundred hectares (4,400 has.), with the exception of the twenty-two-
hectare commercial area situated near the main gate and the Bayanihan Park consisting of seven
and a half hectares (7.5 has.) located outside the main gate of the Clark Special Economic Zone,
is hereby declared a freeport zone.
“The CFZ shall be operated and managed as a separate customs territory ensuring free flow or
movement of goods and capital equipment within, into and exported out of the CFZ, as well as
provide incentives such as tax and duty-free importation of raw materials and capital equipment.
However, exportation or removal of goods from the territory of the CFZ to the other parts of the
Philippine territory shall be subject to customs duties and taxes under the Tariff and Customs
Code of the Philippines, as amended, the National Internal Revenue Code of 1997, as amended,
and other relevant tax laws of the Philippines.
“The provisions of existing laws, rules and regulations to the contrary notwithstanding, no
national and local taxes shall be imposed on registered business enterprises within the CFZ. In
lieu of said taxes, a five percent (5%) tax on gross income earned shall be paid by all registered
business enterprises within the CFZ and shall be directly remitted as follows: three percent (3%)
to the National Government, and two percent (2%) to the treasurer's office of the municipality or
city where they are located.
“The governing body of the Clark Special Economic Zone shall likewise be established by
executive proclamation with such powers and functions exercised by the Export Processing Zone
Authority pursuant to Presidential Decree No. 66, as amended: Provided, That it shall have no
regulatory authority over public utilities, which authority pertains to the regulatory agencies
created by law for the purpose, such as the Energy Regulatory Commission created under
Republic Act No. 9136 and the National Telecommunications Commission created under
Republic Act No. 7925.
“xxx
“Subject to the concurrence by resolution of the local government units directly affected and
upon recommendation of the Philippine Economic Zone Authority (PEZA), the President is
hereby authorized to create by executive proclamation Special Economic Zones covering the
City of Balanga and the municipalities of Limay, Mariveles, Morong, Hermosa, and
Dinalupihan, Province of Bataan.
“Subject to the concurrence by resolution of the local government units directly affected and
upon recommendation of the PEZA, the President is hereby authorized to create by executive
proclamation Special Economic Zones covering the municipalities of Castillejos, San Marcelino,
and San Antonio, Province of Zambales.
“Duly registered business enterprises that will operate in the Special Economic Zones to be
created shall be entitled to the same tax and duty incentives as provided for under Republic Act
No. 7916, as amended: Provided, That for the purpose of administering these incentives, the
PEZA shall register, regulate, and supervise all registered enterprises within the Special
Economic Zones.”
Sec. 3. A new Sec. 15-A is hereby inserted, amending Republic Act No. 7227, as amended, to
read as follows:
“Sec. 15-A. Poro Point Freeport Zone (PPFZ). - The two hundred thirty-six and a half hectare
(236.5 has.) secured area in the Poro Point Special Economic and Freeport Zone created under
Proclamation No. 216, series of 1993, shall be operated and managed as a freeport and separate
customs territory ensuring free flow or movement of goods and capital equipment within, into
and exported out of the PPFZ. The PPFZ shall also provide incentives such as tax and duty-free
importation of raw materials and capital equipment. However, exportation or removal of goods
from the territory of the PPFZ to the other parts of the Philippine territory shall be subject to
customs duties and taxes under the Tariff and Customs Code of the Philippines, as amended, the
National Internal Revenue Code of 1997, as amended, and other relevant tax laws of the
Philippines.
“The provisions of existing laws, rules and regulations to the contrary notwithstanding, no
national and local taxes shall be imposed on registered business enterprises within the PPFZ. In
lieu of said taxes, a five percent (5%) tax on gross income earned shall be paid by all registered
business enterprises within the PPFZ and shall be directly remitted as follows: three percent (3%)
to the National Government, and two percent (2%) to the treasurer's office of the municipality or
city where they are located.
“The governing body of the PPFZ shall have no regulatory authority over public utilities, which
authority pertains to the regulatory agencies created by law for the purpose, such as the Energy
Regulatory Commission created under Republic Act No. 9136 and the National
Telecommunications Commission created under Republic Act No. 7925.”
Sec. 4. A new Sec. 15-B is hereby inserted, amending Republic Act No. 7227, as amended, to
read as follows:
“Sec. 15-B. Morong Special Economic Zone (MSEZ). - Duly registered business enterprises
operating within the MSEZ created under Proclamation No. 984, series of 1997, shall be entitled
to tax and duty-free importation of raw materials and capital equipment. In lieu of all national
and local taxes except real property tax on land, a five percent (5%) tax on gross income earned
shall be paid by all registered business enterprises which shall be directly remitted as follows:
three percent (3%) to the National Government, and two percent (2%) to the treasurer's office of
the municipality or city where they are located.”
Sec. 5. A new Sec. 15-C is hereby inserted, amending Republic Act No. 7227, as amended, to
read as follows:
“Sec. 15-C. John Hay Special Economic Zone (JHSEZ). - Registered business enterprises which
will operate after the effectivity of this Act, within the JHSEZ created under Proclamation No.
420, series of 1994, shall be entitled to the same tax and duty incentives as provided for under
Republic Act No. 7916, as amended: Provided, That for the purpose of administering these
incentives, the PEZA shall register, regulate, and supervise all registered enterprises within the
JHSEZ: Provided, further, That the Conversion Authority and the John Hay Management
Corporation (JHMC) shall only engage in acquiring, owning, holding, administering or leasing
real properties, and in other activities incidental thereto.”
Sec. 6. In case of conflict between national and local laws with respect to the tax exemption
privileges in the CFZ, PPFZ, JHSEZ and MSEZ, the same shall be resolved in favor of the
aforementioned zones: Provided, That the CFZ and PPFZ shall be subject to the provisions of
paragraphs (d), (e), (f), (g), (h), and (i) of Section 12 of Republic Act No. 7227, as amended.
Sec. 7. Business enterprises presently registered and granted with tax and duty incentives by the
Clark Development Corporation (CDC), Poro Point Management Corporation (PPMC), JHMC,
and Bataan Technological Park Incorporated (BTPI), including such governing bodies, shall be
entitled to the same incentives until the expiration of their contracts entered into prior to the
effectivity of this Act.
Sec. 8. Administration, Implementation and Monitoring of Incentives. – The governing

authorities shall be responsible for the administration and implementation of the incentives
granted to their respective registered enterprises. They shall submit to the Department of Finance
(DOF) their respective annual tax expenditures based on the computed costs in terms of revenue
foregone on the tax incentives granted to their registered enterprises. For proper monitoring, the
DOF shall create a single database of all incentives provided by all these authorities. The DOF
shall monitor and review the incentives granted and submit an annual report to the President.
Sec. 9. Penal Provision. - Any registered business enterprise found guilty of smuggling by final
judgment, either as principal, accomplice or accessory shall be perpetually barred from doing
business in any freeport and special economic zone, in addition to the penalties and sanctions
imposed by existing laws.
Sec. 10. Implementing Rules and Regulations. - The DOF, in coordination with the PEZA, the
Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), and in consultation with
the Bases Conversion Development Authority (BCDA), the SBMA, the CDC, the JHMC, the
PPMC, and the BTPI, shall promulgate and publish the necessary rules and regulations for the
effective implementation of this Act within two months from the date of effectivity of this Act.
Sec. 11. Separability Clause. - If any portion or provision of this Act is declared unconstitutional,
the remainder of this Act or any provision not affected thereby shall remain in force and effect.
Sec. 12. Repealing Clause. - All laws, decrees, orders, proclamations, rules and regulations or
other issuances or parts thereof inconsistent with the provisions of this Act are hereby repealed
or modified accordingly.
The provision of Section 50 of Republic Act No. 7916, as amended, 18 hereby repealed.
The provisions of Section 13(b)(3) of Republic Act No. 7227, as amended, with respect to public
utilities engaged in the provision of electric power and telecommunications services are hereby
repealed.
Sec. 13. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any two newspapers of general circulation, whichever comes earlier.
Approved:
(Sgd.) MANNY VILLAR

President of the Senate
(Sgd.) JOSE DE VENECIA JR.

Speaker of the House of Representatives
passed by the House of Representatives and the Senate on January 31, 2007 and February 5,
2007, respectively.
(Sgd.) OSCAR G. YABES

Secretary of the Senate
(Sgd.) ROBERTO P. NAZARENO

Secretary General
House of Representatives
Approved: March 20, 2007
GLORIA MACAPAGAL-ARROYO
CONGRESS OF THE PHILIPPINES
Metro Manila
Fourteenth Congress
Second Regular Session
Begun and held in Metro Manila, on Monday, the twenty - eighth day of July, two thousand
eight.
REPUBLIC ACT NO. 9593
AN ACT DECLARING A NATIONAL POLICY FOR TOURISM AS AN ENGINE OF

INVESTMENT, EMPLOYMENT, GROWTH AND NATIONAL DEVELOPMENT, AND
STRENGTHENING THE DEPARTMENT OF TOUMSM AND ITS ATTACHED
AGENCIES TO EFFECTIVELY EFFICIENTLY IMPLEMENT THAT POLICY, AND
APPROPRIATING FUNDS THEREFOR

assembled:
CHAPTER I
GENERAL PROVISIONS
Section 1. Short Title. - This Act shall be known as "The Tourism Act of 2009".
Section 2. Declaration of Policy. - The State declares tourism as an indispensable element of the
national economy and an industry of national interest and importance, which must be harnessed
as an engine of socioeconomic growth and cultural affirmation to generate investment, foreign
exchange and employment, and to continue to mold an enhanced sense of national pride for all
Filipinos.
Towards this end, the State shall seek to:
(a) Ensure the development of Philippine tourism that is for and by the Filipino people,
conserve and promote their heritage, national identity and sense of unity;
(b) Recognize sustainable tourism development as integral to the national socioeconomic

development efforts to improve the quality of life of the Filipino people, providing the
appropriate attention and support for the growth of this industry;
(c) Promote a tourism industry that is ecologically sustainable, responsible, participative,

culturally sensitive, economically viable, and ethically and socially equitable for local
communities;
(d) Create a favorable image of the Philippines within the international community,
thereby strengthening the country’s attraction as a tourism destination and eventually
paving the way for other benefits that may result from a positive global view of the
country;
(e) Develop the country as a prime tourist hub in Asia, as well as a center of world
congresses and conventions, by promoting sustainable tourism anchored principally on
the country’s history, culture and natural endowments, and ensuring the protection,
preservation and promotion of these resources; and
(f) Encourage private sector participation and agri - tourism for countryside development
and preservation of rural life.
Section 3. Objectives. - Pursuant to the above declaration, the State shall adopt the following
objectives:
(a) Develop a national tourism action plan and work for its adoption and implementation
by national and local governments;
(b) Encourage activities and programs which promote tourism awareness, preserve the
country’s diverse cultures and heritage, and instill a sense of history and a culture of
tourism among the youth and the populace;
(c) All things being equal, grant preferential treatment to the employment of Filipino
nationals in tourism - related enterprises;
(d) Provide full government assistance by way of competitive investment incentives, long
- term development fund and other financing schemes extended to tourism - related
investments;
(e) Ensure that tourism development protects and promotes the general well - being of the
Filipino people, particularly in the area of investment, to include the monitoring and
prevention of any act of profiteering or speculation to the detriment of local residents, as
well as the exploitation of women and children in tourism;
(f) Encourage competition in the tourism industry and maximize consumer choice by
enhancing the continued viability of the retail travel industry and independent tour
operation industry;
(g) Enhance the collection, analysis and dissemination of data which accurately measure
the economic and social impact of tourism in the country to facilitate planning in the
public and private sectors;
(h) Ensure the right of the people to a balanced and healthful ecology through the
promotion of activities geared towards environmental protection, conservation and
restoration;
(i) Develop responsible tourism as a strategy for environmentally sound and community
participatory tourism programs, enlisting the participation of local communities,
including indigenous peoples, in conserving bio - physical and cultural diversity,
promoting environmental understanding and education, providing assistance in the
determination of ecotourism sites and ensuring full enjoyment of the benefits of tourism
by the concerned communities;
(j) Strengthen the role of tourism councils and encourage the participation of
nongovernment organizations (NGOs), people’s organizations (NGOs) and the private
sector in initiating programs for tourism development and environmental protection;
(k) Promote the progressive development of existing civil aviation, land and sea
transportation policies as they relate to tourism, in consonance with existing bilateral
agreements and inter - agency pronouncements;
(l)Promote and ensure the convention - handling capability of the country as a world -
class convention center;
(m) Achieve a balance in tourism development between urban and rural areas in order to
spread the benefits of tourism and contribute to poverty alleviation, better access to
infrastructure and to a reduction in regional imbalances;
(n) Enhance capability - building of local government units (LGUs), in partnership with
the private sector, in the management of local tourism projects and initiatives, thereby
ensuring accessible and affordable destinations throughout the country, especially in
areas which have shown strong comparative advantage;
(o) Maintain international standards of excellence in all tourism facilities and services,
and promote the country as a safe and wholesome tourist destination;
(p) Enhance international business relations for the support of tourism projects of the
private sector, through5 partnerships, joint ventures and other cooperative undertakings
involving local and foreign investors;
(q) Support the establishment of tourism enterprise zones (TEZs), which will provide the
necessary vehicle to coordinate actions of the public and private sectors to address
development barriers, attract and focus investment on specific geographic areas and
upgrade product and service quality; and
(r) Ensure a sustainable funding mechanism for the implementation of tourism policies,
plans, programs, projects and activities.
Section 4. Definition of Terms. - The following terms, as used in this Act, are defined as follows:
(a) "Department" refers to the Department of Tourism created pursuant to Presidential

Decree No. 189 (1973), as amended.
(b) "Secretary" refers to the Secretary of Tourism.
(c) "Duty Free Philippines (DFP)" refers to the government agency created pursuant to
Executive Order No. 46 (1986).
(d) "Duty Free Philippines Corporation (DFPC)’’ refers to the corporate entity created
out of DFP pursuant to this Act.
(e) "Philippine Conventions and Visitors Corporation (PCVC)" refers to the corporate
entity created pursuant to Presidential Decree No. 867, as amended.
(f) "Intramuros Administration (IA)" refers to the government agency created pursuant to
Presidential Decree No. 1616 (1979), as amended.
(g) "Philippine Retirement Authority (F’RA)’’ refers to the government agency created
pursuant to Executive Order No. 1037 (1985).6
(h) "Tourism Infrastructure and Enterprise Zone Authority (TIEZA)" refers to the
government agency created pursuant to this Act.
(i) "Tourism Enterprise Zone (TEZ)" refers to tourism
(i) "TEZ overseer" refers to any person who shall be appointed by the TIEZA in specific
zones to perform such functions as may be delegated by the TIEZA in accordance with
law. enterprise zones created pursuant to this Act.
(k) "TEZ operator" refers to an entity duly incorporated under Batas Pambansa Blg. 68,
otherwise known as The Corporation Code of the Philippines, and other relevant laws,
whose capital may be provided by LGUs and/or private entities, and which shall
administer and supervise each TEZ.
(l) "TEZ Administrator" refers to the person appointed by the Board of Directors of a
TEZ operator who shall be responsible for implementing the policies, plans and projects
of the TEZ operator.
(m) "Registered enterprise" refers to au enterprise located within a TEZ that is duly -
registered with the TIEZA.
(n) "Philippine Tourism Authority (PTA)" refers to the existing implementation arm of
the Department of Tourism created pursuant to Presidential Decree No. 189 (1973), as
amended.
(o) "Tourism Promotions Board (TPB)" refers to the body corporate created under this
Act.
(p) "Tourism enterprises" refers to facilities, services and attractions involved in tourism,
such as, but not limited to: travel and tour services; tourist transport services, whether for
land, sea or air transportation; tour guides; adventure sports services involving such
sports as mountaineering, spelunking, scuba diving and other sports activities of
significant tourism potential; convention organizers; accommodation establishments,
including, but not limited to, 7 hotels, resorts, apartelles, tourist inns, motels, pension
houses and home stay operators: tourisnl estate management services, restaurants, shops
and department stores, sports and recreational centers, spas, museums and galleries,
theme parks, convention centers and zoos.
(q) "Primary tourism enterprises" refers to travel and tour services; land, sea and air
transport services exclusively for tourist use; accommodation establishments; convention
and exhibition organizers; tourism estate management services; and such other
enterprises as may be identified by the Secretary, after due consultation with concerned
sectors.
(r) "Secondary tourism enterprises" refers to all other tourism enterprises not covered by
the preceding subsection.
(s) "Greenfield Tourism Zone" refers to a new or pioneer development, as determined by

the TIEZA.
(t) "Brownfield Tourism Zone" refers to an area with existing infrastructure or

development as determined by the TIEZA.
(u) "Foreign visitors" refers to all passengers using foreign passports. I
(v) "Sustainable tourism development" refers to the management of all resources that
meets the needs of tourists and host regions while protecting the opportunities for the
future, in such a way that economic, social and aesthetic needs can be fulfilled while
maintaining cultural integrity, essential ecological processes, biological diversity and life
support systems.
CHAPTER II
TOURISM GOVERNANCE
SUBCHAPTER 11 - A. STRUCTURE OF THE DFJ’ARTMENT
Section 5. Mandate. - The Department of Tourism, hereinafter referred to as the Department,

shall be the primary planning, programming, coordinating, implementing and I8 regulatory
government agency in the development and promotion of the tourism industry, both domestic
and international, in coordination with attached agencies and other government instrumentalities.
It shall instill in the Filipino the industry’s fundamental importance in the generation of
employment, investment and foreign exchange.
Section 6. Powers and Functions. - The Department shall have the following powers and
functions:
(a) Formulate tourism policies, plans and projects for the development of tourism as an
engine of socioeconomic and cultural growth;
(b) Supervise and coordinate the implementation of tourism policies, plans and projects;
(c) Call upon all agencies of government to properly carry out their programs in relation
to and in coordination with the policies, plans and projects of the Department and to
assist in the implementation thereof;
(d) Communicate to the President, and the heads of departments, agencies and
instrumentalities of the government, the impact upon tourism and the economy of
proposed governmental actions;
(e) Provide an integrated market development program to attract people to visit the
Philippines and enhance the prestige of the country and the Filipino people in the
international community;
(f) Represent the government in all domestic and international conferences and fora, and
in all multilateral or bilateral treaties and international agreements concerning tourism,
and ensure the government’s implementation thereof and compliance with all obligations
arising therefrom;
(g) Request the President for representation in all government agencies, offices, boards,
commissions and committees that may affect tourism;
(h)Call upon relevant government departments, agencies and offices, in consultation with
the private sector, to provide access to travel, to facilitate the process of obtaining and
extending visas, to integrate and simplify travel regulations and immigration procedures
and to ensure their efficient, fair and courteous enforcement to assure expeditious and
hospitable reception of all visitors;
(i) Support, advance and promote the protection, maintenance and preservation of
historical, cultural and natural endowments, in cooperation with appropriate government
agencies and the private sector, and take appropriate measures against acts and omissions
contrary to these objectives;
(j) Monitor conditions of any community in the Philippines and, in consultation with the
LGUs and law enforcers, issue timely advisories on the safety or viability of travel to
particular places within the Philippines and on patronage of entities engaged in tourism -
related activities and of tourism products;
(k) Evaluate tourism development projects for the issuance of permits and the grant of
incentives by appropriate government agencies, establish a databank of tourism areas and
projects for investment purposes, and encourage private sector investment and
participation in tourism activities and projects;
(I) Formulate and promulgate, in consultation with the LGUs, the private sector industries
and other tourism stakeholders, rules and regulations governing the operation and
activities of all tourism enterprises including, but not limited to, a national standard for
licensing, accreditation and classification of tourism enterprises, prescribing therein
minimum levels of operating quality and efficiency for their operation in accordance with
recognized international standards, impose reasonable penalties for violation of
accreditation policies and recommend to the LGUs concerned the suspension or
prohibition of operation of a tourism enterprise;
(m) Monitor the LGUs’ compliance to national standards in the licensing of tourism
enterprises, receive and investigate10 complaints concerning these enterprises, and act on
such complaints to properly implement the provisions of this Act;
(n) Ensure the proper coordination, integration, prioritization and implementation of local
tourism development plans with that of the national government:
(o) Provide technical assistance to LGUs in destination development, standard setting and
regulatory enforcement;
(p) Undertake continuing research studies and survey to analyze economic conditions and
trends relating to tourism and travel, and compile and integrate a statistical databank on
the tourism industry;
(q) Delegate to regional offices, in coordination with LGUs, specific powers and
functions in the implementation of tourism policies, plans and projects;
(r) Collect necessary fees and charges for the proper implementation of tourism policies,
plans and projects; and
(s) Exercise such other powers and functions as are
Section 7. Structure of the Department. - The Department shall consist of the Department
Proper, Department offices, services and unit, and the regional and foreign offices.
Section 8. Department Proper. - The Department Proper shall consist of the Offices of the
Secretary, Undersecretaries and Assistant Secretaries. necessary for the implementation of this
Act.
Section 9. Office of the Secretary. - The Office of the Secretary shall consist of the Secretary and
his or her immediate staff.
Section 10. Undersecretaries and Assistant Secretaries. - The Secretary shall be assisted by at
least three (3) Undersecretaries, namely:
(a) Undersecretary for Tourism Development, who shall be responsible for the Office of
Product Development, the Office of Tourism Development Planning, Research and
Information Management and the Office of Industry Manpower Development;
(b) Undersecretary for Tourism Regulation, Coordination and Resource Generation, who
shall be responsible for the Office of Tourism Standards and Regulations, the Office of
Tourism Coordination, the Office of Tourism Resource Generation and all regional and
foreign offices; and
(c) Undersecretary for Special Concerns and Administration, who shall be responsible for
the Office of Special Concerns, the Financial and Management Service, Administrative
Affairs Service, Legal Affairs Service, Internal Audit Service and Legislative Liaison
Unit.
Each Undersecretary shall he assisted by an Assistant Secretary.
Section 11. Office of Product Development. - The Office of Product Development shall have the
following functions:
(a) Conceptualize and develop new products which will enhance tourism sites and
facilities;
(b) Undertake tests on the viability and acceptability of new tourism - related products
and programs: and
(c) Encourage and promote joint undertakings with the private sector for the development
of new tourism - related products and programs.
Section 12. Office of Tourism Development Planning, Research and Information Management. -
The Office of Tourism Development Planning, Research and Information Management shall
have the following functions:
(a) Prepare a National Tourism Development Plan identifying geographic areas with
potential tourism value and outlining approaches to developing such areas;
(b) Formulate policies and programs for global competitiveness and national tourism
development, and approve local government tourism development plans;
(c) Monitor and evaluate the implementation of policies, plans and programs of the
Department;
(d) Formulate an integrated marketing and promotions plan, identifying strategic market
areas and niches;
(e) Formulate, in coordination with the TIEZA, other government agencies and LGUs
exercising political jurisdiction over the area, development plans for TEZs and
integrating such plans with other sector plans for the area;
(f) Conduct researches and studies, disseminate all relevant data on tourism, monitor and
analyze the socioeconomic impact of tourism upon affected local communities and the
nation to maximize the benefits of tourism throughout affected local communities and to
avoid or mitigate possible negative impacts of the industry;
(g) Provide technical assistance to the LGUs and the TIEZA in the preparation of local
tourism development plans to ensure adherence to national policies and programs;
(h) Coordinate with government agencies, LGUs, NGOs and other private entities for the
development and implementation of the national tourism plans and policies and other
relevant concerns;
(i) Source grants or loans from local and foreign funding institutions to implement
tourism policies, plans and projects;
(i) Create and supervise management information systems for the entire Department;
(k) Formulate and coordinate the implementation of the Department’s information system
strategic plan; and
(l) Pursue the Department’s interests in multilateral, international and regional tourism
cooperation, agreements and treaties.
Section 13. Office of Industry Manpower Development. - The Office of Industry Manpower
Development shall have the following functions:
(a) Conduct seminars on Philippine history, culture, environment and related subjects, in
coordination with appropriate government agencies and the private sector, specifically
educational institutions;
(b) Develop training modules and conduct seminars and continuing education programs
for the industry manpower, in coordination with appropriate government agencies and
tourism enterprises and associations, thereby upgrading their quality, competence and
excellence in tourism services:
(c) Encourage the development of training courses and apprenticeship programs for
tourist guides and other similar workers jointly with concerned tourism enterprises,
appropriate government agencies and the private sector; and
(d) Enlist the participation of experts for the provision of technical assistance, training
and education programs to LGUs, tourism enterprises and other entities to improve the
quality of tourism services and issue certifications to the effect that these recipients of
assistance, training and education have passed the standards set by the said experts, in
accordance with this Act.
Section 14. Office of Tourism Standards and Regulations. - Recognizing the need for
internationally competitive standards of facilities and services, the Office of Tourism Standards
and Regulations shall have the following functions:
(a) Formulate and enforce standards for the operation and maintenance of tourism
enterprises, prescribing minimum and progressive levels of operating quality and
efficiency consistent with local and international standards;
(b) Coordinate with relevant tourism enterprise associations, including adventure sports
associations, in the formulation of rules and regulations, accreditation and enforcement;
(c) Develop and enforce a comprehensive system of mandatory accreditation for primary
tourism enterprises, and voluntary accreditation for secondary tourism enterprises, in
accordance with prescribed guidelines and standards;
(d) Establish a system of registration, information, linkage and mutual assistance among
accredited tourism enterprises to enhance the value of accreditation and improve the
quality of service rendered by such enterprises; and
(e) Evaluate tourism projects in accordance with standards and endorse the same to
appropriate government agencies for availment of incentives, and provide technical
assistance to incentive - giving institutions in the formulation of tourism incentives and
the administration of their functions.
Section 15. Office of Tourism Coordination. - Recognizing that increased linkages are necessary
between various government offices and the private sector and among the various entities in the
private sector itself to properly implement tourism policy, the Office of Tourism Coordination
shall have the following functions:
(a) Maintain close coordination with national government agencies, LGUs, NGOs and
other private entities for the development and implementation of national tourism plans
and policies;
(b) Call upon the assistance and support of any or all of the government agencies in the
implementation of the policies of the Department; and
(c) Support the private sector in all tourism activities
Section 16. Office of Tourism Resource Generation. - In line with the objective of ensuring a
sustainable funding mechanism for the implementation of tourism policies, plans, programs,
projects and activities, the Office of Tourism Resource Generation shall be tasked with the
collection of necessary fees and charges which shall be used by the Department in the promotion
and marketing efforts of the requiring governmental coordination. TPB and the development of
infrastructure facilities, utilities and services of the TIEZA. The proceeds of such collection shall
accrue directly and automatically to the Department. The guidelines for the collection and
disbursement of these proceeds shall be defined in the implementing rules and regulations of this
Act.
There is hereby created a special fund, to be disbursed and administered by the Department,
called the Tourism Development Fund, which shall be used for the development, promotion and
marketing of tourism and other projects of the Department that will boost tourism in the country.
The fund shall be sourced from the fees and charges which will be collected by the Department.
A special account shall be established for this fund in the National Treasury. Disbursements
made from the fund shall be subject to the usual accounting and budgeting rules and regulations.
Section 17. Regional Offices. - The Department shall establish, operate and maintain a regional
office in each administrative region in the country. A regional office, headed by a regional
director, shall have the following functions:
(a) Implement laws, policies, plans, programs, rules and regulations of the Department,
particularly those relating to compliance therewith, and to the accreditation of tourism
enterprises promulgated by the Department;
(b) Coordinate with regional offices of other departments, bureaus and agencies, LGUs,
NGOs and the regional offices of the Department's attached agencies in the
implementation of such laws, policies, plans, programs and rules and regulations;
(c) Undertake research and data gathering on local tourism trends and other relevant
tourism information;
(d) Together with LGUs, establish such tourist information and assistance centers at
strategic locations as are necessary to disseminate relevant information pertaining to the
tourist locations and products and to assist tourists and tourism enterprises;
(e) Conduct trainings and information campaigns, and assist the TPB in domestic
promotions in the pertinent region on subject matters such as this Act, the functions of the
Department, tourism traffic and new tourism sites, among others; and
(f)Make recommendations to the Secretary on all matters relating to tourism in the

region.
Section 18. Foreign Offices. - The creation, operation and supervision of foreign field offices of
the Department shall be retained therein.
Section 19. Office of Special Concerns. - The Office of Special Concerns shall be responsible in
effectively coordinating and monitoring the various directives, pronouncements and issuances of
the President pertaining to the priorities of the government and the Department.
Section 20. Financial and Management Service. - The Financial and Management Service shall
provide the Department with staff advice and assistance on budgetary, financial and management
matters and shall perform such other related functions as may be assigned or delegated to it by
the Secretary.
Section 21. Administrative Affairs Service. - The Administrative Affairs Service shall provide
the Department with staff advice and assistance on personnel information, records,
communications, supplies, equipment, collection, disbursements, security, other custodial work
and such other related duties and responsibilities as may be assigned or delegated to it by the
Secretary.
Section 22. Legal Affairs Service. - The Legal Affairs Service shall provide the Department with
staff advice and assistance on all legal matters affecting the Department and perform such other
related functions as may be assigned or delegated to it by the Secretary.
Section 23. Internal Audit Service. - The Internal Audit Service shall be responsible for
instituting and conducting an audit program for the Department to ensure compliance with17
existing rules and regulations for an efficient and effective fiscal administration and performance
of department affairs.
Section 24. Legislative Liaison Unit. - The Legislative Liaison Unit shall establish and maintain
regular coordination and liaison with Congress, monitor the passage of legislative measures that
are in the Department’s agenda, provide relevant information and technical support to Members
of Congress, and perform such other related functions as may be assigned or delegated by the
Secretary.
SUBCHAPTER 11 - B. RATIONALIZATION OF FUNCTIONS
Section 25. Reorganization of Offices. - The Philippine Tourism Authority is hereby reorganized
as the Tourism Infrastructure and Enterprise Zone Authority, as hereinafter provided. The
Philippine Conventions and Visitors Corporation is hereby reorganized as the Tourism
Promotions Board, as hereinafter provided. The Bureaus for Domestic and International Tourism
Promotions, and the Office of Tourism Information of the Department are hereby absorbed into
the Tourism Promotions Board.
Section 26. Human Resources. - Where certain functions are declared redundant on account of
the reorganization, the Department, the TIEZA Board and the Tourism Board shall provide for
the reassignment, insofar as practicable, of affected employees to similar positions within the
Department and its attached agencies, taking into consideration their skills and experience,
without loss of seniority or other rights and privileges. In any case, all relevant laws, decrees,
executive orders, rules and regulations concerning the rights of government employees in the
reorganization of an office shall be respected.
Section 27. Optional Retirement and Compensation. - There shall be no mandatory separation of
any employee as a result of the reorganization of the Department and its attached agencies and
corporations. However, if any employee elects to leave the service or retire, said employee shall
be entitled to claim separation or retirement benefits as may be provided18 under existing laws
governing the civil service or other laws and issuances, whichever may be beneficial to the
employee concerned.
SUBCHAPTER 11 - C. ATTACHED AGENCIES AND CORPORATIONS
Section 28. Attached Agencies and Corporations. - The TPB, the TIEZA and the DFPC shall be
attached to the Department and shall be under the supervision of the Secretary for program and
policy coordination. Furthermore, the following agencies and corporations shall be attached to
the Department under the supervision of the Secretary for program and policy coordination: the
IA; the National Parks Development Committee (NPDC), created under Executive Order No. 30
(1963); the Nayong Pilipino Foundation (NPF), created under Presidential Decree No. 37 (1972),
as amended; the PRA; and the Philippine Commission on Sports Scuba Diving (PCSSD). Except
as hereinafter provided, each of the attached agencies and corporations shall continue to operate
under their respective charters.
Section 29. Intramuros Administration, National Parks Development Committee and Nayong
Pilipino Foundation.- The Intramuros Administration, the National Parks Development
Committee and the Nayong Pilipino Foundation shall continue to be attached to the Department
and operate under their respective charters. They may be authorized to operate TEZs, under the
supervision of the TIEZA, as provided under Chapters IV and V of this Act, within their
respective jurisdictions: Provided, That any restoration activity undertaken by the IA, the NPDC
or the NPF may be entitled to a tax deduction equivalent to the full cost of the restoration activity
directly incurred in accordance with the provisions of the National Internal Revenue Code, as
amended.
Section 30. Philippine Retirement Authority. - For purposes of policy and program coordination,
the Philippine Retirement Authority is hereby attached to the Department and placed under the
supervision of the Secretary. The Secretary shall be the ex officio Chairperson of its Board of
Trustees: Provided, That this provision shall apply after the expiration of the term of office of the
incumbent Chairperson.
Section 31. Philippine Commission on Sports Scuba Diving. - The Philippine Commission on
Sports Scuba Diving shall likewise be attached to the Department and placed under the
supervision of the Secretary, who shall be the ex officio Chairperson of its Board of Trustees. It
shall undertake measures to provide the standard basic dive rules to all levels or kinds of divers,
regulate scuba sports and technical diving in the country and ensure the safety of the sport
through the formulation of policies pursuant thereto, in coordination with the Office of Tourism
Standards and Regulations, including the regulation of the accredited scuba sports and technical
diving establishments.
SUBCHAPTER 11 - D. CONTROL AND SUPERVISION OF AREAS WITH

OVERLAPPING JURISDICTIONS
Section 32. Rationalization of Tourism Areas, Zones and Spots. - Any other area specifically
defined as a tourism area, zone or spot under any special or general law, decree or presidential
issuance shall, as far as practicable, be organized into a TEZ under the provisions of this Act.
With respect to tourism zones, areas or spots not organized into TEZs, the Department, through
appropriate arrangements, may transfer control over the same or portions thereof, to another
agency or office of the government, or to a LGU. This shall only be effected upon the
submission by the latter, within a reasonable time, of comprehensive development plans for the
use, preservation and promotion of these zones, areas or spots and upon the approval thereof by
the Department. Such transfer shall not have the effect of diminishing the jurisdiction of the
Department over these zones, areas or spots.
The Department shall exercise supervisory powers over such agency, office or LGU in
accordance with the terms of the transfer or the development plan of the zone, area or spot.
Where a government agency or office or a LGU fails to implement the comprehensive plan
approved by the Department, the Department may rescind the arrangement transferring control
over the tourism zone, area or spot and regain such control thereof.
Section 33. National Integrated Protected Areas System (NIPAS) and the National Ecotourism
Policy. - The Department, in coordination with the Department of Environment and Natural
Resources (DENR), shall identify areas covered by the NIPAS with ecotourism potentials and
cultural heritage value, and prepare policies, plans and programs for their development,
preservation, operation or conversion into TEZs. The designation of these areas as TEZs shall be
subject to the provisions of Subchapter IV - A of this Act.
The ecotourism sites in the National Ecotourism Strategy pursuant to Executive Order No. 111
(1999) may also be developed into TEZs with the National Ecotourism Steering Committee
responsible for finding the appropriate TEZ operator for the sites.
Section 34. Tourism Infrastructure Program. - The Department, in accordance with the National
Tourism Development Plan and local government initiatives, shall coordinate with the
Department of Public Works and Highways (DPWH) and the Department of Transportation and
Communications (DOTC) in the establishment of a tourism infrastructure program in the
respective work programs of said agencies, identifying therein vital access roads, airports,
seaports and other infrastructure requirement in identified tourism areas. The said agencies and
the Department of Budget and Management (DBM) shall accord priority status to the funding of
this tourism infrastructure program.
SUBCHAPTER 11 - E. SHARED RESPONSIBILITIES OF NATIONAL AND LOCAL

GOVERNMENTS
Section 35. Coordination Between National and Local Governments. - In view of the urgent
need to develop a national strategy for tourism development while giving due regard to the
principle of local autonomy, the Department, the Department of the Interior and Local
Government (DILG) and LGUs shall integrate and coordinate local and national plans for
tourism development. The Department may provide financial and technical assistance, training
and other capacity - building measures to LGUs for the preparation, implementation and21
monitoring of their tourism development plans, gathering of statistical data, and enforcement of
tourism laws and regulations, giving due priority to areas that have been identified as strategic in
the implementation of the national tourism development plan. LGUs shall ensure the
implementation of such plans. The Department, the TPB and the TIEZA shall prioritize
promotion and development assistance for LGUs which successfully adopt and implement their
tourism development plans.
Section 36. National Tourism Development Planning. - The Department, in coordination with its
attached agencies, LGUs and the private sector, shall continuously update the existing national
tourism development plan in view of evolving needs and capabilities of LGUs and the domestic
and global tourism market.
Section 37. Local Tourism Development Planning. - LGUs, in consultation with stakeholders,
are encouraged to utilize their powers under Republic Act No. 7160, otherwise known as the
Local Government Code of 1991, to ensure the preparation and implementation of a tourism
development plan, the enforcement of standards and the collection of statistical data for tourism
purposes. They shall, insofar as practicable, prepare local tourism development plans that
integrate zoning, land use, infrastructure development, .the national system of standards for
tourism enterprises, heritage and environmental protection imperatives in a manner that
encourages sustainable tourism development.
Section 38. Reports. - In order to monitor the resources of the Department and to ascertain the
economic and social impact of tourism, all LGUs shall provide an inventory of all the resources
available to the Department for use in the implementation of this Act. They shall likewise
periodically report to the Department on the status of tourism plans and programs, tourist arrivals
and tourism enterprises, among others, within their jurisdictions.
Section 39. Accreditation. - In order to encourage global competitiveness, strengthen data

gathering and research on tourism, and facilitate the promotion of individual enterprises and the
industry as a whole, the Department shall prescribe22 and regulate standards for the operation of
the tourism industry. Primary tourism enterprises shall be periodically required to obtain
accreditation from the Department as to the quality of their facilities and standard of services.
Accreditation shall be voluntary for secondary tourism enterprises.
The Department shall evolve a system of standards for the accreditation of these enterprises in
accordance with the relevant tourism development plan. These standards shall adhere, insofar as
practicable, to those recognized internationally. The Department and LGLJs shall ensure strict
compliance of tourism enterprises with these standards.
The Department, through the Office of Tourism Standards and Regulations, shall act on
complaints regarding accredited tourism enterprises, and after notice and hearing, may impose
fines, or downgrade, suspend or revoke accreditation, for violation of the terms thereof. The
Department shall likewise have the power and the duty to issue tourism advisories pertaining to
tourism enterprises found to have violated the terms of their accreditation. A tourism advisory
shall contain the following:
(a) Complete identification of the pertinent tourism enterprise:

(b) Location of this entity;
(c) Its registered owner or proprietor and the business address thereof; and
(d) The specific term or terms of accreditation violated:
(e) The statement that the advisory shall only be lifted upon continued compliance of the
enterprise with the terms of accreditation.
Tourism enterprises registered with the TIEZA in accordance with the pertinent provisions below
and availing of the incentives under this Act shall further be ordered to pay back taxes in the
amount equivalent to the difference23 between the taxes that they should have paid had they not
availed of the incentives under this Act and the actual amount of taxes being paid by them under
the same incentive scheme. The back taxes to be collected shall be computed up to three (3)
years directly preceding the date of promulgation of the decision or order finding that the tourism
enterprise violated the terms of its accreditation. For this purpose, the Department shall enlist the
assistance of the Bureau of Internal Revenue in arriving at an accurate computation of back taxes
to be paid by the pertinent tourism enterprise. The proceeds of these back taxes shall be
distributed as follows:
(a) One - third to the national government;
(b) One - third to the LGUs concerned, to be shared by them equally should there be
more than one such LGU and
(c) One - third to the TIEZA.
Nothing in this section shall diminish the powers of the LGUs under the Local Government
Code, pertaining to the issuance of business permits, licenses and the like. When an enterprise
fails to obtain or loses accreditation, the Department shall not,$ the LGU concerned so that it
may take appropriate action in relation to an enterprise’s licenses and permits to operate.
The Department may, under such relevant terms and conditions stipulated, delegate the
enforcement of the system of accreditation to LGUs that have adopted and successfully
implemented their tourism development plans.
The Department shall promulgate the necessary implementing rules and regulations to enforce
the provisions of this section pursuant to its powers and functions as defined under Section 6 of
this Act.
Section 40. Value of Accreditation. - The Department shall develop a system to enhance the
value of accreditation among primary and secondary tourism enterprises. Only accredited
enterprises shall be beneficiaries of promotional, training and other programs of the Department
and its attached agencies and corporations.
Accredited enterprises shall, insofar as practicable, give due preference to other accredited
enterprises in obtaining relevant services.
The Department shall develop an integrated system of accreditation in coordination with

concerned agencies and entities, in order to reduce the regulatory and financial burden on
tourism - related enterprises.
Section 41. Local Government Capabilities Enhancement. - The Department shall develop
support and training programs to enhance the capability of LGUs to monitor and administer
tourism activities, and enforce tourism laws, rules and regulations in their respective
jurisdictions. Funding for such programs shall be shared equitably between the Department and
the LGUs concerned.
Section 42. Tourism Officers. - Every province, city or municipality in which tourism is a
significant industry shall have a permanent position for a tourism officer. He or she shall be
responsible for preparing, implementing and updating local tourism development plans, and
enforcing tourism laws, rules and regulations. In the performance of his or her functions, the
tourism officer shall coordinate with the Department and its attached agencies.
Prior to appointment, every tourism officer must have obtained a relevant bachelor’s degree and
at least five (5) years of substantial involvement in the tourism industry. The Department may
also prescribe other relevant qualifications and require periodic completion of training programs.
Such qualifications and the powers and functions of tourism officers shall be defined in the
implementing rules and regulations of this Act.
Section 43. Tourism Assistance. - In coordination with the Department’s regional offices, every
province, city or municipality in which tourism is a significant industry shall establish a tourist
information and assistance center to assist tourists and tourism enterprises.
Section 44. Tourism Site Classification. - The tourism councils established in the administrative
regions of the country shall meet, on a regular basis, to class& and evaluate tourism destinations,
sites and activities within their respective regions. Such classifications and evaluations may be
used by the Department and its attached agencies, LGUs, and the private sector as guide in the
development and implementation of their respective programs.
CHAPTER III
TOURISM PROMOTIONS
SUBCHAPTER 111 - A. TOURISM PROMOTIONS BOARD
Section 45. Tourism Promotions Board. - Under the supervision of the Secretary and attached to
the Department for purposes of program and policy coordination shall be a body corporate
known as the Tourism Promotions Board (TPB). The TPB shall formulate and implement an
integrated domestic and international promotions and marketing program for the Department.
Section 46. Mandate. - The TPB shall be responsible for marketing and promoting the
Philippines domestically and internationally as a major global tourism destination, highlighting
the uniqueness and assisting the development of its tourism products and services, with the end
in view of increasing tourist arrivals and tourism investment. Specifically, it shall market the
Philippines as a major convention destination in Asia. To this end, it shall take charge of
attracting, promoting, facilitating and servicing large - scale events, international fairs and
conventions, congresses, sports competitions, expositions and the like. It shall likewise ensure
the regular advertisement abroad of the country‘s major tourism destinations and other tourism
products, not limited to TEZs. It may also provide incentives to travel agencies abroad which are
able to draw tourists and tourism investments to the country.
Section 47. Board of Directors. - The TPB shall be governed and its powers exercised by a
Board of Directors ("Tourism Board), composed as follows:
(a) The Department Secretary, as Chairperson;26
(b) The TPB Chief Operating Officer, as Vice Chairperson;
(c) The TIEZA Chief Operating Officer;
(d) The Department of Foreign Affairs (DFA) Secretary;
(e) The Department of Trade and Industry (DTI)
(f) The DOTC Secretary; and
(g) Five (5) representative directors, to be appointed by the President, upon the
recommendation of the Tourism Congress from a list of at least three (3) nominees per
group as enumerated in Section 49. They must be Filipinos with recognized competence
in business management, marketing, finance, tourism and other related fields and shall
serve a term of office of three (3) years, which term may be extended for a period not
exceeding three (3) years.
The Secretaries ,of the DFA, the DTI and the DOTC shall each designate a permanent
representative in the Board, who must possess relevant experience. The permanent representative
shall be duly authorized to act on behalf of the Secretary in his or her absence.
The Chairperson of the Tourism Board shall have voting rights in case of a tie.
The Tourism Board shall appoint a corporate secretary whose functions shall include the
preparation of agenda for board meetings, in consultation with the Chairperson.
Section 48. The Chief Operating Officer. - The TPB shall have a Chief Operating Officer who
must be a Filipino, with a bachelor’s degree in any of the following fields: business, law,
tourism, public administration or other relevant fields and have demonstrated expertise therein.
He or she must have been engaged in a managerial capacity for at least five (5) years prior to his
or her appointment. He or she shall be elected by the Board from a list of qualified applicants
and27 appointed by the Secretary, and shall have a term of office of six (6) years, unless
removed for cause in accordance with law.
Section 49. Representative Directors. - In accordance with Section 47, paragraph (g) of this Act,
the Tourism Congress, as created under Chapter VIII, Section 104, shall elect from, among its
members the directors to represent the tourism industry in the Tourism Board, specifically the
following groups:
(a) Accommodation enterprises;
(b) Travel and tour services;
(c) Land, air and sea tourist transport services;
(d) Conventions and exhibitions services and suppliers; and
(e) Other tourism enterprises.
If a representative director ceases to be connected with the sector he or she represents, a new
representative director shall be appointed to serve the unexpired term.
Section 50. Powers and Functions of the Tourism Promotions Board. - The TPB shall have all
the general powers of a corporation provided under the Corporation Code. Furthermore, it shall
have the following powers and functions:
(a) Organize the TPB in a manner most efficient and economical for the conduct of its
business and the implementation of its mandate;
(b) Develop and implement a plan to market the Philippines as a premier tourist
destination;
(c) Direct and coordinate the resources and efforts of the government and the private
sector in the tourism and allied fields for the full realization of the tourism plans and
programs;
(d) Develop and promote the Philippines as a center for international meetings,
incentives, conventions, exhibitions, sports, medical tourism and other special events;
(e) Engage in the business of tourism and perform acts in consonance therewith, such as,
but not limited to, attending conventions and other events abroad in representation of the
country, encouraging sales promotions and advertising, and implementing programs and
projects with the objective of promoting the country and enticing tourists to visit its
tourism destinations and to enjoy its tourism products;
(f) Contract loans, indebtedness and credit, and issue commercial papers and bonds, in
any local or convertible foreign currency from international financial institutions, foreign
government entities, and local or foreign private commercial banks or similar institutions
under terms and conditions prescribed by law, rules and regulations:
(g) Execute any deed of guarantee, mortgage, pledge, trust or assignment of any property
for the purpose of financing the programs and projects deemed vital for the early
attainment of its goals and objectives, subject to the provisions of the Constitution
(Article VII, Section 20 and Article XU, Section 2, paragraphs (4) and (5));
(h) Receive donations, grants, bequests and assistance of all kinds from local and foreign
governments and private sectors and utilize the same;
(i) Extend loans through government banks and financial institutions, provide grants and
other forms of financial assistance for manpower training, heritage preservation,
infrastructure development and other programs of the Department:
(j) Obtain the services of local and foreign consultants, and enter into contracts locally
and abroad in the performance of its functions: and (k) Perform all other powers and
functions of a corporation.
Section 51. Meetings of the Board. - The Tourism Board shall meet at least once a month at the
principal office of the TPB, unless the Tourism Board previously agrees in writing to meet at
another location.
Section 52. Capitalization. - The TPB shall have an authorized capital of Two hundred fifty
million pesos (Php250,000,000.00) which shall be fully subscribed by the national government.
Section 53. Strategic Marketing Plan. - The TPB shall draft comprehensive short - , medium -
and long - term marketing plans for the Philippines as a destination for travel, business and
investment, particularly tourism investment. It shall coordinate, insofar as practicable, with
relevant agencies of the government and the private sector in the preparation of such plans.
Such plans shall be duly approved by the Tourism Board. The Chief Operating Officer shall
ensure that the marketing plans are duly implemented, and shall periodically report to the
Tourism Board the status of their implementation. He or she shall also coordinate to ensure that
the other agencies of the government and the private sector which assisted in the preparation of
marketing plans perform their respective duties under the plans.
SUBCHAPTER 111 - B. TOURISM PROMOTIONS FUNDING
Section 54. Tourism Promotions Trust. - Within one hundred and twenty (120) days from the
effectivity of this Ad, an audit shall be conducted by the Commission on Audit to determine the
true value of the assets and liabilities of the PTA. After such audit, the TIEZA and the
Department, in coordination with the Privatization Council, shall determine which assets shall be
put up for sale or lease: Provided, That concerned LGUs interested to manage and operate said
assets shall have the right of first refusal. The TIEZA and the Department shall take into
consideration the importance of maintaining and preserving the PTA assets which may already
be considered cultural treasures and heritage sites, such as the Banaue Hotel and similar assets,
which shall not be sold or in any way disposed of and shall be placed under the ownership of the
TIEZA for their continued maintenance.
The Tourism Promotions Trust shall hereby be established from the proceeds of the sale or lease
of the assets of the PTA. The trust shall be managed by a government - owned bank or financial
institution selected by the Tourism Board. Said bank or institution shall report the status and
profitability of the trust on a quarterly basis to the Tourism Board, the Secretary, and the Joint
Congressional Tourism Oversight Committee created under this Act.
Section 55. Tourism Promotions Fund. - The proceeds of the following shall be placed in a
special Tourism Promotions Fund to finance the activities of the TPB:
(a) The investment earnings from the Tourism Promotions Trust;
(b) An appropriation from the national government of not less than Five hundred million
pesos (Php500,000,000.00) annually for at least five (5) years from the time of its
constitution;
(c) Seventy percent (70%) of the fifty percent (50%) net income of the DFPC accruing
to^ the Department, in lieu of its statutory remittance to the national government under
Republic Act No. 7656, otherwise known as the Dividends Law of 1994;
(d) At least twenty - five percent (25%) of the fifty percent (50%) national government
share remitted by the Philippine Amusements and Gaming Corporation (PAGCOR) to the
National Treasury pursuant to Republic Act No. 7656; and
(e) At least twenty - five percent (25%) of the national government share remitted by the
international airports and seaports to the National Treasury pursuant to Republic Act No.
7656.
In no case shall promotions and marketing activities receive less than fifty percent (50%) of the
annual utilization of the fund. Not more than ten percent (10%) of the fund shall be used for all
other administrative and operating expenses of the TPB. The unallocated portion of the fund
shall be earmarked by the TPB as follows:
(a) For use by the TIEZA in the development of TEZs;
(b) For the Department, to enhance its programs for development planning, heritage
preservation and infrastructure development, and manpower training including, but not
limited to, scholarships for trainings abroad, among others; or
(c) For such other purposes as may contribute to the development of the tourism industry.
Portions of the net income of government corporations and other enterprises provided
under this section due the TPB shall be remitted directly thereto on a quarterly basis.
Section 56. Special Contingency and. - At the beginning of each year, ten percent (10%) of the
allocation for promotions and marketing shall be set aside as a Special Contingency Fund of the
TPB. This shall be used in the event of emergencies to provide the TPB with sufficient resources
to undertake marketing and promotions activities that will encourage sustained tourism interest
in the Philippines and that will address the adverse effects of these emergencies.
Section 57. Exemption From Payment of Corporate Income Tax. - Notwithstanding any
provision of existing laws, decrees, executive orders to the contrary, the TPB shall be exempt
from the payment of corporate income tax, as provided under the National Internal Revenue
Code (NIRC) of 1997, as amended.
Section 58. Membership. - The TPB shall be open for membership to entities, groups and
individuals with economic, social or cultural interest in travel trade, congresses and conventions
CHAPTER IV
TOURISM ENTERPRISE ZONES
SUBCHAPTER IV - A. TOURISM ENTEWRISE ZONES
Section 59. Tourism Enterprise Zones. - Any geographic area with the following characteristics
may be designated as a Tourism Enterprise Zone:
(a) The area is capable of being defined into one contiguous territory;
(b) It has historical and cultural significance, environmental beauty, or existing or

potential integrated leisure facilities within its bounds or within reasonable distances
from it;
(c) It has, or it may have, strategic access through transportation infrastructure, and
reasonable connection with utilities infrastructure systems;
(d) It is sufficient in size, such that it may be further utilized for bringing in new
investments in tourism establishments and services; and
(e) It is in a strategic location such as to catalyze the
Section 60. Designation of TEZs. - The TIEZA shall designate TEZs, upon the recommendation
of any LGU qr private entity, or through joint ventures between the public and the private
sectors. Such designation shall be subject to the provisions of this Act and to minimum
requirements which the TIEZA shall subsequently promulgate.
TEZs shall not proliferate in a manner that diminishes their strategic economic and
developmental value to the national economy.
Section 61. Development Planning. - Each application for designation as a TEZ shall be
accompanied by a development plan which shall, consistent with principles of economic,
socioeconomic development of neighboring communities. cultural and environmentally
sustainable development, specifically identify:
(a) Tourism focal points and resources available within the proposed TEZ and adjoining
areas;
(b) Features which satisfy the requisites for the designation of a TEZ enumerated under
Section 59 of this Act;
(c) Areas for infrastructure development, for investment, and for preservation, as well as
the kind of development, nature of investment or sustainable activities allowed within
preserved areas, respectively;
(d) Medium - and long - term studies on market trends, and corresponding development
strategies for the TEZ;
(e) Studies on the economic impact of development within the TEZ and in surrounding
communities;
(f) Studies on the environmental, cultural and social carrying capacity of the TEZ and
surrounding communities;
(g) Design plans for structures which incorporate design and sustainability principles
from local architecture and the surrounding environment; and
(h) Such other information that the TIEZA may require.
No TEZ shall be designated without a development plan duly approved by the TIEZA and
without the approval, by resolution, of the LGU concerned. Any deviation or modification from
the development plan shall require the prior authorization of the TIEZA. The TIEZA may cause
the suspension of granted incentives and withdrawal of recognition as a TEZ operator. It may
likewise impose reasonable fines and penalties upon TEZ operators and responsible persons for
any failure to properly implement the approved development plan.
Lands identified as part of a TEZ shall qualify for exemption from the coverage of Republic Act
No. 7279, otherwise known as the Urban Development and Housing Act of 1992, and Republic
Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law, subject to rules
and regulations to be crafted by the TIEZA, the Housing and Urban Development Coordinating
Council and the Department of Agrarian Reform.
Section 62. Operation of TEZs. - The TEZ proponent shall establish a corporate entity, to be
known as the TEZ operator, which shall administer the TEZ and supervise its activities. The
designation of a TEZ does not vest ownership of the resources therein upon the TEZ operator.
Where the TEZ operator possesses rights to land or other resources within the TEZ, the TEZ
operator shall be entitled to exercise such rights as allowed by existing laws in a manner
consistent with the duly - approved development plan as provided above.
Where rights to land and other resources within the TEZ are vested in a private third party, the
TEZ operator shall encourage the private third party to participate in policy making, planning
and program development and implementation by encouraging its registration as a tourism
enterprise where appropriate, and through the judicious administration of incentives and
provision of services.
Except as herein provided, the LGUs which comprise, overlap, embrace or include a TEZ in their
territorial jurisdictions shall retain their basic autonomy and identity in accordance with the
Local Government Code.
The government shall encourage, facilitate and provide incentives for private sector participation
in the construction and operation of public utilities and infrastructure in the TEZs using any of
the schemes allowed under Republic Act No. 6957, as amended, otherwise known as the Build -
Operate - and - Transfer Law.
SUBCHAPTER IV - B. TOURISM INFRASTRUCTURE AND ENTERPRISE ZONE

AUTHORITY
Section 63. The Tourism Infrastructure and Enterprise Zone Authority. - Under the supervision
of the Secretary and attached to the Department for purposes of program and policy coordination
shall be a body corporate known as the Tourism Infrastructure and Enterprise Zone Authority
(TIEZA).
Section 64. Mandate. - The TIEZA shall be a body corporate which shall designate, regulate and
supervise the TEZs established under this Act, as well as develop, manage and supervise tourism
infrastructure projects in the country. It shall supervise and regulate the cultural, economic and
environmentally sustainable development of TEZs toward the primary objective of encouraging
investments therein. It shall ensure strict compliance of the TEZ operator with the approved
development plan. Pursuant thereto, the TIEZA shall have the power to impose penalties for
failure or refusal of the tourism enterprises to comply with the approved development plan,
which shall also be considered a violation of the terms of accreditation. Such power shall further
be defined under the implementing rules and regulations of this Act.
The TIEZA shall continue to exercise functions previously exercised by the PTA under
Presidential Decree No. 564, unless otherwise inconsistent with the other provisions of this Act.
It shall however cease to operate the DFP.
In addition to its mandate to regulate and supervise TEZs, the TIEZA shall likewise be deemed a
government infrastructure corporation under the provisions of Executive Order No. 292,
otherwise known as the Administrative Code of 1987.
Tourism enterprises outside of TEZs and without accreditation shall be governed by pertinent
laws, rules and regulations.
Section 65. Board of Directors. - The TIEZA shall be governed and its powers exercised by a
Board of Directors ("TIEZA Board"), composed as follows:
(a) The Department Secretary, as Chairperson;
(b) The TIEZA Chief Operating Officer, as Vice Chairperson;
(c) The TPB Chief Operating Officer;
(d) The DPWH Secretary;
(e) The DENR Secretary;
(f) The DILG Secretary: and
(g) Five (5) representative directors, to be appointed by the President, upon the
recommendation of the Tourism Congress from a list of at least three (3) nominees per
group as enumerated in Section 67. They must be Filipinos with recognized competence
in business management, marketing, finance, tourism and other related fields and shall
serve a term of office of three (3) years, which term may be extended for a period not
exceeding three (3) years.
The Secretaries of the DPWH, the DENR and the DILG shall each designate a permanent
representative in the Board, who must possess relevant experience. The permanent representative
shall be duly authorized to act on behalf of the Secretary in his or her absence.
The Chairperson of the TIEZA Board shall have voting rights in case of a tie.
The TIEZA Board shall appoint a corporate secretary whose functions shall include the
Section 66. The Chief Operating Officer. - The TIEZA shall have a Chief Operating Officer who
must be a Filipino, with a bachelor’s degree in any of the following fields: business, law,
tourism, public administration or other relevant fields and have demonstrated expertise therein.
He or she must have been engaged in a managerial capacity for at least five (5) years prior to his
or her appointment. He or she shall be elected by the Board from a list of qualified applicants
and appointed by the Secretary, and shall have a term of office of six (6) years, unless removed
for cause in accordance with law.
Section 67. Representative Directors. - The five (5) representative directors shall represent each
of the following groups:
(a) Tourism estate development and management services;
(b) Accommodation enterprises;
(c) Air, sea and land tourism transport services;
(d) Travel and tours enterprises: and
(e) Other tourism enterprises.
If a representative director ceases to be connected with the sector he or she represents, a new
representative director shall be appointed to serve the unexpired term.
Section 68. Meetings of the Board. - The TIEZA Board shall meet at least once a month at the
principal office of the TIEZA, unless the TIEZA Board previously agreed in writing to meet at
another location.
Section 69. General Powers and Functions of the TIEZA Board. - The TIEZA Board shall have
the general powers of a corporation as provided under the Corporation Code. Furthermore, it
shall also have the following powers:
(a) Organize the TIEZA in a manner most efficient and economical for the conduct of its
business and the implementation of its mandate;
(b) Develop policies, plans and programs in coordination with the Department for the
development and operation of TEZs and adopt rules and regulations necessary for the
implementation of the provisions of this Act;
(c) Enter into, make, perform and carry out contracts of every class, kind and description
which are necessary or incidental to the realization of its purposes with any person, firm
or corporation, private or public, and with foreign government entities;
(d) Contract loans, indebtedness and credit, issue commercial papers and bonds, in any
local or convertible foreign currency from international financial ,institutions, foreign
government entities, and local or foreign private commercial banks or similar institutions
under such terms and conditions prescribed by law, rules and regulations;
(e) Execute any deed of guarantee, mortgage, pledge, trust or assignment of any property
for the purpose of financing the programs and projects deemed vital fos the early
attainment of its goals and objectives, subject to the provisions of Article VI, Section 20
and Article XII, Section 2, paragraphs (4) and (6) of the Constitution;
(f) Construct, own or lease, operate and maintain infrastructure facilities or enter into
joint ventures, and grant franchises for, and supervise the operation of, public utilities
within TEZs, in coordination with LGUs and agencies concerned;
(g) Undertake, or authorize the undertaking of, reclamation projects within TEZs;
(h) Preserve, restore or reconstruct all national cultural treasures and shrines located
within TEZs, in coordination with the National Museum and other concerned agencies;
(i) Receive donations, grants, bequests and assistance of all kinds from local and foreign
governments and private sectors and utilize the same;
(j) Exercise eminent domain and police power, including, but not limited to, the power to
recommend to the Department the removal of structures which may be considered
nuisances per se or which impede or impair the enjoyment of historical, cultural and
natural endowments;
(k) Coordinate with LGUs and other government agencies for the provision of basic
services, utilities and infrastructure required by TEZs;
(l) Review and approve proposals for the designation of TEZs based on the criteria
provided herein, and approve, facilitate and assist in the organization of TEZ operators;
(m) Regulate and supervise the operations of TEZ operators, review and ensure
compliance with the development plans, and establish and implement other policies,
plans and programs for the development and operation of TEZs;
(n) Register, monitor and regulate enterprises seeking to invest and operate within a TEZ,
and approve and grant incentives to such registered enterprises as provided under this
Act; and
(o) Exercise the general powers of a corporation.
Section 70. Powers and Functions of the Chief Operating Officer. - In addition to those stated in
Section 23 of Presidential Decree No. 564 on the powers of the former General Manager of the
PTA, which are hereby adopted under this Act, the Chief Operating Officer shall implement the
policies, plans and programs of the TIEZA. He or she shall likewise exercise the following
powers and functions:
(a) Recommend to the TIEZA Board the designation of TEZs in accordance with set
policies and standards:
(b) Coordinate with the Philippine National Police and other concerned agencies of
government for the maintenance of peace and order within the TEZs;
(c) Ensure that all revenues of the TEZs are collected and applied in accordance with law;
(d) Submit to the Board the ongoing and proposed projects, work and financial programs,
annual budget of receipts and expenditures of the TEZs;
(e) Receive protests, complaints and claims concerning TEZ operators, enterprises and
residents, and make recommendations to the TIEZA Board for appropriate action;
(f) Enforce all legal easements along seashores, lakeshores, riverbanks, among others, as
provided under existing laws, rules and regulations, to allow free and open access thereto
and aid in the proper development of the national patrimony;
(g) Take such emergency measures as may be necessary to avoid fires, floods and
mitigate the effects of storms and other natural or public calamities;
(h) Recommend to the TIEZA Board all necessary acts to properly supervise the
operations of TEZ operators;
(i) Coordinate with the TPB for the promotion of tourism and the encouragement of
investments in TEZs; and
(j) Exercise such other powers and functions as are necessary to the implementation of
this Act.
Section 71. Capitalization. - The TIEZA shall have an authorized capital of Two hundred fifty
million pesos (Php250,000,000.00) which shall be fully subscribed by the national government.
Section 72. Funding. - The TIEZA shall obtain the funds for its operations from the following:
(a) Fifty percent (50%) of the proceeds from travel tax collections;
(b) A reasonable share from the collections of the Office of Tourism Resource
Generation, to be determined by the Department;
(c) Income from projects managed by the TIEZA; and
(d) Subsidies or grants from local and foreign sources that may be received by the
TIEZA.
At least five percent (5%) from the travel tax collection which shall accrue to the TIEZA shall be
earmarked for the development of historic, cultural, religious and heritage sites and prime tourist
destinations. Another five percent (6%) shall be earmarked for the development of ecotourism
sites in depressed provinces with strong tourism potentials.
Section 73. Collection and Allocation of Travel Taxes. - For purposes of this Act, the TIEZA
shall be the principal agency responsible for the timely collection of travel taxes.
Amounts to be collected by the TIEZA shall be distributed in the manner provided for under this
Act: Provided,That the national government shall look for alternative funding sources for
programs funded by the travel tax in the event of a phase out of travel tax collection following
international agreements.
Pursuant to Section 72 of this Act, fifty percent (50%) of the proceeds from travel tax collections
shall accrue to the TIEZA.
The government’s contribution to the Higher Education Development Fund, equivalent to forty
percent (40%) from the total gross collections of the travel tax, shall be retained: Provided that
the Commission on Higher Education (CHED) shall give priority to tourism - related educational
programs and courses. The ten percent (10%) share of the National Commission for Culture and
the Arts from the total gross collections of the travel tax shall likewise be retained.
Section 74. Exemption from Payment of Corporate Income Tax. - Notwithstanding any provision
of existing laws, decrees, executive orders to the contrary, the TIEZA shall be exempt from the
payment of corporate income tax, as provided under the NIRC.
Section 76. Survey of Resources. - The TIEZA shall, in coordination with appropriate authorities
and neighboring cities and municipalities, conduct a survey of the physical and natural assets and
potentials of the TEZ areas under its jurisdiction.
Section 76. Registration. - Tourism enterprises within a TEZ shall register with the TIEZA to
avail of incentives and benefits provided for in this Act.
Section 77. One - Stop Shop Processing. - The TIEZA shall establish offices where prospective
TEZ investors can register to obtain the incentives and benefits under this Act and all necessary
permits and licenses from all national and local government offices. All government agencies
shall coordinate with the TIEZA for the issuance of such permits and licenses. The TlEZA shall
collect fees necessary for the issuance of these permits and licenses.
Section 78. Investigation and Inquiries. - Upon a written formal complaint made under oath,
which on its face provides reasonable basis to believe that some anomaly or irregularity may
have been committed within TEZs, the TIEZA Chief Operating Officer shall have the power to
inquire into and investigate the conduct of TEZ operators, registered enterprises and/or their
employees. For this purpose, he or she may subpoena witnesses, administer oaths and compel the
production of books, papers and other evidence. The TIEZA Chief Operating Officer shall
thereafter make a recommendation to the TIEZA Board for appropriate action.
SUBCHAPTER IV - C. TEZ ADMINISTRATION
Section 79. Administration of TEZs. - Each TEZ shall be administered and supervised by a TEZ
operator. A TEZ operator shall be an entity duly incorporated under the Corporation Code and
other relevant laws, unless the TEZ operator is a LGU or any other instrumentality of the
government in the pursuit of their mandates, where capital may be provided by LGUs and/or
private entities.
Section 80. Articles of Incorporation and Bylaws of TEZ Operators. - Except as provided herein
and as may be provided by rules and regulations duly promulgated by the TIEZA, each duly
incorporated TEZ operator shall draft its articles of incorporation and bylaws in accordance with
the Corporation Code.
Section 81. Boards of Directors and Consultative Bodies of TEZ Operators. - The seats of the
Board of Directors of a TEZ operator shall be allocated pro - rata according to the respective
capital contributions of the TEZ operator’s shareholders.
TEZ operators are encouraged to reserve seats on their Boards of Directors for relevant interest
groups, such as those representing environmental, religious, cultural, TEZ investors’, TEZ
residents’ and other interests. In ally case, TEZ operators may form consultative bodies for such
special interest groups to assist them in the formulation and implementation of policies, plans
and projects.
Section 82. TEZ Administrator. - The Board of Directors of each TEZ operator shall appoint its
TEZ Administrator, who shall be responsible for implementing the policies, plans and projects of
the TEZ operator's Board of Directors. The TIEZA shall provide guidelines on the necessary
educational and practical qualifications required of a TEZ Administrator. In addition to such
qualifications, all TEZ Administrators must undergo and pass a training program of the
Department to provide TEZ Administrators with knowledge and skills relevant to the operation
of the TEZ.
Section 83. Civil Dispute Resolution. - The TIEZA shall establish a civil dispute mediation
office to effectively and efficiently resolve civil disputes concerning tourism enterprises and/or
tourism - related issues within a TEZ where at least one of the parties to the dispute was residing
in the TEZ at the time the dispute arose, and is still residing within the TEZ at the time the
complaint is filed with the mediation office. No civil dispute may be filed in court without
having undergone mediation proceedings as provided under this section except in extraordinary
cases where a party may suffer irreparable damage. The TIEZA shall charge reasonable fees for
civil dispute mediation. This provision is without prejudice to the application of the rules
pertaining to Katarungang Pambarangay with respect to other matters.
Section 84. Labor Dispute Resolution. - To resolve disputes between workers and employers 'for
any violation of Presidential Decree No. 442, as amended, otherwise known as the Labor Code
of the Philippines, the TIEZA shall, in coordination with the Department of Labor and
Employment DOLE), establish a labor dispute resolution office to mediate between workers and
employers.
CHAPTER V
INCENTIVES
Section 85. General Principles on the Grant and Administartion Incentives
(a) Recognizing the strategic economic importance of tourism, the necessity that
investments within TEZs be properly coordinated with environmental, cultural and
developmental imperatives, and the fundamental differences between the export
manufacturing and tourism industries, the TIEZA shall have sole and exclusive
jurisdiction to grant the incentives hereinafter provided.
In the formulation of rules and regulations defining and implementing these incentives,
and without derogating therefrom, the TIEZA may coordinate with the Board of
Investments and other government agencies or entities responsible for the grant and
administration of incentives to assist in the development of a rationalized national
investment incentive policy.
In the grant of incentives, it shall give equal preference to large investments, those with
great potential for employment generation and those of local small and medium
enterprises. Registered tourism enterprises owned and operated by overseas Filipino
investors shall enjoy the same incentives granted to TEZ operators and registered
enterprises in general. The amount of required investments shall be defined in the
implementing rules and regulations of this Act. The incentive schemes set forth in
Sections 86, 87 and 88 shall be in effect for a period of ten (10) years from the effectivity
of this Act, which period is subject to review by the Joint Congressional Oversight
Committee on Tourism.
The TIEZA shall further coordinate with the Bureau of Customs and the Bureau of
Internal Revenue in the preparation and enforcement of rules and regulations to prevent
the abuse of these incentives.
The jurisdiction of the TIEZA in the grant and administration of incentives shall not be
impliedly repealed or modified.
(b) The Department and the DTI shall promulgate rules and regulations to govern the
relationship between TEZs created under this Act, and economic zones created under
Republic Act No. 7227, otherwise known as the Bases Conversion and Development Act
of 1992, and Republic Act No. 7916, as amended, otherwise known as the Special
Economic Zone Act of 1995, where an area comprising a TEZ overlaps, falls within or
encompasses that of an economic zone: Provided, That such rules and regulations shall
consider the special nature and requirements of tourism in relation to other industries,
establishments and operations in economic zones. TEZs proclaimed as such prior to the
passage of this Act shall be transferred to the supervision of the TIEZA.
(c) The investment incentives offered under this Act shall be without prejudice to
availing other incentives provided under other laws, decrees and presidential issuances.
However, where such other laws, decrees or presidential issuances provide for similar or
identical incentive schemes, the investor may only elect to avail of the scheme provided
under one particular law, decree or presidential issuance.
(d) LGUs are likewise encouraged to provide incentives for tourism enterprises through,
among others, reductions in applicable real estate taxes and waivers of fees and charges,
among others. Should a LGU grant such incentives, it shall report the same to the
Department and the TPB to assist in the marketing and promotions of investment in that
LGU.
SUBCHAPTER V - A. INCENTIVES FOR TEZ OPERATORS AND REGISTERED

TOURISM ENTERPRISES
Section 86. Fiscal Incentives Available to TEZ Operators and Registered Enterprises. - The
following incentives may, in the discretion of the TIEZA Board, be granted to registered tourism
enterprises within TEZs:
(a) Income Tax Holiday. New enterprises in Greenfield and Browdeld Tourism Zones
shall, from the start of business operations, be exempt from tax on income for a period of
six (6) years. This income tax holiday may be extended if the enterprise undertakes a
substantial expansion or upgrade of its facilities prior to the expiration of the first six (6)
years.
This extension shall consider the cost of such expansion or upgrade in relation to the
original investment, but shall in no case exceed an additional six (6) years. These
enterprises shall likewise be allowed to carry over as deduction from the gross income for
the next six (6) consecutive years immediately following the year of the loss, their net
operating losses for any taxable year immediately preceding the current taxable year
which had not been previously offset as deduction from gross income.
An existing enterprise in a Brownfield Tourism Zone shall likewise enjoy the incentives
extended to new enterprises in Green6eld and Brownfield Tourism Zones mentioned in
the preceding paragraph. An existing enterprise in a Brownfield Tourism Zone shall be
entitled to avail of a non - extendible income tax holiday if it undertakes an extensive
expansion or upgrade of facilities. Such an income tax holiday shall consider the cost of
such expansion or upgrade in relation to the original investment, but shall in no case
exceed six (6) years to be counted from the time of completion of the expansion or
upgrade: Provided, That capital expenditures subject to income tax holiday shall be
understood to mean money spent to acquire or upgrade physical assets, such as buildings,
machinery and equipment, intended to extend the life of an asset or increase the capacity
or efficiency of a tourism enterprise that benefit the current and future periods: Provided,
further, That in case of expansion involving the improvement of existing structures or
constructing new ones, such expansion shall consider the substantial amount infused, the
substantial number of rooms added or constructed and, where applicable, their change in
classification from three - star to five - star establishments.
The provisions of this subsection shall likewise apply to tourism enterprises outside the
zones.
(b) Gross Income Taxation. In lieu of all other national and local taxes, license fees,
imposts and assessments, except real estate taxes and such fees as may be imposed by the
TIEZA, a new enterprise shall pay a tax of five percent (5%) on its gross income earned,
which shall be distributed as follows:
(1) One - third to be proportionally allocated among affected LGUs;
(2) One - third to the national government; and
(3) One - third to the TIEZA for the funding of its operations and its programs in
the TEZs, which shall include the protection, maintenance and enrichment of the
environment, tangible cultural and historical heritage, and the intangible cultural
heritage of communities within and surrounding the TEZs.
Gross income as used herein is defined under Section 27(A) of the NIRC, and further
defined under relevant rules and regulations.
(c) Capital Investment and Equipment. Subject to rules and regulations which properly
define capital investments and equipment necessary for various kinds of tourism
enterprises, registered enterprises shall be entitled to an exemption of one hundred
percent (100%) of all taxes and customs duties on importations of capital investment and
equipment.
(d) Transportation and Spare Parts. Importation of transportation and the accompanying
spare parts of new and expanding registered enterprises shall be exempt from customs
duties and national taxes: Provided,That they are not manufactured domestically in
sufficient quantity, of comparable quality and at reasonable prices, and that they are
reasonably needed and will be used exclusively by an accredited tourism enterprise.
(e) Goods and Services. Subject to rules and regulations which properly define goods and
services necessary for various kinds of tourism enterprises, registered enterprises shall be
entitled to the following: (1) Importation of goods actually consumed in the course of
services actually rendered by or through registered enterprises within a TEZ shall enjoy
one hundred percent (100%) exemption from all taxes and customs duties: Provided,
however, That no goods shall be imported for the purpose of operating a wholesale or
retail establishment in competition with the DFPC; and
(2) A tax credit equivalent to all national internal revenue taxes paid on all locally
- sourced goods and services directly or indirectly used by the registered
enterprise for services actually rendered within the TEZ.
(f) Social Responsibility Incentive. A registered enterprise shall be entitled to a tax

deduction equivalent to a reasonable percentage, not exceeding fifty percent (60%), of the
cost of environmental protection or cultural heritage preservation activities, sustainable
livelihood programs for local communities, and other similar activities.ten.lihpwal
Section 87. Non - fiscal Incentives Available to TEZ Operators and Registered Tourism
Enterprises. - The following incentives may, in the discretion of the TIEZA Board, be granted to
registered tourism enterprises within TEZs:
(a) Employment of Foreign Nationals. A registered enterprise may employ foreign
nationals in executive, supervisory, technical or advisory positions for such reasonable
periods and under such terms as may be provided by the TIEZA Board, with due regard
for the proper protection and representation of foreign investments in registered
enterprises, and the need to ensure easy travel into and out of the Philippines by such
nationals and their immediate families;
(b) Special Investor’s Resident Visa. Under such terms as may be provided by the TIEZA
Board, a foreign national who shall have made an investment with a value of at least Two
hundred thousand dollars (USD200,OOO.OO) in a registered enterprise shall be entitled
to a special investor’s resident visa. With such visa, the foreign national shall be entitled
to reside in the Philippines while his or her investment subsists. Subject to regulations to
be issued by the Bureau of Immigration (BI), the TIEZA shall issue working visas
renewable every two (2) years to foreign personnel and other aliens, possessing highly -
technical skills which no Filipino within the TEZ possesses, after they have secured Alien
Employment Permits (AEP) from the DOLE. The names of aliens granted permanent
resident status and working visas by the TIEZA shall be reported to the BI within thirty
(30) days after issuance thereof;
(c) Foreign Currency Transactions. Subject to the provisions of Section 72 of Republic

Act No. 7653, as amended, otherwise known as the New Central Bank Act:
(1) Repatriation of Investments. In the case of foreign investments, the right to

repatriate the entire proceeds of the liquidation of the investment in the currency
in which the investment was originally made and at the exchange rate prevailing
at the time of repatriation.
(2) Remittance of Foreign Exchange. The right to remit earnings from a foreign
investment in the currency in which the investment was originally made and at the
exchange rate prevailing at the time of remittance.
(3) Foreign Loans and Contracts. The right to remit at the exchange rate
prevailing at the time of remittance such sums as may be necessary to meet the
payments of interest and principal on foreign loans and foreign obligations arising
from technological assistance contracts.
(d) Requisition of Investment. There shall be no requisition of the property of registered

enterprises, except in the event of war or national emergency, and only for the duration
thereof. In any case, the affected person shall be entitled to just compensation, and shall
have the right to repatriate such compensation as provided in paragraph (c) above; and (e)
Lease and Ownership of Land. Without prejudice to existing laws regulating the
ownership of land by individuals and corporations, and consistent with the provisions of
Republic Act No. 7652, otherwise known as the Investor’s Lease Act, lands and buildings
in each TEZ may be leased to foreign investors for a period not exceeding fifty (50)
years, renewable once for a period of not more than twenty - five (25) years. The
leasehold right acquired under long - term contracts may be sold, transferred or assigned,
subject to the conditions set forth under the Investor’s Lease Act.
SUBCHAPTER V - B. TOURISM ENTERPRISES OUTSIDE TEZS
Section 88. Incentives Available to Tourism Enterprises Outside TEZs. - The grant of fiscal and
other incentives to tourism enterprises not located within TEZB shall be governed by the
following provisions:
(a) Upon compliance with the requirements provided by law, they shall be entitled to
avail of any economic incentives found under existing laws, such as Executive Order No.
226 (1987), otherwise known as the Omnibus Investments Code; Republic Act No. 7042,
as amended by Republic Act No. 8179, otherwise known as the Foreign Investments Act;
the Special Economic Zone Act; and the Bases Conversion and Development Act, among
others, subject to the last paragraph of Section 86(a), at the option of the said enterprises.
(b) Subject to rules and regulations jointly promulgated by the Department and the
TIEZA, an existing accommodation establishment not located within a TEZ shall be
entitled to claim an income tax holiday for up to six (6) years for any significant
expansion, renovation or upgrade in its facilities in relation to the amount of the original
investment. They shall also be entitled to import capital equipment free of taxes and
duties when necessary for such expansion, renovation or upgrade.
(c) Tourism enterprises may avail of incentives under the Omnibus Investments
Code: Provided, That:
(1) Tourism activities shall always be included in the Investment Priorities Plan;
(2) Rules and regulations concerning the grant of incentives to tourism enterprises
shall be jointly formulated by the Board of Investments and the Department;
(3) The income tax holiday provided under Section 39.1 of the Omnibus
Investments Code shall also apply to existing accommodation enterprises
undergoing substantial capital infusion for expansion or substantial upgrade of
facilities; and
(4) Accredited tourism enterprises shall be entitled to import transportation and

accompanying spare parts free of taxes and duties: Provided, however, That such
transportation shall be exclusively used by the enterprise in its operations,
and: Provided, further, That such are not manufactured domestically in sufficient
quantity, comparable quality and prices.
(d) Tourism enterprises located in special economic zones, created under the Special
Economic Zone Act or by special charter, shall continue to be governed by the same.
(e) The incentives offered under this Act shall be without prejudice to the availment of
other incentives provided under other laws, such as, but not limited to, those concerning
infrastructure, or micro - , small - and medium enterprises. However, where such laws
provide for similar incentive schemes as those contained herein, the investor may elect to
avail of the scheme provided only under one particular law, decree or issuance.
CHAPTER VI
DUTY AND TAX - FREE MERCHANDISING SYSTEM FOR TOURISM PURPOSES
Section 89. Duty Free Philippines Corporation. - The Duty Free Philippines shall be reorganized
to become the Duty Free Philippines Corporation (DFPC), which shall be attached to the
Department.
Section 90. Mandate. - The DFPC shall be a body corporate to operate the duty - and tax - free
merchandising system in the Philippines to augment the service facilities for tourists and to
generate foreign exchange and revenue for the government, as established by the Department
under Executive Order No. 46.
In the performance of its functions, the DFPC shall have all the general powers of a corporation
established under the Corporation Code, in furtherance of its charter.
The DFPC shall have the exclusive authority to operate or franchise out stores and shops that
would sell, among others, duty. and tax - free merchandise, goods and articles, in international
airports and seaports, and in TEZs and ports of entry throughout the country in a manner that
(a) Is competitive with international standards;
(b) Effectively showcases Philippine culture, craftsmanship and industry; and
(c) Efficiently and effectively generates foreign exchange.
Such merchandise, goods and articles shall only be sold to persons departing for abroad. Under
such limitations, rules and regulations that may be provided by the Department and in
consultation with the Department of Finance (DOF), such merchandise, goods and articles may
be sold to passengers arriving into the Philippines from abroad, including those covered by the
existing Balikbayan Program, under Republic Act No. 6768, as amended.
The DFPC shall likewise be authorized to operate stores and shops within the immediate vicinity
of international airports and seaports to service the requirements of the international duty - free
market.
The DFPC shall operate without prejudice to any privatization in the future, subject to existing
laws on privatization and procedures on public bidding.
Section 91. The DFPC Board of Directors. - The DFPC shall be governed by a Board of
Directors, composed as follows:
(a) The Department Secretary, as Chairperson;
(b) The Chief Operating Officer of the DFPC, as Vice Chairperson;
(c) The DOF Secretary;
(d) The DTI Secretary; and53
(e) Three (3) representative directors, to be appointed by the President, upon the
recommendation .of the Tourism Congress, who must be Filipinos with recognized
competence in business management, marketing, finance, tourism and other related fields
and shall serve a term of office of three (3) years, which term may be extended for a
period not exceeding three (3) years: Provided, That there shall be no conflict of interest
in any matter concerning the operations of the DFPC.
The Secretaries of the DOF and the DTI shall each designate a permanent representative in the
Board, who must possess relevant experience. The permanent representative shall be duly
authorized to act on behalf of the Secretary in his or her absence.
The Chairperson of the DFPC Board shall have voting rights in case of a tie.
The DFPC Board shall appoint a corporate secretary whose functions shall include the
Section 92. The Chief Operating Officer. - The DFPC shall have a Chief Operating Officer who
must be a Filipino, with a bachelor's degree in any of the following fields: business, law, tourism,
public administration or other relevant fields and have demonstrated expertise therein. He or she
must have been engaged in a managerial capacity for at least five (5) years prior to his or her
appointment. He or she shall be elected by the Board from a list of qualified applicants and
appointed by the Secretary, and shall have a term of office of six (6) years, unless removed for
cause in accordance with law.
Section 93. Capitalization and Funding. - The DFPC shall have an authorized capitalization of
Five hundred million pesos (Php500,000,000.00) which shall be fully subscribed by the national
government. A minimum of fifty percent (50%) of the annual net profits of the DFPC shall be
remitted automatically to the Office of the Secretary to fund tourism programs and projects, in
lieu of its statutory remittance to the national government under Republic Act No. 7656, seventy
percent (70%) of which shall be given to the TPB.
Section 94. General Powers and Functions of the DFPC. - The DFPC Board shall have the
power to sue and be sued; to contract and be contracted with; to own and hold such real and
personal property as shall be necessary for corporate purposes; to receive real and personal
property by gift, devise or bequest: to adopt a seal and alter the same; to adopt bylaws, rules and
regulations; to exercise all the general powers of a corporation under the Corporation Code; and
to perform all such acts as may be necessary to carry out this section.
Section 95. Duty and Tax Exemptions. - Consistent with the nature of its operations and primary
function to operate as a tax - and duty - free merchandising system, and to enable it to compete in
the international tax - and duty - free market, DPPC shall be entitled to exemption from the
following:
(a) Duties and taxes, including excise and VAT, relative to the importation of
merchandise for sale;
(b) Local taxes and fees imposed by the LGUs; and
(c) Corporate income taxation.
CHAPTER VII
INCREASED TOURIST ACCESS
Section 96. International and Domestic Tourist Travel. - The Department, through the
development of an inter - modal international and domestic land, sea and air access system, and
in coordination with relevant government agencies, shall increase and improve the accessibility
of the Philippines to domestic and foreign tourists. Realizing the critical importance of the
progressive development of the civil aviation environment in the advancement of the country's
international and domestic tourism sector:
(a) The Secretary shall be the ex officio Vice Chairperson of the Civil Aviation Board;
(b) The Secretary shall be the ex officio Vice Chairperson
(c) The Secretary shall be authorized to appoint a representative to the board of directors
of each international seaport of the Philippines; and of the governing boards of all
international airports;
(d) The Secretary shall be a member of the Civil Aviation Authority of the Philippines
Board.
To enhance the standards of transportation services for tourist use, the Department and the
relevant government agencies shall develop an integrated, one - stop shop system for the speedy
issuance of franchises and accreditation for tourism transport operators.
Section 97. Visas. - The Department, the DFA and the Department of Justice shall develop a
system of granting visas that encourages the arrival and longer stay of tourists in the Philippines.
CHAPTER VIII
CREATING A CULTURE OF TOURISM
Section 98. Tourism Coordinating Council. - A council that shall serve as a coordinating body
for national tourism development efforts shall be formed, consisting of the Secretary, as
Chairperson; the TPB Chief Operating Officer; the TIEZA Chief Operating .Officer; the heads of
other agencies attached to the Department; the Secretaries of the DOTC, the DPWH, the DFA,
the DENR, the DILG, the DOLE and the Department of Education (DepEd); and the heads of the
Philippine National Police (PNP), the BI, the National Historical Institute, the National
Commission for Culture and the Arts, the PAGCOR, the leagues of LGUs and such other
government agencies that the President may designate; a representative each from the Tourism
Congress, an accredited NGO or PO engaged in ecotourism, and a recognized indigenous
people’s federation.
The Council shall prepare a five (5) - year strategic plan to develop and enhance a culture of
tourism. It shall also approve an annual infrastructure development plan that shall promote
access to and from airports and seaports, and TEZ and other tourism destinations which shall be
accorded priority by the relevant infrastructure agencies of the national government.
Section 99. Education. - The Department shall work closely with the DepEd for the development
of basic education programs - formal, informal and non - formal learning systems and
interventions - for in - school and out - of - school youth in the promotion of a cultwe of tourism
through the development and integration of tourism concepts and the enhancement of education
in languages, history and culture and the arts.
The Department shall also work closely with the CHED in the regulation of colleges and
universities that grant undergraduate and postgraduate degrees in tourism.
The Technical Education and Skills Development Authority is hereby mandated to develop, in
conjunction with the Department, programs for the training of tourism entrepreneurs by
providing programs for languages, history and cultural appreciation, and small business
management.
Section 100. Peace and Order. - The PNP shall establish a Tourism Security Force to assist in
maintaining peace and order within areas of high tourism traffic. A tourist police assistance desk
office shall likewise be established in such areas. The Department shall coordinate with the
DILG in training the members of the force in cultural sensitivity, languages and relevant laws.
Section 101. Funding Grassroots Tourism Enterprises. - Insofar as allowed by applicable laws
and their respective charters, government - owned and - controlled banks and financial
institutions shall provide microfinance schemes for the assistance and development of small -
and medium - scale enterprises in the tourism industry.
Section 102. No Injunctions Clause. - No temporary restraining order or preliminary injunction

shall be issued or be effective against the TIEZA unless the same is issued by the Supreme
Court.57
Section 103. Joint Congressional Oversight committee on Tourism. - A Joint Congressional

Oversight Committee on Tourism, hereinafter referred to as the "Oversight Committee", is
hereby constituted in accordance with the provisions of this Act. The Committee shall be
composed of the Chairpersons of the Committees on Tourism of both Houses of Congress, the
Chairperson of the Committee on Appropriations of the House of Representatives, the
Chairperson of the Committee on Finance of the Senate, and three (3) additional members from
each House to be designated by the Senate President and the Speaker of the House of
Representatives. The Oversight Committee shall be in existence for a period of ten (10) years
from the effectivity of this Act.
The Secretary shall report to the Oversight Committee on a monthly basis the latest statistics on
tourist arrivals and other relevant data. He or she shall also report, on a quarterly basis, the status
of implementation of this Act based on the monthly report submitted thereto by all attached
agencies of the Department with respect to the implementation of their respective programs.
Section 104. The Tourism Congress. - Within thirty (30) days from the publication of the
implementing rules and regulations of this Act, the Secretary shall convene a Tourism Congress
of representatives of all accredited tourism enterprises and former government officials involved
in the tourism industry to serve as the private sector consultative body to assist the government in
the development, implementation and coordination of Philippine tourism policy.
The Tourism Congress shall adopt and ratify its constitution, shall elect its officers and shall
establish a secretariat, both for the Tourism Congress as a whole and for component sectors. It
shall also nominate such representatives as required under this Act. Finally, it shall endeavor to
meet annually to carry out its mandate.
CHAPTER IX
MISCELLANEOUS PROVISIONS
Section 105. Personnel and Compensation. - The employees and management of the TIEZA, the
TPB and the DFPC shall be exempt from the coverage of the Salary Standardization Law.
Subject to existing constitutional and legal prohibitions on double compensation for Board
members in an ex officio capacity, the members of the TIEZA Board, the Tourism Board and the
DFPC Board shall not be entitled to compensation but may receive reasonable per diems for
attendance at regular and special Board meetings.
Section 106. Budgetary Approval. - All attached agencies of the Department shall submit their
annual budgets to the Secretary for approval, and shall furnish copies of the same to the
Oversight Committee.
The budgets of the TPB, the TIEZA and the DFPC reported to the Oversight Committee shall
contain detailed information on the compensation and benefits received by their employees.
Section 107. Implementing Rules and Regulations. - Upon consultation with stakeholders, the
Secretary shall promulgate the implementing rules and regulations of this Act within ninety (90)
days after its effectivity. The Oversight Committee shall be furnished a copy thereof immediately
after promulgation.
Section 108. Review. - This Act shall be subject to congressional review by Congress three (3)
years after its approval and every three (3) years thereafter.lawphil
Section 109. Transitory Provisions. - The transfer of powers and functions in the Department
and agencies attached thereto, as herein provided for, shall take effect within six (6) months after
the effectivity of this Act. The foregoing transfer of powers and functions shall include all
applicable funds, personnel, records, property and equipment, as may be necessary. The same
shall apply to agencies which have been attached to the Department by virtue of this Act.
As such, all offices under the Department and all attached agencies affected by the provisions of
this Act shall continue to function under their present mandates until transition is effected as
provided for under this Act.
All officers currently serving in the PCVC, the PTA and the DFP Boards shall continue to serve
the unexpired portion of the term of the position in the Boards of the TPB, the TIEZA and the
DFPC, respectively.
The heads of the agencies shall continue to serve until replaced as provided for under this Act.
Section 110. Transfer of Rights and Liabilities. - The TPB, the TIEZA and the DFPC shall, by
virtue of this Act, be subrogated to all rights and assume all liabilities of the PCVC, the PTA and
the DFP, respectively, in accordance with pertinent laws, rules and regulations.
Section 111. Repealing Clause. - The provisions of Executive Order No. 120 (Reorganizing the
Ministry of Tourism, Defining its Powers and Functions and for Other Purposes); Executive
Order No. 292, as amended (The Administrative Code of 1987); Presidential Decree No. 189, as
amended, (Creating the Philippine Tourism Authority); Presidential Decree No. 1448, as
amended, (Creating the Philippine Convention and Visitors Corporation); Executive Order No.
46 (Granting the Department of Tourism, Through the Philippine Tourism Authority, Authority
to Establish and Operate a Duty - and Tax - Free Merchandising System); Executive Order No.
30 (Creating an Executive Committee for the Development of Quezon Memorial, Luneta and
Other National Parks); Presidential Decree No. 37 (Creating the Nayong Pilipino Foundation);
Presidential Decree No. 1616 (Creating the Intramuros Administration); Presidential Decree No.
442, as amended (Labor Code); Republic Act No. 7160 (The Local Government Code); Republic
Act No. 7722 (Creating the Commission on Higher Education); Republic Act No. 9497 (Creating
the Civil Aviation Authority of the Philippines); and all other laws, presidential decrees,
executive orders, proclamations and administrative regulations inconsistent with the provisions
of this Act are hereby amended, modified, superseded or repealed accordingly.
Section 112. Separability Clause. - In the event that any provision of this Act or parts thereof be
declared unconstitutional, such declaration shall not affect the validity of the other provisions.
Section 113. Effectivity Clause. - This Act shall take effect thirty (30) days after its publication
in the Official Gazette or in at least two (2) newspapers of national circulation.
Approved,
PROSPERO C. NOGRALES JUAN PONCE ENRILE

Speaker of the House of Representatives President of the Senate
This Act which is a consolidation of Senate Bill No. 2213 and House Bill No. 5229 was finally
passed by the Senate and the House of Representatives on March 6,2009 and March 4, 2009,
respectively.
MARILYN B. BARUA-YAP EMMA LIRIO-REYES

Secretary General House of Representatives Secretary of the Senate
Approved: May 13, 2009
GLORIA MACAPAGAL - ARROYO


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Republic of the Philippines

Congress of the Philippines

[REPUBLIC ACT NO. 10351]

AN ACT RESTRUCTURING THE EXCISE TAX ON ALCOHOL AND TOBACCO

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

“(a) Effective on January 1, 2013

“(b) Effective on January 1, 2015

“Any manufacturer or importer who, in violation of this Section, misdeclares or misrepresents in

“Any manufacturer or importer who, in violation of this Section, misdeclares or misrepresents in

“Effective on January 1, 2013

“Effective on January 1, 2014

“Effective on January 1, 2015

“Effective on January 1, 2016

“Any manufacturer or importer who, in violation of this Section, misdeclares or misrepresents hi

“(1) Effective on January 1, 2013

“Effective on January 1, 2013, Twelve pesos (P12.00) per pack;

“Effective on January 1, 2014, Fifteen pesos (P15.00) per pack;

“Effective on January 1, 2015, Eighteen pesos (P18.00) per pack;

“Effective on January 1, 2016, Twenty-one pesos (P21.00) per pack; and

“Effective on January 1, 2017, Thirty pesos (P30.00) per pack.

“Effective on January 1, 2013

“Effective on January 1, 2014

“Effective on January 1, 2015

“Effective on January 1, 2016

“Any manufacturer or importer who, in violation of this Section, misdeclares or misrepresents in

“SEC. 131. Payment of Excise Taxes on. Imported Articles. –

“(3) Cooperative programs to assist tobacco farmers in planting alternative crops or

“The Department of Budget and Management, in consultation with the Department of

SEC. 11. Congressional Oversight Committee. – The composition of the Congressional

(Sgd.) FELICIANO BELMONTE JR.

Approved: DEC 19 2012

(Sgd.) MARILYN B. BARUA-YAP

(Sgd.) BENIGNO S. AQUINO III

Republic Act No. 9334

AN ACT INCREASING THE EXCISE TAX RATES IMPOSED ON ALCOHOL AND

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

"'Spirits or distilled spirits' is the substance known as ethyl alcohol, ethanol or

"'Proof spirits' is liquor containing one-half (1/2) of its volume of alcohol of a

"'Net retail price', as determined by the Bureau of Internal Revenue through a

"New brands, as defined in the immediately following paragraph, shall initially be

"Any downward reclassification of present categories, for tax purposes, of existing

"New brands, as defined in the immediately following paragraph, shall initially be

"Any downward reclassification of present categories, for tax purposes, of existing

"Any manufacturer or importer who, in violation of this Section, knowingly misdeclares

"Fermented liquors which are brewed and sold at micro-breweries or small

"New brands, as defined in the immediately following paragraph, shall initially be

"'Net retail price', as determined by the Bureau of Internal Revenue through a

"Any downward reclassification of present categories, for tax purposes, of existing

"Any brewer or importer who, in violation of this Section, knowingly misdeclares or

"(a) Tobacco twisted by hand or reduced into a condition to be consumed in any

"Any manufacturer or importer who, in violation of this Section, knowingly misdeclares

"SEC. 145. Cigars and Cigarettes. -

"(A) Cigars. - There shall be levied, assessed and collected on cigars an ad

"Effective on January 1, 2005, Two pesos (P2.00) per pack;

"Effective on January 1,2007, Two pesos and twenty-three centavos

"Effective on January 1, 2009, Two pesos and forty-seven centavos

"Effective on January 1, 2011, Two pesos and seventy-two centavos

"Duly registered or existing brands of cigarettes or new brands thereof packed by