Section 26Sec./Art. 26

Section 308 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:

"Section 308. Penalties for Noncompliance with Filing and Reportorial Requirements. - Any RBE or other registered enterprise, which fails to comply with filing and reportorial requirements with the appropriate Investment Promotion Agencies or other government agencies administering tax incentives and/or, which fails to show proof of filing of tax returns using the electronic system of filing and payment of taxes of the BIR under Section 305 hereof, shall be imposed the following penalties by the appropriate Investment Promotion Agency or other government agency administering tax incentives:

(A) First (1st) Violation - Payment of a fine amounting to One hundred thousand pesos (P100,000);

(B) Second (2nd) Violation - Payment of a fine amounting to Five hundred thousand pesos (P500,000); and

(C) Third (3rd) Violation - Cancellation by the Investment Promotion Agency of the registration of the RBE.

Provided, That if the failure to show such proof is not due to the fault of the RBEs or other registered enterprises, the same shall not be a ground for the suspension of the ITH and/or other tax incentives availment: Provided, further, That collections from the penalties shall accrue to the general fund.

After due process, the concerned Investment Promotion Agency may cancel the registration, suspend the enjoyment of incentive benefits of any registered enterprise, and/or require refund or incentives enjoyed by such enterprise, including interests and monetary penalties, for any willful and material misrepresentation of information or submission of falsified or misleading information or documents for the purpose of availing of more incentives than what it is entitled to under this Code: Provided, further, That in case of cancellation of the certificate of registration, the project or activity of the RBE shall cease to be registered and the RBE shall be required to pay all appropriate taxes and duties from the date of cancellation order becomes final and executory.

Provided, That the Investment Promotion Agency, with the recommendation of the Commissioner, may revoke or suspend incentives granted by the Investment Promotion Agency, and/or order business closure of the RBE that violates Title VI (Excise Taxes on Certain Goods) and Title X (Statutory Offenses and Penalties) of this Code and other related revenue regulations, orders, or issuances of the government: Provided, further, That such authority shall cover the acts of RBE committed even in the first year of availment of incentives. Notwithstanding the provisions of this section, the DOF, the BIR, and the BOC shall retain their respective mandates, powers and functions as provided for under this Act and related laws.

Any government official or employee who fails without justifiable reason to provide or furnish the required tax incentives report or other data or information as required under Section 306 and 307 of this Act shall penalized, after due process, by a fine equivalent to the official's or employee's basic salary for a period of one (1) month to six (6) months or by suspension from government service for not more than one (1) year, or both, in addition to any criminal and administrative penalties imposable under existing laws."