Section 16Sec./Art. 16

Section 121 of the same Code, as amended, is hereby further amended to read as follows:

"SEC. 121. Tax on Banks and Non-Bank Financial Intermediaries Performing Quasi-Banking Functions. - There shall be collected a tax on gross receipts derived from sources within the Philippines by all banks and non-bank financial intermediaries in accordance with the following schedule:

"(a) On interest, commissions and discounts from lending activities as well as income from financial leasing, on the basis of remaining maturities of instruments from which such receipts are derived:

Maturity period is five years or less

5%

Maturity period is more than five years

1%

"(b) On dividends and equity shares and net income of subsidiaries 0%

"(c) On royalties, rentals of property, real or personal, profits, from exchange and all other items treated as gross income under Section 32 of this Code 7%

"(d) On net trading gains within the taxable year on foreign currency, debt securities, derivatives, and other similar financial instruments 7%

"Provided, however, That in case the maturity period referred to in paragraph (a) is shortened thru pre-termination, then the maturity period shall be reckoned to end as of the date of pre-termination for purposes of classifying the transaction and the correct rate of tax shall be applied accordingly.

"Provided, finally, That the generally accepted accounting principles as may be prescribed by the Bangko Sentral ng Pilipinas for the bank or non-bank financial intermediary performing quasi-banking functions shall likewise be the basis for the calculation of gross receipts.

"Nothing in this Code shall preclude the Commissioner from imposing the same tax herein provided on persons performing similar banking activities."