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    BLGF Opinion Dated March 6, 1996

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    Vince Roem Nonol

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    © All Rights Reserved
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    BLGF Opinion Dated March 6, 1996

    Uploaded by

    Vince Roem Nonol
    4 views2 pages

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    4 views2 pages

    BLGF Opinion Dated March 6, 1996

    Uploaded by

    Vince Roem Nonol

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    March 6, 1996

    BUREAU OF LOCAL GOVERNMENT FINANCE OPINION

    2nd Indorsement

    Respectfully returned to the Regional Director for Local Government Finance,


    Region VII, 3rd Floor MSK Building, Juan Luna corner Lapu-Lapu Street, Cebu City.

    This refers to the letter dated January 29, 1996 of the Municipal Treasurer,
    Minglanilla, Cebu regarding the request of Marcia-Hikosen Garments Co., Inc.
    (MGCI) for the correct interpretation of Section 143 (c) of the Local Government
    Code of 1991 (LGC).

    Representations are made that MGCI, an exporter of garments, has its factory
    located in Tungkop, Minglanilla.

    On January 16, 1996, MGCI applied for Mayor's permit and paid its business
    taxes to the said municipality. MGCI claimed that being an exporter, it is subject to
    the tax rates provided under Sec. 143 (c) of the LGC which is 1/2 of the rates
    prescribed under Sec. 143 (a) of the same Code.

    However, the Municipal Treasurer of Minglanilla, imposed the full rates in


    subsection (a) on the ground that MGCI is not exporting essential commodities.

    Article 232 (c) of the Implementing Rules and Regulations (IRR)


    implementing Sec. 143 (c) of the LGC provides as follows:

    "ART. 232. Tax on Business. — The municipality may impose taxes on


    the following businesses:

    "xxx xxx xxx

    "(c) On exporters, and on manufactures, millers, producers,


    wholesalers, distributors dealers, or retailers of essential commodities
    enumerated hereunder at a rate not exceeding one-half (1/2) of the rates
    prescribed under subsections (a), (b) and (d) of this Article"

    "(1) Rice and corn;

    "(2) Wheat or cassava flour, meat, dairy products, locally


    manufactured, processed or preserved food, sugar, salt and other agricultural,
    marine, and fresh water products whether in their original state or not;

    "(3) Cooking oil and cooking gas;"

    "(4) Laundry soap, detergents, and medicine:

    "(5) Agricultural implements, equipment and post-harvest facilities,


    fertilizers, pesticides, insecticides, herbacides, and other farm inputs:

    "(6) Poultry feeds and other animals feeds;

    "(7) School supplies; and

    Copyright 1994-2021 CD Technologies Asia, Inc. Local Autonomy and Local Government 2021 First Release 1
    "(8) Cement.

    "For purposes of this provision, the term exporters shall refer to those
    who are principally engaged in the business of exporting goods and
    merchandise, as well as manufacturers and producers whose goods or products
    are both sold domestically and abroad. The amount of export sales shall be
    excluded from the total sales and shall be subject to the rates not exceeding one
    half (1/2) of the rates prescribed under pars. (a), (b) and (d) of this Article."

    On the basis of the foregoing, this Bureau expresses the view that exporters of
    garments and/or other non-essential commodities are liable to pay the business tax
    only at the rate of not exceeding one-half (1/2) of the rates prescribed under
    subsections (a), (b) and (d) of the aforequoted Article 232. This is so for reason that
    the qualifying phrase "essential commodities" should be construed to apply only
    business other than exporting considering that the term "exporter" is dissociated by
    the "comma" and the conjunction "and" following it.

    It is only when "exporters" sell non-essential goods domestically that shall be


    subject to the full rate imposed in the ordinance pursuant to paragraphs (a), (b) and (d)
    of Art. 232 aforecited. Hence, the export sales and domestic sales of such exporters
    should be declared separately. For clarification, enclosed is a copy of Local Finance
    Circular No. 4-93 dated July 30, 1993, prescribing the guidelines on the imposition by
    LGU of the business tax on exporters pursuant to Sec. 143 (c) of the LGC. LLjur

    Be guided accordingly.

    LORINDA M. CARLOS
    Executive Director

    Copyright 1994-2021 CD Technologies Asia, Inc. Local Autonomy and Local Government 2021 First Release 2

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