BIR Ruling

May 21, 1969 Mrs. Marcela Lim-Tam Republic Street Zamboanga City M a d a m : This refers to your letter dated May 16, 1969 requesting information as to whether or not your father, as owner of the Lau Shun Pawn Shop is subject to fixed and percentage taxes. It is represented that the Lam Shun Pawnshop advances money to the public and receives pledges in the form of jewelry to secure the said amount; that loans that are not paid after one year from due date are foreclosed and the pledges are sold to the public to recover the amount loaned and interest unpaid; that the Lam Shun Pawn Shop does not buy or sell jewelry but merely sells the unredeemed pledges; that some slightly defective and soiled jewelry are repaired and cleaned to make them presentable for sale; that the repairs are minor in nature and incidental to the pawn shop business; that the original appearance of the jewelry is not changed; and that no alteration is made on the original jewelry foreclosed. In reply, I have the honor to inform you that under the foregoing circumstances, your father as owner of the Lam Shun Pawn Shop is not subject to any fixed or percentage tax imposed under the Tax Code. However, the income derived from his business is subject to the income and additional residence taxes. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue