BIR Ruling

July 16, 1969 The Honorable The Secretary of Agriculture and Natural Resources Diliman, Quezon City (Thru the Honorable, the Secretary of Finance, Manila) S i r : This refers to your 1st Indorsement dated October 8, 1968 relative to the "Authority to Cut Timber from Titled Land" issued by our Davao City Regional Office in favor of Messrs. Ambi Danao and Ricardo M. Velasquez. In this connection, I have the honor to inform you that the communications in question were mere advisements to the addressees thereof of their non-liability to the 300% surcharge or 'waiver' for the collection thereof if they cut timber for purposes of Section 15(b) of the Forest Products Regulations and not as authority or permit to cut timber. Further in this connection, please be informed that our regional directors had already been advised to desist from issuing such advance waivers for the 300% surcharge cannot be waived if in fact the owners of unregistered private woodlands illegally cut timber therefrom. As regards the imposition and collection of the 300% for illegal cutting, this Office takes exception to the statement in the indorsement, viz: "Furthermore, Section 17(a) FAO No. 12-1 vests in the said Director of Forestry the right to impose the 300% surcharge for illegal cutting and removal of forest products. Therefore, to all intents and purposes, there being no provisions of law to the contrary, the power to condone the 300% surcharge must perforce be vested with the Director of Forestry." The duty of measuring forest products and collection of forest charges thereon is reposed by law on the Commissioner of Internal Revenue. Thus Section 262 of the Tax Code provides, viz: "Sec. 262. Measuring of forest products and collection of charges thereon . The duties incident to the measuring of forest products and the collection of the charges thereon shall be discharged by the Bureau of Internal Revenue, under the regulations of the Department of Finance. "Employees of the Bureau of Forestry may be deputized by the Commissioner of Internal Revenue for the performance of duties incident to the measuring and invoicing of forest products when the Director of Forestry deems such course advisable for the protection of the forest revenues and is willing to supply the services of such employees at the expense of the Bureau of Forestry." The imposition of the 300% surcharge is provided for by Section 267 of the Tax Code, quoted as follows: "Sec. 267. Surcharges for illegal cutting and removal of forest products or for delinquency . Where forest products are unlawfully cut or gathered in any public forest without license or, if under license, in violation of the terms thereof, the charges on such products shall be increased by three hundred per centum. If forest products shall be removed without invoice, or upon removal, shall be discharged without permit from boat, car, cart, or other means of transportation, the charges shall increase by twenty-five per centum, and if, in any case, the proper charges shall be increased by twenty-five per centum: Provided, however, That the Commissioner of Internal Revenue may, in meritorious cases, waive the surcharge of twenty-five per centum for discharging without permit or grant an extension of time not exceeding thirty days for the payment of the forest charges without surcharge. (As amended by Republic Act No. 434.)" It will be seen from the provisions of law cited above that the duty to assess and collect forest charges and penalties incident thereto is exclusively reposed in the Commissioner of Internal Revenue. Under the provisions of Section 267 of the Tax code, even the Commissioner of Internal Revenue cannot waive the 300% surcharge. With more reason, therefore, that the Director of Forestry cannot do so. In the light of all the foregoing, it is respectfully requested that forestry personnel be duly advised of their rightful duties relative to the assessment and collection of forest charges, including surcharges and penalties incident thereto which duty is exclusively reposed by law with the Commissioner of Internal Revenue. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue