BIR Ruling

February 8, 1973 Mr. Gregorio P. Laurente 39 Rizal Street Surigao City S i r : This refers to your letter dated October 16, 1972 stating that you plan to open a business selling motorcycles and general merchandise all in one and the same establishment; and that you also plan to utilize one or more motorcycles for hire by attaching thereto a sidecar that can carry three (3) passengers thus resulting into a tricycle (motor-tricycle) for hire. You now request for information on the following: 1. The kinds of privilege taxes you will pay. acd 2. Whether you are required to pay percentage tax and if so, what portion or item is subject to percentage tax. 3. If you are required to pay privilege and percentage taxes on the above business, whether the income derived therefrom is still subject to income tax. In reply thereto, I have the honor to inform you that for selling motorcycles and general merchandise which are all procured locally, you will be liable to the graduated annual fixed tax prescribed in Section 182(A)(2) of the Tax Code, as amended. The initial payment of the said fixed tax is P10.00. For operating motor-tricycles for hire, you will be considered a transportation contractor subject to the fixed annual tax of P50.00 and to the 2% tax on your monthly gross receipts pursuant to Sections 182(A)(1) and 192, Respectively, both of the Tax Code; as amended. (BIR Ruling No. 63-047). The income from the above-described business is subject to income tax. Hence, the income derived therefrom should be reported in your income tax return. cdi Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue