BIR Ruling

September 6, 1968 2nd Indorsement Respectfully returned to the Honorable, the Undersecretary of Finance, thru the Director, Bureau of Mines, Manila, the letter-inquiry of Messrs. Sycip, Gorres, Velayo & Co., dated March 18, 1968 requesting comment on query No. 1 contained in said letter as to whether or not a mining company which qualified and availed of the tax exemption benefits (except income tax) under Republic Act No. 3823 could similarly enjoy the exemption from income tax under the provisions of Republic Act No. 909. For ready reference and convenience, query No. 1 referred to above is reproduced, viz.: "1. One of our clients, a mining company, has qualified and availed of the tax exemption benefits accorded by Republic Act No. 3823 (inserting Section 79-A to Commonwealth Act No. 137, otherwise known as the mining Act), which grants five years complete tax exemption, except income tax, from the time of the company's actual bona fide orders for equipment for commercial production. Thus, said Section 79-A provides that: "SEC. 79-A. However, new mines, and old mines which resume operation, when certified to as such by the Secretary of Agriculture and Natural Resources upon the recommendation of the Director of Mines, shall be granted five years complete tax exemption, except income tax, from the time of its actual bona fide orders for equipment for commercial production. "If any of the tax-exempt articles acquired under this provision are sold, transferred or otherwise disposed of within a period of five years from such tax-exempt acquisition, all taxes and duties which would have been due at the time of such acquisition shall become due and payable, together with all interests and surcharges, and which amount shall constitute a lien on these properties." "Since the tax exemption privileges authorized by Republic Act No. 3823 do not include exemption from income tax, the same mining company desires to take advantage of the exemption from income tax granted by Republic Act No. 909 to mining companies. Section 3 and 5 of Republic Act No. 909 read as follows: "SEC. 4 New mines, and old mines which resume operation, when certified to as such by the Secretary of Agriculture and Natural Resources upon the recommendation of the Director of Mines, shall be exempt from the payment of income tax during the first three years of actual commercial production: Provided, That, any such mine and/or mines making a complete return of its capital investment at any time within the said period, shall pay income tax from that year. "SEC. 5. Notwithstanding the provisions of section one hundred and ninety of the Internal Revenue Code and section one of Republic Act Numbered Six hundred and one, known as the Foreign Exchange Tax, all articles imported by gold mining companies which will be used in the operation of the said mining companies are exempt from tax: Provided , That these exemptions shall apply during a period of three years." "We would, therefore, appreciate your confirming our view that the aforementioned mining company, upon proper application, could legally enjoy the exemption from income tax under the provision of Republic Act No. 909 simultaneously with its enjoyment of the privilege of exemption from other taxes granted by Republic Act No. 3823." Whether or not the mining company referred to in the query of Messrs. Sycip, Gorres, Velayo & Co. can legally enjoy the exemption from income tax under the provisions of Republic Act No. 909 simultaneously with its enjoyment of the tax exemption benefit under Republic Act No. 3823, depends on whether Congress, in enacting Republic Act No. 3823 intended said Act to supplement or supersede Republic Act No. 909. The question of whether a pre-existing law, either in its entirety or in part, has been repealed by the enactment of a new and independent legislation depends upon the intent of the legislature, and such intent may be ascertained from the terms and provisions of the latter enactment. Whenever the legislature enacts laws, it does so with a complete knowledge of all existing laws pertaining to the same subject, such that the failure to add a repealing clause indicates that the intent was not to repeal any existing legislation. (Crawford, Statutory Construction, p. 631) Consequently, when Congress, in enacting Republic Act No. 3823 relating to the same subject matter as that of Republic Act No. 909, expressly declared that "All laws and regulations, or part thereof, which are inconsistent with the provisions of this Act are hereby amended or repealed" (Section 2, R.A. No. 3823), it thereby clearly evinced an unmistakeable intention to make the new statute, Republic Act No. 3823, a substitute for Republic Act No. 909. In other words, Republic Act No. 3823 superseded Republic Act No. 909, The provisions of Republic Act No. 3823 must, therefore, prevail over those of Republic Act No. 909, because the former is the last expression of the will of the legislature. In view of the foregoing, this Office is of the opinion that the mining company referred to in the aforesaid query of Messrs. Sycip, Gorres, Velayo & Co. can enjoy only the five-year exemption from all taxes, except income tax, from the time of its actual bona fide orders for equipment for commercial production under Section 1, Republic Act No. 3823. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue