BIR Ruling

January 23, 1969 Atty. Arcelio B. Fetizanan Room 1504 Manhattan Building 415 Nueva St., Manila S i r : This has reference to your letter dated January 13, 1969 requesting for a ruling on whether or not your client, the Clavecilla Radio System, is exempt from the payment of income tax. Rep. Act No. 402, as amended by R. A. No. 4540, under which the said franchise grantee is operating contains a provision, viz: cdi "Sec. 9. (b) The grantee shall further pay to the Treasurer of the Philippines each year after the audit and approval of the accounts as prescribed in this Act, one and one-half per centum of all gross receipts from business transacted under this franchise by the said grantee in the Philippines, in lieu of any and all taxes of any kind, nature or description levied, established or collected by any authority whatsoever, municipal, provincial or national, from which the grantee is hereby exempted, effective from the date of the approval of Republic Act Numbered Sixteen Hundred Eighteen." In reply, I have the honor to inform you that by virtue of the exemption clause in the said franchise, your client, the Clavecilla Radio System, is exempt from the payment of income tax. However, the exemption is good only up to June 30, 1968 in view of the provisions of R. A. No. 5431 which amended, among other, Sec. 24 of the Tax Code subjecting every corporation, not specifically exempted therein and under Section 27 of said Code, to the payment of the income tax therein prescribed, the provisions of existing general and special laws to the contrary notwithstanding. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue