BIR Ruling

September 22, 1972 The Auditor General General Auditing Office Quezon City Attention: Ma . Athena C . Flores Manager Program Audit Department S i r : This refers to your letter dated August 17, 1972 requesting information as to whether or not contractors engaged in the hauling of cement from factory to project sites on a piece rate basis is subject to the payment of percentage tax. In reply, I have the honor to inform you that a person who enters into a contract with the government undertaking the hauling of cement from factory to project sites on a piece rate basis is a transportation contractor under Section 192 of the Tax Code. Consequently, he is subject to the fixed annual tax of P50.00 and to the 2% tax on his gross receipts prescribed in Sections 182 (A)(1) and 192, respectively of the Tax Code. Moreover, the 2% tax being determinable at the time of payment, the 2% tax due from said contractor should be withheld and remitted to this Office, pursuant to Republic Act No. 1051, as implemented by Revenue Regulations No. 21-67. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue