BIR Ruling

March 11, 1973 Atty. Raquel Ramirez-Habitan 14-A Kalamansanay Street Project 7, Quezon City M a d a m : This refers to your letter dated February 6, 1973 requesting clarification on the following matters. cdt "1. Is a corporation that may engage in agriculture (pay, production of bananas) liable for the payment of privilege tax? "2. If it is subject to the privilege tax, is it subject to the graduated fixed tax or the percentage tax? If so, what is the basis for the tax and the rates applicable? Would the tax be the same if the agricultural products were for exports? for local consumption? "3. If it falls under the percentage tax section, can it avail of the provisions of Section 183 of the National Internal Revenue Code, which provides as follows? Transactions and persons not subject to percentage tax: In computing the tax imposed in Sections 134; 186-A and 186-B, transactions in the following commodities shall be excluded. . . . 2. Agricultural food products, etc. xxx xxx xxx." In reply, I have the honor to inform you that a corporation which is engaged in producing agricultural products, such as bananas for local consumption and export is exempt from the payment of the percentage taxes pursuant to Section 189(b) of the Tax Code. Accordingly, it is exempt from the payment of the fixed tax or the graduated fixed tax. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue