BIR Ruling

November 9, 1977 Eastern Telecommunications Phil. Inc. Electra House, 115-117 Esteban St. Legaspi Vil., Makati, Rizal Attention: Mr . Manuel H . Nieto, Jr . President Gentlemen : This refers to your letter dated September 14, 1977 stating that Eastern Telecommunications Philippines, Inc. is the nominated entity of the Philippine Government to coordinate, with the proper government entities of other ASEAN member countries in the implementation of the projected new Southeast Asian Cable System in accordance with the objectives and programs of the Bali Declaration of ASEAN Concord. It is also represented that presently a high capacity submarine telephone cable is now under construction between the Philippines and Singapore, as the first segment of the South East Asia submarine cable network. You also stated that in view of the high cost of the project and its importance to ASEAN, the President upon recommendation of the NEDA, has approved your request for exemption from duty on imported equipment to be used in connection with the Philippine Singapore cable system. You now request that this Office also consider exemption of said equipment from the payment of the corresponding compensating tax. In reply, I have the honor to inform you that pursuant to Section 204(5) [formerly Section 190(5)] of the Tax Code of 1977, exemption from compensating tax may be granted by the President upon recommendation of the NEDA in the interest of economic development. Inasmuch as the President has not approved your request for exemption from the compensating tax, this Office cannot grant your request for lack of legal basis Very truly yours, CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN-D2567-D1025-A-2