BIR Ruling

January 4, 1972 The Revenue District Officer Revenue District No. 92 Kidapawan, Cotabato S i r : This refers to your letter dated March 23, 1971 requesting clarification of Section 15(a) and (b) of Regulations No. 85 which consider the logs cut from unregistered private woodland as cut under ordinary license hence subject to regular forest charges and Revenue Memorandum Circular No. 34-70 dated July 6, 1970 which calls for the imposition and collection of 300% surcharge on logs cut without license or on unregistered private woodlands. There is no conflict between the provisions of Section 15(a) and (b) of Regulations No. 85 and Revenue Memorandum Circular No. 34-70. Both regulations and the circular are implementing Sections 266 and 267 of the Tax Code, as amended. The former provides for the imposition of the regular forest charges while the latter provides for the imposition of the 300% surcharge. Every owner of a private land, whether agricultural or forest land must register with the Director of Forestry his title to the land or secure a license from said official to cut, gather and remove forest products from his land; otherwise, he shall be subject to the payment of regular forest charges under Section 266 of the Tax Code, as amended, the pertinent provisions of which are quoted hereunder for ready reference: "SEC. 266. Charges collectible on forest products cut, gathered and removed from unregistered private land . The charges above prescribed shall be collected on all forest products cut, gathered and removed from any private land the title of which is not registered with the Director of Forestry as required by Forest Law: Provided , however , That in the absence of such registration, the owner who desires to cut, gather and remove timber and other forest products from such land shall secure a license from the Director of Forestry in accordance with the Forest Law and regulations. The cutting, gathering and removing of timber and other forest products from said private lands without license shall be considered as unlawful cutting, gathering, and removing of forest products from public forests and shall be subject to the charges prescribed in such cases in this Chapter. (As amended by Rep. Act No. 173, approved June 20, 1947.)" The 300% surcharge is imposed by Section 267 of the Tax Code, the pertinent part of which reads thus "Where forest products are unlawfully cut or gathered in any public forest without license or, if under license, in violation of the terms thereof, the charges on such products shall be increased by three hundred per centum . . ." The said 300% surcharge is a penalty imposed on illegal cutting, gathering and removing of timber from public forest. Sound public policy demands that timber from either public or private land should be conserved or wisely exploited in order that the patrimony of the nation may not be impaired. (Col. of Internal Revenue vs. Baretto Sons, Inc., G.R. No. L-11805, May 31, 1970). Please be guided accordingly. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue