BIR Ruling

January 13, 1970 The Manager Bank of the Philippine Islands Cagayan de Oro City S i r : This refers to your letter dated October 6, 1969 to the Revenue Director, BIR Revenue Region No. 17, Cagayan de Oro City, protesting the payment of 5% bank tax in the amount of P3,791.24 for the 3rd quarter of 1969, which was forwarded to this Office for action. It appears that Section 58 of House Bill No. 17839 which has become Republic Act No. 6110 otherwise known as the Omnibus Tax Law, amended Section 249 of the Tax Code by reducing from 5% to 3% the tax on gross receipts of banks. In reply, I have the honor to inform you that His Excellency, the President of the Republic of the Philippines, pursuant to the provisions of Section 20(3), Art. VI of the Constitution, has vetoed Section 58 of R. A. 6110, insofar as it seeks to reduce the percentage tax to 3%, for the reason that the banking business had been thriving profitably even under the existing rate of 5%. The reduction would unnecessarily only bring about substantial loss in revenue. In view of the foregoing, your above payment of the bank tax is in accordance with law. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue