BIR Ruling

May 15, 1973 Tayabas Light & Power Co., Inc. Tayabas, Quezon Attention: Mr . Benjamin Jara Treasurer Gentlemen : This refers to your letter dated April 30, 1973 requesting clarification on the internal revenue taxes payable by that Company. cdtech In reply, I have the honor to inform you as follows: 1. That Company is liable only to the two percent franchise tax, pursuant to Section 8 of your franchise, Commonwealth Act No. 3649, the pertinent portion of which provides as follows: "SEC. 8. The grantee shall pay on its real estate, buildings, plant, machinery, and other personal property the same taxes as are now or may hereafter be required by law from other persons, with the exception of the property expressly declared exempt in this section. In consideration of the franchise hereby granted, the grantee shall pay into the municipal treasury of Tayabas where it is furnishing electricity to the public under this franchise, a tax equivalent to two per centum of its gross earnings from its sales of electric current under this franchise . Said percentage shall be due and payable quarterly and shall be in lieu of taxes and assessments of any nature now or hereafter required, established, or collected by any authority on its poles, wires, insulators, switches, transformers, and other structures, installations, and equipment and accessories on and across the streets, avenues, roads, thoroughfares, bridges, and other public place, and on its franchise, rights, privileges, receipts, income, and profits, from which taxes and assessments the grantee is hereby expressly declared exempt." 2. That Company is subject to the annual fixed tax of P500.00, pursuant to Section 182(A)(3)(gg) of the Tax Code, as amended by R.A. No. 6110 otherwise known as the Omnibus Tax Law which took effect on September 1, 1969. 3. That Company is subject to income tax beginning July 1, 1968, under Section 24(d) of the Tax Code as inserted by R.A. No. 5431, as implemented by Revenue Memorandum Order No. 15-72 dated May 17, 1972. aisadc Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue