BIR Ruling

June 10, 1968 Mr. Jacinto G. Bernardo Chief Corporate Accountant National Irrigation Administration Quezon City S i r : This refers to your letter dated April 16, 1968, seeking opinion on the propriety or legality of the request of the Revenue Collection Agent at Iriga, Camarines Sur, that the 3% contractor's tax which is being paid in Manila by Monark International, Inc. of Mandaluyong, Rizal, should be paid in Iriga inasmuch as the irrigation project is being undertaken in that municipality. The request is premised on the belief that payment of the contractor's tax thereat will inure to the benefit of the municipality. In reply, I have the honor to inform you that under Section 362 of the Tax Code, national internal revenue collected, (such as the contractor's tax) shall accrue to the National Treasury and shall be available for the general purpose of the Government. Thus, the payment of the contractor's tax to a certain municipality will not give said municipality any special benefit from the collection thereof. You may, therefore, continue deducting and withholding the 3% tax from Monark International, Inc. and remit the same, as you are now doing, to this Office pursuant to Revenue Regulations No. V-40 implementing Republic Act No. 1051. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue