BIR Ruling

February 28, 1969 The Executive Director Joint Legislative-Executive Tax Commission Phoenix Bldg., Intramuros Manila S i r : This refers to your letter dated February 20, 1969 requesting our comment on the proposition involving the re-examination of the articles which should properly be subjected to the specific tax. This Office believes that matches and coal and coke may appropriately be removed from the purview of the specific tax law. As regards matches, this Office feels that they are of the character more or less of an ordinary manufactured product and, therefore, may be more appropriately covered by the sales tax law. As regards coal and coke, rentals and royalties are being collected already from concessionaires of coal-bearing public lands, but these rentals and royalties are credited against the specific tax provided for by Section 143 of the Tax Code. As it presently appears, therefore, the balance of the specific tax payable becomes nil and, for this reason, the tax may just as well be scrapped and the amounts of the rentals and royalties adjusted to cover up the reduction. Besides, coal and coke are mineral products in almost their original form and should, therefore, be properly covered by the mining tax law. However, in order not to minimize or reduce the amount of tax presently being collectible which would consist of the difference between the specific tax provided for by Section 143 and the sum of the rentals and royalties paid, this Office suggest that the two provisos contained in sub-section (a)(1) of Section 242 be deleted and thereby subjecting concessionaires of coal-bearing public lands to both rentals and royalties not only in the character of a provisional but final levy. All other articles presently covered by the specific tax law are believed properly placed. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue