BIR Ruling [DA-142-99]

March 9, 1999 BIR RULING [DA-142-99] Atty. Bong C. Suntay City Councilor, 4th District Quezon City S i r : This refers to your letter dated November 25, 1998 requesting for a legal opinion relative to the exemption granted to the Maynilad and Manila Water Services from local business taxes. It is represented that the Blue Ribbon Committee of the City Council of Quezon City conducted an investigation on November 5, 1998 regarding the exemption granted to the Maynilad and Manila Water Services from local business taxes; that it was found out that the Board of Investments (BOI) classified the aforesaid contractors as a "pioneer enterprise"; that the said entities now claim exemption on business taxes pursuant to Section 133 of Republic Act No. 7160, otherwise known as the Local Government Code of 1990; that it is the position of your office that there is an arbitrary issue of the pioneer status to the said entities based on Article 17 and Article 28, paragraph 4 of Executive Order No. 226, The Omnibus Investments Code of 1987; and that it is also your opinion that the two concessionaires do not fall under this definition and the BOI cannot expand the classification to accommodate the said grantees. In reply, please be informed that the determination of whether an enterprise belongs to a pioneer or a non-pioneer status rests within the sound jurisdiction of the Board of Investments. Hence, it is suggested that your request be referred to the said Office which has jurisdiction on the matter. cdta Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal and Enforcement Group