BIR Ruling [DA-467-03]

December 5, 2003 BIR RULING [DA-467-03] 236 (B); RMC No. 4-98 073-2000 Borongan Tricycle Drivers and Operators Association Tabok, Borongan, Eastern Samar Attention: Mr . Alden C. Ambida President Gentlemen : This refers to your letter dated March 13, 2003, requesting for a ruling that tricycle operators be exempted from payment of Value-Added Tax (VAT) and Percentage Tax. It is represented that Borongan Tricycle Drivers and Operators Association (BTDOA) is a legitimate organization of tricycle drivers and operators of the province duly registered with the Department of Labor and Employment (DOLE) with Registration No. VIII-762 dated November 9, 2002. In reply, please be informed that pursuant to Revenue Memorandum Circular No. 4-98 supplementing Revenue Regulations No. 7-95, the term "in the course of business" was further qualified in the light of the declared policy of the government to provide, as much as possible, an equitable relief to a greater number of taxpayers in order to improve levels of disposable income and increase economic activity. Hence, this Office held that "any business or businesses pursued by an individual where the aggregate gross sales or receipts do not exceed P100,000.00 during any 12-month period shall be considered principally for subsistence or livelihood and not in the course of business." Accordingly, the owners/operators/drivers of motorized tricycle for hire in Borongan, Eastern Samar are among those individual taxpayers qualified under the aforesaid definition, although still required to register, they shall nevertheless be exempted from the payment of registration fee as prescribed under Section 236(B) of the Tax Code of 1997, and from the payment of Value-Added Tax ( VAT ) under Title IV, Chapter I and Percentage Taxes under Title V, both of the same Code, in accordance with Revenue Memorandum Circular No. 4-98 dated January 21, 1998. (BIR Ruling No. 073-2000 dated December 22, 2000) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. SEDIaH Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group