Request for Grant of Amnesty to the Operators of Motorcabs from Paying the Common Carrier's Tax

January 3, 1991 BIR RULING NO. 002-91 115 047-63 073-90 002-91 Gentlemen : This refers to the Petition dated September 27, 1990 jointly signed by you and the various operators of motorcabs in Dipolog City addressed to Her Excellency, President Corazon C. Aquino, requesting her to grant amnesty to the operators from paying the common carrier's tax because of their hard living condition and to restrain this Office from collecting penalty incident to late payment imposed on said motorcab operators. In your said Petition, you stated that Memorandum Order No. 302 dated June 18, 1990 of the President which directed the Land Transportation Office not to issue or renew certificates of registration of any motor vehicles unless there is proof of payment of the common carriers tax and which would take effect fifteen days from the publication of the rules and regulations promulgated pursuant to Section 2 thereof, was never published in accordance with law. You also alleged that motorcabs (motorcycle with sidecars) are not among the vehicles enumerated under Section 115 of the Tax Code hence the local BIR is not sure under what tax category motorcabs belong. In reply, I regret to inform you that your request cannot be granted for lack of legal basis. Under Section 115 of the Tax Code, a 3% common carriers tax is imposed upon keepers of garages, cars for rent or hire driven by the lessee, transportation contractors, persons who transport passenger or freight for hire and common carriers by land, air or water except owners of bancas and owners of animal-drawn two wheeled vehicles. This Office had ruled that proprietors or operators of motor tricycles are considered transportation contractors subject to the 2% (now 3%) common carriers tax. (BIR Ruling No. 047-63; Unnumbered rulings dated October 24, 1972 and June 19, 1973) Hence, even without said Memorandum Order No. 302 or its implementing regulations, operators, of motorcabs (motor tricycles as they are commonly known) are bound to pay the said 3% common carriers tax imposed by Section 115 of the Tax Code. And since admittedly none of the motorcab operators in Dipolog City have been paying the 3% common carriers tax, then all of them are liable to pay a surcharge equivalent to 25% of the amount due, pursuant to Section 248 (a) (3) also of the Tax Code. It has been held that payment of surcharge for non-payment of tax on time under Section 248 of the Tax Code is mandatory and automatically due once the tax is not paid within the prescribed period. (Republic vs. Lian Tian Teng Sons & Co., L-21731 dated March 31, 1966) It is noted however, that Section 115 of the Tax Code sets a minimum quarterly gross receipts for autocalesa, jeepney for hire, public utility bus and car for hire but none for motorcab. Since the law does not provide the amount which shall be considered the minimum quarterly gross receipts of motorcabs, the tax base of the 3% common carrier's tax shall be the actual quarterly gross receipts of the operator/proprietor thereof. Hence, the record of each operator should reflect the daily gross receipts of each motorcab which shall include the amounts representing the so-called boundary, the earnings of the drivers, expenses for gasoline and other expenses taken from the total earnings derived in the operation of the motorcab. Very truly yours, (SGD.) VICTOR A. DEOFERIO, JR. Deputy Commissioner (Officer-in-Charge)