BIR Ruling No. 017-65

April 19, 1965 BIR RULING NO. 017-65 Atty. Amadeo D. Seno Suites 209-210 Filomelia Building Cebu City S i r : Reference is made to your letter dated November 2, 1964, stating as follows: cdll "The Pan Oriental Match Company, a manufacturer of matches, packs its manufactured matches in boxes containing sixty (60) sticks to a box. On its manufactured matches, it has been required to pay specific tax of fifty centavos (P0.50) for each gross of boxes pursuant to Section 138 of the National Internal Revenue Code which provides "Specific tax on matches On matches there shall be collected: "(a) On each gross of boxes containing not more than eighty sticks to the box, fifty centavos; "(b) On each gross of boxes containing over eighty sticks to the box, a proportionate additional tax (As amended by Section 8, Republic Act No. 56). "In view of the above-mentioned provision of the Tax Code which provides for a proportionate additional tax in case the boxes contain more than eighty sticks each and considering that the matches manufactured by the Pan Oriental Match Company are packed in boxes of only sixty sticks to a box, may the Company not be entitled to a corresponding decrease in its payment of the specific tax thereon? We have learned from reliable sources that some manufacturers of matches are paying proportionately reduced specific taxes on match booklets containing 20 to 40 sticks." In reply thereto, I have the honor to inform you as follows: The specific tax on matches is based on gross of boxes. The box is the adopted standard container and 80 is the maximum number of sticks allowed to be contained therein to serve a basis for the basic tax of P0.50 per gross of boxes. The maximum of 80 provides the standard basic quantitative contents of a box, and the amount of P0.50 provides the basic tax per gross of boxes of contents of not more than 80 sticks. Hence, a box may contain less than 80 but the tax remains the same. Because the box is the standard basic container, necessarily in computing the tax on booklets of match sticks, the latter must have to be converted to its equivalent in boxes on the basic quantity of 80 sticks to the box. This act of conversion does not have the effect of reduction of the tax on booklets of matches. It constitutes purely a means of arriving at the basis for the computation of the tax. Your question is therefore answered in the negative. prcd Very truly yours, (SGD.) BENJAMIN N. TABIOS Acting Commissioner of Internal Revenue