Rural Banks: Liability to the Fixed Tax

1970 BIR RULING NO. 022-70 Rural Banks : Liability to the Fixed Tax . Rural banks with net assets not exceeding one million pesos (P1,000,000.00), excluding the counterpart capital subscribed and paid in by the Government are exempt from the payment of the fixed tax imposed in Section 182(A)(3)(gg) of the Tax Code, as amended by Republic Act No. 6110. Section 14 of Republic Act No. 720, as amended by Republic Act No. 5939 provides as follows: "SEC. 14. All rural banks created and organized under the provisions of this Act with not assets net exceeding one million pesos excluding the counterpart capital subscribed and paid in by the Government under Sections seven and eight of this Act, shall be exempt from the payment of all taxes, charges and fees of whatever nature and description: Provided , however , That when the net assets of a rural bank exceed three million pesos, the taxes charges and fees shall be levied in the proportion that such excess bears to the said net assets: Provided, finally, That when the net assets of a rural bank exceed three million pesos, it shall pay all taxes, fees and charges like any other bank." It may be stated in this connection that Republic Act No. 5939, amending certain sections of Republic Act No. 720, otherwise known as the Rural Bank Act took effect on June 12, 1969. The Omnibus Tax Law (R.A. No. 6110), notwithstanding its effectivity on September 1, 1969 which is of a later date, has not in any manner affected the exemption from the payment of the fixed tax in question granted to rural banks under Republic Act No. 5939, since there is nothing in the Omnibus Tax Law which expressly or implicitly repealed said exemption.