BIR Ruling No. 031-80

October 23, 1980 BIR RULING NO. 031-80 267-b 000-00 31-80 Matic Law Office Suite 304, Doa Victoriana Bldg. New York St., corner EDSA Cubao, Quezon City Attention : Atty . Tomas P . Matic, Jr . Gentlemen: This refers to your letter dated April 21, 1980 requesting that your client, Tarlac Enterprises, Inc. be exempted from the payment of the annual fixed tax of P2,000.00 payable by franchise grantees in accordance with Section 192(3)(gg) of the Tax Code of 1977, as amended. You have represented that your client is a grantee of a franchise to operate and has been operating an electric light and power plant. In reply, I have the honor to inform you that as an electric franchise holder, your client is subject to 2% franchise tax which shall "be in lieu of all taxes and assessments of whatever nature imposed by any national or local authority on earning, receipt, income and privilege of generation, distribution and sale of electric current and of manufactured city gas." (Sec. 267(b), Ibid ) Pursuant to the afore-quoted provision of Section 267(b) of the Tax Code, the 2% franchise tax paid by an electric franchise holder, such as your client is in lieu of the privilege (fixed) tax imposable on its privilege of engaging in business, i.e., generation, distribution and sale of electric current. Such being the case, your client, Tarlac Enterprises, Inc. is not subject to the privilege (fixed) tax which is an excise tax on the privilege of engaging in business, imposed by Section 192(3)(gg) of the same Code. aisadc Very truly yours, ROMULO M. VILLA Acting Commissioner