Payment of Units of Government of Income Taxes, Customs Duties and Other Taxes and Fees

February 24, 1988 BIR RULING NO. 056-88 24 (e) (2) 000-00 056-88 S i r : This refers to your letter dated February 8, 1988 requesting a certification and/or clearance to the effect that the Presidential Commission on Good Government (PCGG) is exempt from the capital gains tax in order that the shares of stock of Oriental Petroleum and Mineral Corporation which were sold by it to Ultrana Mineral Corporation can be transferred and registered in the name of the latter. In reply thereto, I have the honor to inform you that pursuant to P.D. No. 1177 dated July 30, 1977 all units of government including government-owned or controlled corporations shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws. Moreover, P.D. 1931 issued on June 11, 1984 withdrew all exemptions from the payment of duties, taxes, fees, imposts and other charges granted in favor of government-owned or controlled corporations including their subsidiaries. Finally, Executive Order No. 93 effective March 10, 1987 withdrew all tax and duty incentives granted to government and private entities. Such being the case, PCGG is subject to the capital gains tax under Section 24(e)(2) of the Tax Code, as amended. However, since as represented the selling price of the aforementioned shares of stock is the same as its acquisition cost, then PCGG did not derive any taxable capital gain from the said transaction. cdtech In view of the foregoing, the aforementioned shares of stock can now be transferred and registered in the name of Ultrana Mineral Corporation in the Stock and Transfer Book of Oriental Petroleum and Mineral Corporation. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner