Whether the City Government of Manila Will be Required to Pay Importation Taxes for the Firefighting Equipment and Protective Gears Which are Donated to it by the Japanese Government under Its Grant-in-Aid Program

March 2, 1994 BIR RULING NO. 068-94 R.A. 7160 000-00 068-94 Hon. Ma. Corazon R. Caballes Councilor, 6th District City Council Rm. 452, Fourth Floor City Hall, Manila M a d a m : This refers to your letter dated December 23, 1993 requesting for a ruling as to whether or not the City Government of Manila will be required to pay importation taxes for the firefighting equipment and protective gears which are donated to it by the Japanese Government under its grant-in-aid program. In reply thereto, please be informed that the said firefighting equipment and protective gears are EXEMPT FROM THE PAYMENT OF IMPORTATION TAX, subject, however, to the conditions provided for under Section 382 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, viz: "Sec. 382. Tax Exemption Privileges of Local Government Units . Local government units shall be EXEMPT FROM THE PAYMENT OF duties and TAXES FOR THE IMPORTATION OF heavy equipment or machineries which shall be used for the construction, improvement, repair, and maintenance of roads, bridges and other infrastructure projects, as well as garbage trucks, FIRE TRUCKS, AND OTHER SIMILAR EQUIPMENT: Provided, however, That such equipment or machineries shall not be disposed of, either, by public auction or negotiated sale as hereinabove provided, within five (5) years from the importation thereof. In case the machinery or equipment is sold within the five-year period, the purchasers or recipients shall be considered the importers thereof, and shall be liable for duties and taxes computed on the book value of such importation ." (Emphasis and capitalization supplied.) cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue