Request to Allow Mindanao Steel Corporation of the Don Fernando Jacinto Group of Companies to Pay its Monthly Value-Added Tax to BIR Collection Agent/Officer Thereat Who Will in Turn Automatically Retain the Municipality's Corresponding 20% Share

April 13, 1994 BIR RULING NO. 095-94 110; 150 000-00 095-94 Hon. Yuri M. Taongan Municipal Mayor Lugait, Misamis Oriental S i r : This refers to Resolution No. 149, Series of 1993 of the Sangguniang Bayan, that municipality, requesting this Office to allow Mindanao Steel Corporation of the Don Fernando Jacinto Group of Companies to pay its monthly value-added tax to our collection agent/officer thereat who will in turn automatically retain the municipality's corresponding 20% share. In reply, please be informed that the aforesaid Resolution cannot be given due course by this Office for lack of legal basis. Under Section 110(b) of the Tax Code as amended by Republic Act No. 7643, the monthly value-added tax shall be paid to a bank duly accredited by the Commissioner located within the revenue district where Mindanao Steel Corporation is registered. However, if there is no accredited bank in the revenue district where subject-taxpayer is registered, the monthly value-added tax shall be paid to the revenue district officer, collection agent or duly authorized treasurer of the locality where its place of business is located, in that order. Moreover, even if we allow Mindanao Steel Corporation to pay its value-added tax in your municipality, our collection agent thereat cannot automatically retain your corresponding share from the value-added tax collected from said taxpayer. The allocation of the shares of a Local Government Unit (LGU) in the proceeds of the value-added tax collected shall be in accordance with the procedures prescribed in Section 150 of Republic Act No. 7160, otherwise known as the Local Government of 1991, pursuant to Section 282 of the Tax Code. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue