Rate of Percentage Tax on Locally Manufactured Plastic Products

March 2, 1959 BIR RULING NO. 120-59 Union Manufacturing Company, Inc. Quirino Ave., Tambo Paraaque, Rizal (P.O. Box No. 2558, Manila) Attention : Mr . Pablo C . Bulandus Assistant Manager Gentlemen : Reference is made to your letter dated February 20, 1959, stating that effective January 1, 1959 and ending December 31, 1959, your tax exempt Company is subject to the payment of 10% on all taxes directly payable by it. In other words, the full exemption granted to your Company from internal revenue taxes prior to January 1, 1959 has been diminished to 90% only. For this reason, you now request information as to what rate of percentage tax will your Company pay on its manufactured plastic products, such as tablewares, bottles, caps, water hose, food containers, toiletries containers, hair brushes, soap boxes, powder boxes, chopsticks, buttons, cloth hangers, rulers, cigarette cases, necklace beads, whistles, toys, haircurlers, plastic sheets and plastic films. cdll In reply thereto, please be informed that locally manufactured plastic products, such as those above-mentioned, are subject to 7% percentage tax, pursuant to Section 186 of the Tax Code, based on the gross selling price thereof minus the deductible cost of tax-paid raw materials used. Using this as the basis of your computation, the 10% tax may then be computed thereon to arrive at the correct percentage tax you will actually pay within the prescribed period as required in Section 183 of the same Code. llcd Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue