Rate of Sales Tax on Gold

May 29, 1987 BIR RULING NO. 144-87 163 (1) 000-00 144-87 S i r : This refers to your telegram dated January 15, 1987 requesting a ruling as to the rate of sales tax on gold. In reply, you are informed that gold being a metallic minerals is subject not only to the 5% royalty tax, but also to the sales tax payable by the lessee, owner or operator of a mine selling the gold locally. (Sec. 216 (b)(3), Tax Code) Section 163 (1)(a) of the Tax Code, one of the sub-paragraphs enumerating the non-essential articles subject to the 30% sales tax reads as follows.: "(a) All articles commonly or commercially known as jewelry, whether real or imitation, pearls, precious and semi-precious stones and imitations thereof; articles made of, or ornamented, mounted or fitted with, precious metals or imitations thereof or ivory (not including surgical and dental instruments, silver-plated wares, frames or mountings for spectacles or eyeglasses, and dental gold or gold alloys and other precious metals used in filling, mounting or fitting of the teeth), opera-glasses and lorgnettes. The term "precious metals" shall include platinum, gold, silver, and other metals of similar or greater value. The term "imitations thereof" shall include platings and alloys of such metals." Under the above-quoted sub-paragraph (a), the term "precious metal" includes gold. Therefore, gold is subject to the 30% sales tax. Since the law does not make any distinction, the 30% rate applies even if the gold is sold to the Central Bank and used as its monetary reserve or substitutes thereof, or is used or forms part of jewelry. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner