Rural Bank of Ibajay Exempt from 5% Bank Tax

May 5, 1993 BIR RULING NO. 185-93 RURAL BANK OF IBAJAY EXEMPT FROM 5% BANK TAX 119 000-00 185-93 Rural Bank of Ibajay, Inc. Ibajay, Aklan Attention: Ma . Lourdes M . Miraflores Manager This refers to your letter dated November 16, 1992, addressed to the Revenue District Officer of Kalibo, Aklan, which was in turn referred to this Office by the Regional Director of BIR Region No. 6-A, Iloilo City, relative to your request for exemption from the payment of the 5% bank tax prescribed in Section 119 of the Tax Code, as amended. In reply, please be informed that pursuant to Section 15 of R.A. No. 7353, otherwise known as the Rural Banks Act of 1992, reading: "Sec. 15. All rural banks created and organized under the provisions of this Act shall be exempt from the payment of all taxes, fees and charges of whatever nature and description, except the corporate income tax and local taxes, fees and charges, for a period of five (5) years from the date of commencement of operations. "All rural banks in operation as of the date of approval of this Act shall be exempt from the payment of all taxes, fees and charges of whatever nature and description, except the corporate income tax and local taxes, fees and charges, for a period of five (5) years from the approval of this Act". your request for exemption from 5% bank tax imposed in said Section 119 of the Tax Code, is hereby granted. It may be stated, however, that R.A. No. 7353, although approved on April 2, 1992, was published in the Official Gazette on May 25, 1992. Therefore, the said Act took effect only after fifteen (15) days following said publication, or on June 9, 1992, pursuant to Article 2 of the new Civil Code of the Philippines, and in line with the Supreme Court decision in the case of Taada, et al. vs. Tuvera , 146 SCRA 446. In short, you are still liable to the 5% bank tax during the period from April 1 to June 8, 1992; hence, your claim for refund of the amount of P6,446.68, representing 5% bank tax which you paid for the quarter ending June 30, 1992, will be prorated. VICTOR A. DEOFERIO, JR. Deputy Commissioner of Internal Revenue