2% Tax Charged on Owners of Palay or Corn Milled for Compensation

April 11, 1958 BIR RULING NO. 221-58 Mr. Norberto M. Andrin Barrio Pikoy, Ormoc City S i r : In reply to your letter dated March 11, 1958, I have the honor to inform you that in accordance with Section 189 of the Tax Code operators or proprietors of rice mill or corn mills shall pay a tax equivalent to two per centum of the gross value in money of all the rice, ground or milled corn, manufactured or milled by them including the by-products of the raw materials from which said articles are produced or manufactured, such tax to be based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse. However, pursuant to Section 4 of Revenue Regulations No. 7, known as the "Rice and Corn Mills Regulations", in case palay or corn is milled for compensation, the 2% tax shall be charged to the owner thereof, and withheld by the operator or proprietor of the rice or corn mill. It will, therefore, be observed that the operator or proprietor in such case is a mere withholding agent of the Government, but if he fails to withhold the tax, he shall be held liable for the payment thereof. aisadc Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue