BIR Ruling No. 235-83

December 19, 1983 BIR RULING NO. 235-83 Gentlemen : This refers to your letter dated August 3, 1983 stating that pursuant to P.D. No. 1515, as amended by P.D. No. 1749, the jurisdiction, control and regulation over watershed areas and reservations proclaimed and thereafter proclaimed as such by the President of the Philippines as essential to waterbased power projects have been turned over from the Ministry of Natural Resources to the Ministry of Energy; that specifically, these geothermal reservations are Palinpinon in Negros Oriental, Tongonan in Leyte, Bac-man in Sorsogon and Tiwi in Albay; that to operationalize the provisions of these decrees, the Watershed Management Unit (WMU) was constituted in the Ministry of Energy (MOE) by virtue of Ministry Special Order No. 82-06-16 dated April 21, 1982; that essentially WMU represents MOE on any and all matters pertaining to the regulation, management, protection, development and rehabilitation of watershed areas/reservations covered by or which may be in the future be covered by said decrees; that to effectively manage the reservation, the Minister of Energy through the power vested in him, may issue an authority to conduct specific activities within the reservation and to seize illegally acquired forest and other watershed products. Based on the foregoing facts, you now request information as to whether or not the collection of fees like forest charges, application fee, permit fee and other fees by the Ministry of Energy Watershed Management Unit (MOE- WMU) or its authorized representative is legal. In reply, please be informed that pursuant to Section 281 of the Tax Code as amended, charges on forest products shall be paid by the person liable thereto to the revenue district officer, collection agent, or duly authorized treasurer of the municipality of the place where the timber concession is located or where the forest products were gathered and removed and at the time of the removal from or utilization of the said forest products within the concession area, or under certain conditions at the point of destination, and at such time and place as the Commissioner may direct. While Presidential Decree No. 1515, as amended, places under the Watershed Management Unit of the MOE, the regulation, management, protection, development and rehabilitation of watershed areas/reservation, the collection of forest charges and other fees is not one of those enumerated in the said Decree. Such being the case, the collection of forest charges and other fees by the Ministry of Energy-Watershed Management Unit is, therefore, without legal basis. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner Bureau of Internal Revenue