Tax Liability of Persons Engaged in Business as General Merchants

May 13, 1959 BIR RULING NO. 257-59 Mr. Orlando S. Purugganan Office of the Treasurer Basco, Batanes S i r : Reference is made to your letter of February 9, 1959, inquiring as to whether or not persons engaging in business as general merchants are subject to the payment of 3% percentage tax on their monthly gross receipts of over P200.00 in accordance with General Circulars No. 252 and 254 of this Bureau. In reply, I have the honor to inform you that a person who engages in the sale of general merchandise is not subject to the 3% percentage tax but only to the graduated fixed annual tax (C-13), the initial payment of which is P10.00 and thereafter, the amount of tax will depend upon the amount of his gross sales during the preceding calendar year, pursuant to section 182(A)(2) of the National Internal Revenue Code. Persons subject to the graduated fixed annual tax whose gross sales during the preceding year are not more than P2,000 are exempt from tax. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue