Provincial Government of Ilocos Norte is Subject to the 20% Withholding Tax on Interest on Philippine Currency Bank Deposits

December 26, 1991 BIR RULING NO. 274-91 24 (e) (2) 056-88 274-91 Gentlemen : This refers to your letter dated November 8, 1990 requesting a ruling on whether or not the Provincial Government of Ilocos Norte is exempt from the 20% withholding tax on its interest income from the Philippine currency bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements. In reply thereto, I have the honor to inform you that pursuant to P.D. No. 1177 dated July 30, 1977 all units of government including government-owned or controlled corporations shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws. Moreover, P.D. 1931 issued on June 11, 1984 withdrew all exemptions from the payment of duties, taxes, fees, imposts and other charges granted in favor of government-owned or controlled corporations including their subsidiaries. Finally, Executive Order No. 93 effective March 10, 1987 withdrew all tax and duty incentives granted to government and private entities. Such being the case, the Provincial Government of Ilocos Norte is subject to the 20% withholding tax on interest on Philippine currency bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements pursuant to Section 24 (e) (1) in relation to Section 50 (a) of the Tax Code, as amended. Very truly yours, (SGD.) JOSE U. ONG Commissioner