Tax Liability of a Producer of Agricultural Products

June 22, 1959 BIR RULING NO. 311-59 Mr. Jesus Pajo Sierra Bullones Bohol S i r : This is with reference to your letter dated October 1, 1958, pertinent parts of which are quoted hereunder: "I am intending to put up a Nursery or Experimental Station of my own where I will plant fruit trees of various kinds and in fact have several hundreds trees now growing in my selected lot for the said purpose. These fruit trees are planted to be planted by way of seedlings, grafted or budded ones." "The primary purpose of this project is to implement the Administration's campaign for more fruit trees production in the Rural Areas of the country. This is so because as soon as there will be more than enough seedlings, grafted or budded or marcoted trees, for propagation purposes, I sell at a down to the earth prices to the consuming public. If the supply is not enough and while the Nursery is infant, I will secure more seedling, marcoted, grafted or budded trees from Mindanao and Visayas as the case may be for the general public who needs it." You now request information as to the taxes to which you are liable. In reply thereto, I have the honor to inform you that, as producer of agricultural products, you are not subject to the fixed and percentage taxes prescribed in Title V of the Tax Code. However, you are subject to the income and residence taxes. Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue