Whether the Coconut Consumer Stabilization Fund (Coconut Levy) is a Public Trust Fund

December 15, 1992 BIR RULING NO. 354-92 24 000-00 354-92 Philippine Coconut Authority Don Mariano Marcos Ave., Diliman Quezon City Attention: Mr . Virgilio M . David Administrator Gentlemen : This refers to your letter dated November 4, 1992 requesting opinion as to whether or not the Coconut Consumer Stabilization Fund (Coconut Levy) is a public trust fund. cdtech It is represented that the BIR's position on the matter is vital to your efforts to recover the Coconut Levy Fund. In reply thereto, I have the honor to inform you that the coconut levy funds were raised by the State in the exercise of its police and taxing powers. Thus, the Supreme Court of the Philippines, already had the occasion to make an En Banc pronouncement that it was the welfare of the entire nation that provided the prime moving factor for the imposition of the levy. Neither can it be denied that the coconut industry is one of the major industries supporting the national economy. Thus, the utilization and proper management of the coconut levy funds, raised as they were by the State's police and taxing powers, are certainly the concern of the government. The coconut levy funds are clearly affected with public interest. ( Philippine Coconut Producers Federation, Inc . (COCOFED), et al. vs . Presidential Commission on Good Government, et al. , G.R. No. 75713, En Banc , October 2, 1989, 178 SCRA 236). Moreover, the coconut levies are enforced contributions levied by the taxing power on the coconut farmers. The levies imposed upon the coconut products of the coconut farmers are taxes in fact. They are enforced contributions levied by the taxing power on the coconut farmers, neither dependent upon the will nor the contractual assent, express or implied, of the persons thus taxed. Thus, the coconut farmers were originally required by R.A. 6260, on June 19, 1971, to pay the sum equivalent to P0.55 on their first domestic sale of every one hundred kilograms of copra, or its equivalent in terms of other coconut products; P0.50 of the execution were accrued to a special fund, the COCONUT INVESTMENT FUND (CIF). Likewise, the levy of the P15.00 per 100 kilograms of copra resecada or its equivalent in other coconut products, set by P.D. 276 on August 20, 1973 were imposed on the farmers first domestic sale and they were accrued to a separate trust fund known as the COCONUT CONSUMERS STABILIZATION FUND (CCSF). Such being the case, and since the burdens of the levies thereby imposed and collected were meant to be shouldered by the coconut farmers, the coconut levy is not a public trust fund for the benefit of the coconut farmers, but is in the nature of a tax and, therefore, are public funds that are subject to government administration and disposition. aisadc Very truly yours, JOSE U. ONG Commissioner of Internal Revenue