BIR Ruling No. 362-61

September 19, 1961 BIR RULING NO. 362-61 Mr. Carlos V. Espaso Collection Agent Labo, Camarines Sur S i r : In answer to the queries posed in your letter dated June 12, 1961, which was referred to this Office by the Philippines Free Press, you are informed as follows: The amount of capital invested in a "sari-sari" store is not the basis for determining whether or not it is subject to the graduated annual fixed tax prescribed in Section 182(A)(2) of the Tax Code; rather, it is the amount of gross annual sales during the preceding calendar year. If said gross annual sales does not exceed P2,000.00, the store is not subject to the tax for the succeeding year; otherwise, it is subject. The only exception is the case of a person first engaging in the business, who should pay the amount of P10.00 before engaging therein. As in the case of "sari-sari" stores, the amount of capital does not determine the taxability or non-taxability of a tailor shop. A tailor shop is invariably subject to the fixed annual tax imposed in Section 182(A)(1) of said Code and to the 3% tax under Section 191 thereof on its gross receipts. However, in the remote possibility that during a given month it failed to realize any receipt, then no tax (3%) is due for that month. A collection agent can inquire or determine whether or not a taxpayer has paid the corresponding privilege taxes, such as the C-13, B-9, etc. However, he does not have the power to seize or confiscate goods subject to specific tax even if the tax has not been paid thereon. A collection agent can seize defective instruments of weights and measures (Sec. 284, Tax Code). However, pursuant to paragraph III-B, Memorandum Circular No. 3 dated August 15, 1960 of the Department of Finance, the duties and responsibilities of collecting, among others, weights and measures fees repose with the local treasurers. He (collection agent) has also the power to apprehend bus conductors for not issuing tickets or receipts to passengers, such act being a patent violation of internal revenue law (Sec. 14, Ibid.). Agents of mutual fund companies are not subject to any business or occupation tax. When a taxpayer refuses to pay, you should explain to him how the taxes paid are returned by the government to the people in the form of essential services, such as public schools and teachers, public works and police protection. Should he still refuse, you should refer the matter to the nearest provincial revenue officer, internal revenue agent or examiner. In this connection, your attention is invited to the fact that being an employee of this Office, it is improper for you to have sought the help of the Philippines Free Press to enlighten you on internal revenue matters. Next time, such matter should be addressed to the provincial revenue officer or regional director stationed thereat or to this Office. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue