Removal of the Tax Exemption of Contractors

July 14, 1958 BIR RULING NO. 367-58 The Regional Director Regional District No. 5 Lipa City S i r : In reply to your letter dated March 17, 1958, you are hereby informed as follows: Contractors are now subject to the percentage tax, regardless of the amount of their gross receipts. This is the consequence of the amendment effected to Section 191 by Republic Act No. 1612 removing the exemption of contractors whose gross receipts do not exceed P200.00 a quarter from the percentage tax. Such being the case, they are subject to the fixed tax even if their gross monthly receipts do not exceed P200.00. Peddlers are subject to the graduated fixed tax (C-13) or manufacturer's or producer's fixed tax (C-14), regardless of whether or not they have a traveling outfit, such as a vehicle or van or pushcart. A peddler may ply his trade anywhere in the Philippines under his C-13 or C-14 privilege tax-receipt because of the national character of an internal revenue tax. Manufacturers of firecrackers are not subject to any fixed tax. It is true, as you have observed that this is another instance where a person is not subject to any fixed tax but may be subject to the percentage or specific tax. LexLib Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue