Real Estate Dealers' Fixed Tax Case of Mr. Clotildo S. Rosal

July 28, 1959 BIR RULING NO. 383-59 Yu Yek Huy Trading Corp. P.O. Box 1530, Manila Gentlemen : Reference is made to your letter dated April 21, 1959, stating that your office in Iloilo City has always been complying with the provisions of section 14 of Revenue Regulations No. V-1, otherwise known as the Bookkeeping Regulations, particularly the requirement of placing in the purchase or expense voucher the number, date and place of issue of the vendor's resident certificate. However, there are cases where said office is constrained to buy copra from vendors who do not have residence certificates, with the result that it has nothing to place in the corresponding vouchers. You stated further that your said office had tried in insisting the production by vendors in such cases of their residence certificates, but it was in vain and instead they went to the extent of discontinuing selling their copra to your office. You, therefore, now request exemption from complying with the requirement in those cases where the vendors do not possess residence certificates. In answer thereto, I have the honor to inform you that, considering that the facts and circumstances upon which your request is based are not meritorious, the same is hereby denied. For to grant your said request would, in effect, be tolerating the act of those vendors of neglecting or refusing to pay the residence tax. There is no merit in your contention that some of the aforementioned vendors "may be exempt from the Residence Tax Law because they are not engaged in business or they do not own real estate property worth P1,000.00". Under section 1 of said law, an inhabitant who, among other things, is engaged in business or occupation or who owns real property with an aggregate assessed value of P1,000.00 or more is subject to the basic residence tax of P0.50. The vendors in question whether the copra they sell are being produced by them or merely purchased from producers thereof, are certainly "engaged in business or occupation." Moreover, to fall within the purview of said section, the two requisites, that is, engaging in business or occupation and owning real property with an aggregate assessed value of P1,000.00 or more, need not concur. Very truly yours, (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue