BIR Ruling No. 402-61

August 17, 1961 BIR RULING NO. 402-61 2nd Indorsement Respectfully returned to the Regional Director, B.I.R. Regional District No. 5, San Pablo City, the within papers consisting of 34 pages relative to the assessment of contractor's percentage tax against Mr. Juan M. Villegas of Nasugbu, Batangas, a private surveyor who undertook the survey of Hacienda "Carmen" for Roxas y Cia. The contractor's fee received for the survey was sought to be tax under the provision of Section 191 of the Tax Code. LLphil On May 8, 1959, this Office issued a ruling on this particular case, to the effect that the contract of survey in question did "not bring the contractor within the purview of section of the Code", consequently, his fee was not subject to the 5% tax imposed on contractors. Pertinent portions of said ruling are quoted below, thus: "A surveyor who accepts contracts to survey, supplying the necessary materials incident thereto, such as "mohones" (markers), hiring other surveyors to assist him is not a contractor within the purview of Section 191 of the Tax Code. The 'contract to survey' is a contract for professional service. The service performed by the surveyor under such contract constitutes the exercise of his profession. The surveyor-contractor in such case, including the surveyors employed by him are only subject to the occupation tax." (B.I.R. Ruling No. 245, dated May 8, 1959). In a memorandum submitted by the Chief, Investigation Branch of that Regional District dated March 24, 1961, he contended that the ruling issued by this Office on May 3, 1959 was in conflict or inconsistent with the ruling promulgated on October 31, 1952. For purposes of this discussion, the ruling in question is quoted below as follows: aisadc "As regards a civil engineer who does not undertake any contract work but merely supervises the construction jobs for a fixed fee or compensation, he is not considered a contractor. However, such duties constitute the practice of civil engineering, for which reason, he is subject to the civil engineer's occupation tax. On the other hand, if an engineer engages in the construction of buildings, or fixed structures of utilitarian character, pursuant to which he draws plans and prepares designs in his capacity as an engineer, and assumes personal direction of the construction, employing means and methods peculiar to contractors, he is subject to the occupation tax as an engineer and to the fixed and percentage taxes as contractor, if he is in fact the contractor who actually realized the gross receipts derived from the construction work." (2nd par., B.I.R. Ruling dated October 21, 1952). A perusal of the two rulings would seem to show at first blush that there is an apparent conflict between them. The conflict, however, is more apparent than real. While it is true that under the facts enumerated in both rulings, Mr. Juan M. Villegas may well be considered as a contractor, as this term is commonly and generally understood, it does not necessarily follow that his earnings in this particular 'contract of survey' is subject to the 3% contractor's tax provided in Section 191 of the Code. cdt Section 191 of the Tax Code enumerates the persons, activities or work, as well as the occupations subject to the tax and the contract of survey is not one of those enumerated in said section. A building contractor, however, is expressly included in said enumeration. Congress must consequently have deliberately omitted or excluded the occupation of surveying from the operation and purview of said Section 191. "Expressio unius est exclusio alterius". This rule of statutory construction means "that where a statute expressly describes a particular act, thing, or person to which it shall apply, there is an inference that what is omitted or not included was intended to be omitted and excluded". (Words & Phrases, Vol. 15A p. 145, citing: Dozsofi v. Jacoby, 36 N.Y.S. 2d 672, 675, 178 Misc. 851) It may be argued that the contract of survey may necessarily be included in the phrase "and other independent contractors", found at the end of the enumeration. This argument, however, becomes untenable under the principle of "ejusdem generis", which may be stated thus: "By the rule of construction known as 'ejusdem generis', where general words follow the enumeration of particular classes of persons or things, the general words will be construed as applicable only to persons or things of the same general nature or class as those enumerated. The particular words are presumed to describe certain species, and the general words to be used for the purpose of including other species of the same genus. The rule is based on the obvious reason that if the legislature had intended the general words to be used in their unrestricted sense they would have made no mention of the particular classes. The words "other"' or "any other" following an enumeration of particular classes, are therefore to be read as "other such like", and to include only others of like kind or character." (Words & Phrases, Vol. 14, pp. 220-221, citing: People v. Mckean, 243 P. 898, 900, 76 Cal. App. 114). There is another cogent reason why the "contract to survey" does not come within the purview of Section 191 of the Tax Code. The contractor who undertakes to survey private land cannot even be classified as an independent contractor or as a contractor for that matter, as the term is generally and commonly understood. Survey work of this nature is under the supervision and control of the Director of the Bureau of Lands and the Secretary of Agriculture and Natural Resources. Execution of the work is done in accordance with rules and regulations established and promulgated by the aforementioned governmental entities. And the result of the survey is subject to the verification and correction of government surveyors under the direct supervision of the Bureau of Lands. For that matter, the "contract to survey" is nothing more than a contract for professional service, hence, exempt from the provisions of Section 191. In view of the foregoing, it is the opinion of this Office that there is actually no conflict between the two rulings issued by this Office one dated October 21, 1952 and the other dated May 8, 1959. As a necessary consequence thereof, the fee received by Mr. Juan M. Villegas of Nasugbu, Batangas, for the survey of the Hacienda "Carmen" is not subject to the 3% tax imposed by Section 191 of the Tax Code. LexLib (SGD.) MELECIO R. DOMINGO Commissioner of Internal Revenue