Payment of the Annual Fixed Tax of P5,000.00 and to the 10% Sales Tax on Sales of Logs

August 26, 1988 BIR RULING NO. 418-88 163 (3) 289-87 418-88 Gentlemen : This refers to your letter dated October 27, 1987 to our Revenue District Officer of Baler, Quezon which is in reply to his letter dated October 20, 1987, reiterating his request that you pay the annual fixed tax of P5,000.00 and the 10% sales tax on logs sold for the years 1986 and 1987. In disclaiming your liability to the annual fixed tax of P5,000.00 and the 10% sales tax on logs, you cited BIR Ruling No. 289-87. In reply, please be informed that the said BIR Ruling No. 289-87, it is stated that you are not subject to the sales tax on your sales of agricultural food and non-food products as long as they are in their original state, in accordance with Section 163(3) of the Tax Code; and that you are not subject to the annual fixed tax of P200.00 prescribed under Section 161(1) of the Tax Code. However, this ruling does not apply to the logs sold by you which is subject to the 10% sales tax, as provided for in then Section 165(A)(3)(j) of the Tax Code, as amended by P.D. No. 2031 effective January 1 until July 31, 1985 and to then Section 163(2)(k) of the Tax Code, as amended by Executive Order No. 36 effective August 1 until December 31, 1987. Likewise, the aforesaid ruling does not apply to your liability to the annual fixed tax of P5,000.00 as a forest or logging operator or concessionaire, in accordance with then Section 161(ww) of the Tax Code. In short, our Revenue District Officer of Baler, Quezon is correct in holding you liable for the payment of the annual fixed tax of P5,000.00 and to the 10% sales tax on sales of logs for the years 1986 and 1987. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner