Payment of the Forest Charges on the Forest Products

September 24, 1958 BIR RULING NO. 522-58 Aguinaldo Development Corporation Metropolitan Theater Building Manila Gentlemen : Reference is made to your letter dated September 17, 1958 relative to the payment of the forest charges on the forest products cut by you in the land grants of the Boy and Girl Scouts Organizations of the Philippines. cdt The lands were granted and ceded to said organizations by Republic Acts Nos. 397 and 540, to be held and administered by them as permanent endowments for their additional support and maintenance. These lands were, after survey, deeded, conveyed and transferred to these organizations. In effect, these lands were removed from the public domain. This conclusion is inferentially adduced from the provisions of the two Acts stating that "Such portion or portions of the lands herein granted which are not developed, cultivated, leased, or otherwise disposed of, after the lapse of twenty years from the date in which such lands have been deeded, conveyed and transferred in accordance with this Act, shall revert to the public domain and shall be open for settlement and disposition in accordance with the Public Land Act." Such land grants may, therefore, be considered as private lands; and considering that the Government itself deeded the lands to the grantees thereof, said lands may ipso facto be considered as registered private lands. In accordance with Section 266 of the Tax Code, as amplified by Section 15(a) of the Revenue Regulations No. 85, the Forest Products Regulations, forest products cut, gathered and removed from registered private woodlands are not subject to forest charges, but they must be invoiced, when removed to another municipality or for commercial purposes in the manner prescribed by the regulations. Accordingly, no forest charges are actually due and payable on the timber removed and cut by you under the "Timber License and Agricultural Development Agreement" entered into by you with the aforesaid organizations. In the light of the foregoing, you may continue to make payment to said organizations of the amount denominated in your agreement as forest and reforestation charges but which is actually a royalty paid by you to said organizations for the exploitation of their land grants. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue