BIR Ruling [UN-096-A-95]

March 8, 1995 BIR RULING [UN-096-A-95] Rural Bank of Monkayo, Inc. National Highway Monkayo, Davao del Norte Attention: Ms . Marita D . Tuazon Gentlemen : This refers to your protest dated January 31, 1991 regarding your deficiency income and business taxes assessments for the taxable year 1987 issued under FAN-1-87-91-000428 and FAN-4-87-91-000429, both dated January 18, 1991 in the amounts of P298,813.37 and P98,472.53, respectively. cdi Records of the case disclosed that you are a domestic corporation duly registered with the Securities and Exchange Commission and authorized by the Central Bank of the Philippines to engage in rural banking business in Monkayo, Davao del Norte. On July 3, 1989, our Revenue Examiner required you to present documents and supporting papers essential to the examination/investigation regarding the said assessments. You failed, however, to present the supporting papers for disbursements and argued instead that the bank is tax-exempt pursuant to Presidential Decree No. 2026 dated February 3, 1986, considering that your assets are less than P30,000,000.00 (i.e., P9,949,836.00). Our examiner, however, contended that tax exemption privileges granted to rural banks under the aforesaid Presidential Decree No. 2026 had already been withdrawn under Executive Order No. 93 dated December 17, 1986. Please be informed that although it is true that rural banks with net assets of less than P30,000,000.00 enjoy tax exemptions and/or preferential tax privileges for a period of five (5) years from the date of the effectivity of P.D. No. 2026, which was on February 3, 1986, said exemption, however, had been withdrawn by Executive Order No. 93 effective March 10, 1987. (B.I.R. Ruling Nos. 245-89 and 088-90) In view thereof, your PROTEST is hereby DENIED FOR LACK OF LEGAL BASIS. You are, therefore, requested to pay the respective amounts of P298,813.37 and P98,472.53, as deficiency income and business taxes for the year 1987 within ten (10) days from your receipt of this letter. aisadc This constitutes the final decision of this Office on the matter. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue