BIR Ruling [UN-342-95]

September 20, 1995 BIR RULING [UN-342-95] 3rd Indorsement Referred to the Assistant Commissioner, Financial & Administrative Service, Attn.: Chief, Revenue Accounting Division, the entire papers relative to the claim of the Mayor of Calinog, Iloilo for its share of the VAT collection and other percentage taxes pursuant to R.A. No. 7643, which amended Section 282 of the Tax Code stating: "Section 282. Disposition of national internal revenue . National internal revenue collected and not applied as herein-above provided or otherwise specially disposed of by law shall accrue to the National Treasury and shall be available for the general purposes of the Government, with the exception of the amounts set apart by way of allotment as provided for under Republic Act no. 7160, otherwise known as the Local Government Code of 1991. "In addition to the internal revenue allotment as provided for in the preceding paragraph, fifty percent (50%) of the national taxes collected under Sections 100, 102, 112, 113, and 114 of this Code in excess of the increase in collections for the immediately preceding year shall be distributed as follows: (a) Twenty (20%) shall accrue to the city or municipality where such taxes are collected and shall be allocated in accordance with section 150 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991: and (b) Eighty percent (80%) shall accrue to the National Government." Based on the foregoing, you are hereby directed to compute the share of said municipality from its VAT and other percentage taxes collection using the following formulations: 1. Determine the total collection in the Municipality of Calinog, Iloilo, from the sale of goods (Sec. 100), sale of services (Sec. 102), 2% percentage tax (Sec. 102), gross receipts tax from hotels, motels and other (Sec. 113), and Caterer's tax (Sec. 114) of the Tax Code, of a given year beginning 1993. 2. Determine the 50% thereof; 3. Determine the collection of the same municipality from the same sources corresponding to the immediately preceding year; 4. Determine the 50% thereof; 5. Compute the difference between the two amounts under No. 2 and No. 4; 6. 20% of the difference between No. 2 and 4 is the share of Calinog, Iloilo; Thereafter, certify to the Department of Budget and Management the 20% share of Calinog, Iloilo, for appropriate action. cd LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue