Bureau of Local Government Finance Opinion

December 9, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred to the City Treasurer of Manila the attached letter dated October 16, 1997 of Mr. C. P. Noel, SGV & Co. requesting in behalf of their client, D. M. Consujui, Inc. (DMCI) confirmation of their opinion that a business which is already subject to tax under Section 18 of Ordinance No. 7794, as amended, otherwise known as An Ordinance Enacting A Revenue Code For the City of Manila, should no longer be subject to tax under Section 21 (A) of the said Ordinance. Representations are made that DMCI is a corporation engaged in the business of architectural, construction and engineering works. For the taxable year 1997, DMCI was assessed by that Office to pay local taxes as provided for under Section 18 and Section 21(A) of Ordinance No. 7794. Section 18 refers to the business tax on contractors while Section 21(A) refers to the tax on business subject to the value-added tax under the National Internal Revenue Code. In this connection, the Department of Finance, on previous similar cases has expressed the view that "if a business is already taxed under sub-sections (a) to (g) of Section 143 of the LGC, such business should no longer be taxed under sub-section (h), for reason that such imposition will constitute double taxation as the same kind of tax is being imposed twice on the same business." The foregoing views are in reiteration of the previous action on a similar query addressed to Mr. Alfredo T. Libunao, Office Manager of R. R. Baltazar and Co., Inc., copy enclosed. Accordingly, and considering the representations made by DMCI, this Bureau expresses the view that the imposition of local taxes under Sections 21 and 18 of the subject Ordinance is tantamount to double taxation. In view of the foregoing, that Office is hereby instructed to cease and desist from collecting the business taxes of DMCI under Section 21(a) of the abovementioned Ordinance. Finally, and considering the length of time that has elapsed, preferential attention should be given on the suggestion embodied under the 1st Indorsement dated March 12, 1997 of this Bureau, copy enclosed, that effort be exerted by that Office to advise the city officials concerned about the mounting complaints of the taxpayers of that city against the imposition in question which should not be enforced/collected by that Office. DcICEa (SGD.) LORINDA M. CARLOS Executive Director