Bureau of Local Government Finance Opinion

March 25, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Ponciano D. Bejar, Jr . Operations Manager Sanvit Transport Company, Inc. 1193 Vito Cruz Ext. or Zapote Street Brgy. Sta. Cruz Makati City S i r : This refers to your letter dated February 25, 1998 requesting clarification regarding the business tax imposed on a trucking company. Representations are made that the Sanvit Transport Company, Inc. (STCI) is engaged in refrigerated trucking services delivering perishable poultry, dairy, fresh fruits, juices and marine products to Metro Manila markets, malls and sari-sari stores as well as to the provinces. STCI renders services to its mother company, SMI Fish Ind., an exporter and local seller of marine products, and other companies whose products need refrigeration for distribution. STCI contends that it is operating with a Certificate of Public Conveyance to Operate Freight Trucks, granted by the Land Transportation Franchising and Regulatory Board, and as such, is tax exempt. ATHCDa However, the City Government of Makati is demanding that STCI settle a business tax deficiency amounting to P.328M. On the basis of the representations made by STCI, it may be stated that a firm which delivers any merchandise in behalf of its clients for a fee, using its own trucks, is merely a transportation contractor. In this connection, it is informed that as expressed by the Department of Finance in its letter dated June 2, 192 addressed to Mr. Romeo P. Santos, General Manager, Vanhaul. Inc., copy enclosed, the Municipality of Taguig may not impose a business tax on the business of Vanhaul, Inc. as a transportation contractor pursuant to Section 133(j) of the Local Government Code of 1991. It is hoped that this will help clarify matters. Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director