Bureau of Local Government Finance Opinion

February 19, 1996 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred to the City Treasurer, Mandaluyong City. This refers to the letter dated September 5, 1995 of the Chief, Business Permit and License Office, that city, requesting opinion regarding the imposition of a tax on the business of printing and publication pursuant to Section 136 of the Local Government Code of 1991 (LGC), as implemented by Article 8 of the Mandaluyong Business Tax Code of 1991. The request is being made in view of the dissenting opinion of Mr. Precioso J. Sapina, Comptroller of three (3) firms engaged in the printing of newspapers and magazines that the publication of the same is exempt from payment of taxes as the Code does not categorically specify or mention newspapers or magazines, or even newspaper publishers. Representations are made that Metromedia Times Corp. and Bandera Publishing Corporation, publishers of The Manila Times and the tabloid Bandera, respectively, as well as the Premier Printing Co., printer of the abovestated newspapers were subjected to examination and investigation by that Office. A re-assessment was made in view of an alleged misdeclaration made by said firms and on the basis of Sec. 193 of the LGC which implies that all tax exemptions have been withdrawn upon the effectivity of the said Code. Said re-assessment also included a separate computation of the income derived from advertising which, likewise, is being contested by Mr. Sapina, citing that the advertising revenue is incidental or part of the business operations of a newspaper publisher and, therefore, should not be taxed separately. In this connection, it is informed that under the LGC, local government units are no longer prohibited from imposing taxes on the business of printing and publication of any newspaper, magazine, review or bulletin, appearing at regular intervals and having fixed prices for subscription and sale, and which is not published primarily for the purpose of publishing advertisement which was one of the common limitations under Sec. 5(p) of the former Local Tax Code (PD 231, as amended). While it is true that the code does not categorically specify or mention newspapers or magazines under Section 136, quoted hereunder, they may be deemed included in the blanket clause and others of similar nature that follows those specifically mentioned. Hence, the rule of statutory constructions cited, that what has not been expressly enumerated is deemed to be excluded does not apply in this case, otherwise the use of the said all-inclusive clause would be rendered nugatory. (Secretary of Justice Appeal No. 7, s. 1984.) "SEC. 136. Tax on Business of Printing and Publication The province may impose a tax on the business of persons engaged in the printing and/or publication of books, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, and others of similar nature at a rate not exceeding fifty percent (50%) of one percent (1% ) of the gross annual receipts for the preceding calendar year. (Emphasis supplied) "xxx xxx xxx" Moreover, it may be worth mentioning that only the receipts from the printing and/or publishing of books or other reading materials prescribed by the Department of Education, Culture and Sports (DECS) as school text or references shall be exempt from the tax imposed under the aforecited Section 136 of the Code. On the basis of the foregoing, it may be stated that Metromedia Times Corporation, Bandera Publishing Corporation and Premiere Printing Co. are liable to the payment of tax imposed in the tax ordinance of Mandaluyong City under Section 136 of the LGC, as well as the Mayors permit and other regulatory fees imposed likewise by the city under a duly-enacted ordinance. As regards the revenue derived from advertising, this Department concurs in the view of the comptroller that the same is merely incidental to the main business of publication, hence, it is not subject to the imposition of any separate tax or fee. Be guided accordingly. By authority of the Secretary: LORINDA M. CARLOS Executive Director Bureau of Local Government Finance