Request for the Issuance of a Tax Exemption Certificate in View of the En Banc Decision of the Supreme Court in the Case of "City of Manila, Hon. Alfredo S. Lim, et al. vs. Hon. Angel Valera Colet, et al. (G.R. No. 120051, December 10, 2014)" Declaring Section 21 (B) of the Manila Revenue Code, as Amended, as "Null and Void"

January 11, 2016 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Daisy D. Lauron Corporate Secretary and Finance Manager LUCKYBAY TRUCKING, INC. Lot 18, Block 37, Green Valley Subdivision San Nicolas III Bacoor City SUBJECT : Request for the Issuance of a Tax Exemption Certificate in View of the En Banc Decision of the Supreme Court in the Case of "City of Manila, Hon. Alfredo S. Lim, et al. vs. Hon. Angel Valera Colet, et al. (G.R. No. 120051, December 10, 2014)" Declaring Section 21 (B) of the Manila Revenue Code, as Amended, as "Null and Void" Dear Ms. Lauron : This has reference to your letter dated January 8, 2016, requesting this Bureau to issue a Tax Exemption Certificate for and in favor of Luckybay Trucking, Inc. It is alleged that the City of Bacoor advised you to secure from this Bureau a Certificate of Tax Exemption for their review and consideration. It is your contention that Luckybay Trucking, Inc. is exempt based on the En Banc Supreme Court Decision entitled, " City of Manila, Hon. Alfredo S. Lim, et al. vs. Hon. Angel Valera Colet, as Presiding Judge, RTC of Manila (Br. 43), and Malaysian Airline System , (G.R. No. 120051, December 10, 2014)." In the said decision, the Supreme Court declared Section 21 (B) of the Manila Revenue code, as amended, null and void for being in violation of the guidelines and limitations on the taxing powers of the LGUs under the LGC, pertinent portion of the said code is quoted as follows: "Section 21. Tax on Business Subject to the Excise, Value-Added or Percentage Taxes under the NIRC . On any of the following businesses and articles of commerce subject to the excise, value-added or percentage tax under the National Internal Revenue Code hereinafter referred to as NIRC, as amended, a tax of FIFTY PERCENT (50%) OF ONE PERCENT (1%) per annum on the gross sales or receipts of the preceding calendar year is hereby imposed: xxx xxx xxx B) On the gross receipts of keepers of garages, cars for rent or hire driven by the lessee, transportation contractors, person who transport passengers or freight for hire, and common carriers by land, air water, except owners of bancas and owners of animal-drawn two-wheel vehicle." This Bureau holds in the highest regard the Supreme Court's authority and wisdom in declaring the aforequoted provision NULL and VOID. However, the Bureau is not vested with the authority to issue a Certificate of Tax Exemption as requested. Further, please be informed that the Bureau in a letter dated 26 November 2007 (copy enclosed), addressed to Attorney Liberato R. Lapia, rendered an opinion addressing a similar issue, pertinent portions of which read as follows: "xxx xxx xxx The above premises considered, it is the view of this Bureau that the above named companies may be considered as transport contractors or common carriers and therefore, exempt from taxes on its gross receipts pursuant to Section 133(j) of the LGC. However, it may be pointed out that said Section is qualified by the phrase "Unless otherwise provided." The qualifying phrase should be interpreted as referring to Section 186 of the code which provides that local government units may exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically enumerated therein. Accordingly, the local government units concerned may impose a tax on tax base other than gross receipts of transportation contractors or common carriers. It is emphasized however, that before any tax, fee, or charge may be collected from a taxpayer, the same must first be levied under a duly-enacted tax ordinance. In the absence of such tax ordinance, there will be no basis for the collection thereof." In view hereof, we regret that the request as stated in the aforesaid letter cannot be given due course. CAIHTE Very truly yours, (SGD.) JOCELYN T. PENDON OIC-Executive Director