Bureau of Local Government Finance Opinion

September 6, 1993 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2ND ENDORSEMENT Respectfully returned to the Municipal Treasurer, Paraaque, Metro Manila. This refers to the letter of Mr. Antonio B. Yao, Vice-President Operations of La Suerte Cigar Cigarette Factory (LSCCF) requesting tax credit in the amount of P2,411,603.29 resulting from the overpayment of business tax in view of the inclusion of excise tax on the gross sales/receipts of LSCCF. Section 1(n) of Ordinance No. 137, of that municipality provides as follows: Sec. 1. Definition of terms . . . . "(n) Gross Sales or Receipts include the total amount of money or its equivalent representing the contract price, compensation or service fee, including the amount charged or materials supplied with the services and deposits or advance payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person excluding discounts if determinable at the time of sales, sales return, excise tax, and value added tax (VAT); (Underlining supplied). xxx xxx xxx In view of the abovequoted provisions and if in the computation of the tax paid by said company, the excise tax was included, the herein claim should be considered meritorious and the tax credit requested should be granted. For the purpose, Art. 286 of the Implementing Rules and Regulations (IRR) of the Local Government Code of 1991 (R.A. 7160), is quoted hereunder: "Art. 286. Claim for Refund or Tax Credit . . . . "The tax credit granted a taxpayer shall not be refundable in cash but the same taxpayer for the same business. If a taxpayer has paid in full the tax due for the entire year and he shall have no other tax obligation payable to the LGU concerned during the year, his tax credits, if any, shall be applied in full during the first quarter of the next calendar year on the tax due from him for the same business of said calendar year. cd xxx xxx xxx Accordingly, that Office may, in consultation with LSCCF, program such payments in the form of tax credit to be applied to future business tax obligations of the said company. By authority of the Secretary: (SGD.) LORINDA M. CARLOS Executive Director Bureau of Local Government Finance