Bureau of Local Government Finance Opinion

September 5, 2014 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the ICO-Regional Director, Bureau of Local Government Finance-Region III, San Fernando City, Pampanga, the herein 1st Indorsement dated August 13, 2014 relative to the letter dated July 31, 2014 of Ms. Juanita L. Ico, Municipal Treasurer, Calumpit, Bulacan, requesting for an opinion on the computation of Business Tax of Holcim, Philippines, Inc. (HPI). It is alleged that HPI manufactures cement bags in Calumpit, Bulacan but do not have sales office in the said locality. The cement bags manufactured are being used by HPI's cement plant located in Norzagaray, Bulacan. In view thereof, that Office is of the opinion that the Municipality of Calumpit cannot collect Business Tax from HPI since it has no gross sales or receipts generated in their locality due to the fact that the cement bags are used by its cement plant in Norzagaray, Bulacan and are not sold or distributed to the public. Furthermore, said municipality should not have collected business tax based on HPI's Capital Investment considering that Section 143 of the Local Government Code (LGC) of 1991 explicitly provides that business tax shall be based on gross sales or receipts of the preceding calendar year. TIADCc In view hereof, this Bureau concurs with your opinion that HPI is not liable to pay business tax to Calumpit, Bulacan since HPI has no branch or sales outlet in the said locality. Likewise, the basis for collecting business tax is the gross sales or receipts of the preceding year and not the capital investment of HPI. Be guided accordingly. (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director