Bureau of Local Government Finance Opinion

August 24, 1993 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Napoleon G. Co President/General Manager COHACO Trading Corporation 250 Ibuna Street, Barrio Onse San Juan, Metro Manila S i r : This refers to your letter dated June 30, 1993 requesting clarification on the computation of the tax on retirement of business relative to the alleged transfer of your company from San Juan to the municipality of Malabon. It is represented in your letter that company business operation at San Juan stopped on Dec. 31, 1992 having transferred to your newly acquired property at Malabon where a new business license was allegedly secured. However, upon referral by this Bureau of your letter to the Municipal Treasurer of San Juan, the said treasurer under 2nd Indorsement dated July 28, 1993 alleged in said indorsement that the bookkeeper of your company visited the treasurer's office before January 20, 1993 and requested assessment of the business taxes and licenses for the 1st quarter of 1993. The company was thus assessed, as a retailer, and, on January 22, 1993 a letter was received from the company requesting that the assessment be revised claiming that it should be classified as a wholesaler of essential and non-essential commodities. After the revision of the assessment of the tax obligation as requested, still no payment was made. It is also alleged that on June 21, 1993, the said bookkeeper verbally informed the Municipal Treasurer that the business is due for retirement. Hence, it was instructed that all requirements be accomplished. However, the application for retirement of business was never filed. The Municipal Treasurer further alleged that considering the personal request made by your bookkeeper for assessment before January 20, 1993 and the request under letter dated January 22, 1993, the said business has not yet actually transferred and/or retired. In view of the foregoing, your business may not be considered as having not formally transferred and/or returned from the municipality of San Juan. A business to legally transfer to some other place, tax obligations must all be settled pursuant to Section 145 of the Local Government Code (LGC) of 1991 (R.A. No. 7160), as implemented by Article 241 of the Implementing Rules and Regulations (IRR). Considering that the tax due is for the year 1993, inasmuch as the application for retirement was not filed on or before January 20, 1993, the computation of taxes based on the 1992 sales shall be levied under 1993 tax rates of the municipality of San Juan where, it appears, your company continued to actually operate during the year 1992. aisa dc The Municipal Treasurer of San Juan in a separate letter of even date is furnished a copy of this communication for her guidance. However, she is also being instructed to verify from the Municipal Treasurer of Malabon if your company has indeed secured a permit and the date the company started its business thereat in order that adjustments could be made in the computation of the taxes your company is liable for. We hope this clarifies matters. Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director