DOJ Opinion No. 027, s. 1985

DOJ OPINION NO. 027 , s. 1985 February 27, 1985 Director General Lemuel M. Miravalles National Manpower and Youth Council (NMYC)Complex, South Superhighway Taguig, Metro Manila Sir : This refers to your request for legal opinion on the feasibility of the proposed amendment of Article 52 of the Labor Code of the Philippines, as amended, to read as follows: "ART. 52. Incentive Scheme . An additional deduction from taxable income of one-half of the value of labor training expenses incurred for development programs shall be granted to the person or enterprise concerned provided that such development programs, other than apprenticeship, are approved by the Council and the deduction does not exceed ten percent of [direct labor wage] salaries and wages . There shall be a review of the said scheme two years after its implementation." (Emphasis supplied) The proposed amendment seeks to delete the phrase " direct labor wage " and substitute "salaries and wages" in the first paragraph. You mention that the purpose of the proposal is to broaden the sectoral coverage of the tax incentive scheme so as to include businesses engaged in rendering services, e.g. banks, building and loan associations, insurance and financing companies, stock brokerage houses, educational institutions, consultancy groups and other business endeavors not involving direct labor in the production of goods and services. We do not see any legal impediment to the proposal, considering the effect that the proposed amendment would have on our national revenue collections and the fact that the implementation of the tax incentive scheme is ultimately a matter for the tax authorities, we would suggest that the matter be discussed with the Bureau of Internal Revenue and/or the NEDA. Very truly yours, (SGD.) ESTELITO P. MENDOZA Minister of Justice