DOJ Opinion No. 126, s. 1995

DOJ OPINION NO. 126 , s. 1995 December 6, 1995 Mr. Eduardo S. Mendiola Officer-In-Charge Bureau of Treasury Intramuros, Manila Sir : This has reference to your request for opinion concerning the Shipyard Development Fund (SDF) of the PNOC Dockyard and Engineering Corporation (PDEC), which is deposited with the Philippine National Bank (PNB) pursuant to Presidential Decree No. 666 ("Providing For Incentives To The Shipbuilding and Ship Repair Industry"). The pertinent provisions of P.D. No. 666 reads: "SECTION 1. Shipbuilding and ship repair yards duly registered with the Maritime Industry Authority shall be entitled to the following incentive benefits: xxx xxx xxx c) Exemption from contractor's percentage tax . The gross receipt derived by shipbuilders and ship repairers from shipbuilding and ship repairing activities shall be exempt from the Contractor 's Tax provided in Section 91 of the National Internal Revenue Code during the first ten years from registration with the Maritime Industry Authority, provided that such registration is effected not later than the year 1990; Provided , That any or all amounts which would otherwise have been paid as contractor's tax shall be set aside as a separate fund, to be known as " Shipyard Development Fund ", by the contractor for the purpose of expansion, modernization and/or improvement of the contractor's own shipbuilding or ship repairing facilities; Provided , That, for this purpose the contractor shall submit an annual statement of its receipts to the Maritime Industry Authority; and Provided , further , That any disbursements from such fund for any of the purposes hereinabove stated shall be subject to approval by the Maritime Industry Authority. xxx xxx xxx" You state that under the aforequoted provision, any and all amounts which would otherwise have been paid as contractor's tax shall be set aside as a separate fund, to be known as "Shipyard Development Fund" (SDF), by the contractor for the purpose of expansion, modernization and/or improvement of the contractor's own shipbuilding and ship repairing facilities, among others; that in this connection, PDEC is requesting authority from your office to withdraw its remaining balance of the said Fund with PNB in view of the winding up of its operations as a prelude to dissolution; and that since the subject provision is silent on the disposition of the SDF, your office believes that the remaining balance of PDEC's SDF should be forfeited in favor of the national government. With regret, we cannot, with propriety, render the desired opinion for the following reasons: 1. Under Section 2 of P.D. No. 666, it is the Maritime Industry Authority (MARINA), in consultation with the Board of Investments and the Department of Finance, which is mandated to promulgate rules and regulations together with the procedures and guidelines for the proper implementation of the provisions of P.D. No. 666. By established policy and precedents, the Secretary of Justice has consistently refrained from expressing his views on matters which, by provision of law, fall within the authority of another office or agency, particularly where he possesses no revisory authority over the said office or agency, unless such opinion is requested by said office or agency itself (Sec. of Justice Opns. No. 46, s. 1981; No. 149, s. 1976). 2. Section 1 of P.D. No. 666 is already repealed by express provision of Section 20 of Batas Pambansa Blg. 391 and relative to this, Section 21 of the same B.P. Blg. 391 provides that: "SEC. 21. The provisions of the preceding section notwithstanding, existing enterprises which are enjoying the incentives under the laws repealed by this Act shall continue to enjoy such incentives for the period therein stated: Provided, however , That they may waive such incentives and opt to be governed by the provisions of this Act, in which event, their period of availment of the incentives herein provided shall be reckoned from the original date of their entitlement to the incentives under the said laws." In the instant case, it is not stated whether PDEC has exercised the waiver and/or availed itself of the option referred to in the aforequoted provision. Moreover, it is noted that the Fiscal Incentives Review Board in its Resolution No. 3-86 subsequently restored the tax and duty exemption privileges of existing firms registered with MARINA under P.D. No. 666 and we cannot appreciate the legal implication thereof vis-a-vis B.P. Blg. 391 and on the instant request of PDEC for want of relevant details. Pursuant to settled policy, the Secretary of Justice likewise does not pass upon questions the resolution of which hinges upon factual issues which are not readily discernible from the query (id., Nos. 19, 207, 208, s. 1989; Nos. 113, 117, 158, s. 1988, etc.). We suggest that you consult the Maritime Industry Authority on the matter since it is the government agency authorized to implement P.D. No. 666. Very truly yours, (SGD.) TEOFISTO T. GUINGONA, JR. Secretary