DOJ Opinion No. 137, s. 1982

DOJ OPINION NO. 137 , s. 1982 July 7, 1982 Dep. Min. E.L. Tordesillas Vice-Chairman Board of Investments Makati, Metro Manila Sir : This has reference to your request for opinion in connection with the availment of incentives under Presidential Decree No. 218, as amended, entitled "Prescribing Incentives for the Establishment of Regional or Area Headquarters of Multinational Companies in the Philippines." The query is raised in connection with the request of a multinational company which has established regional headquarters pursuant to said decree, for exemption from the payment of taxes and duties on its importation of standard door hardware pursuant to the provisions of Section 7 of P.D. No. 218, as amended, which reads: "Section 7. The regional or area headquarters of multinational companies shall be exempt from all forms of local licenses, fees, dues, imposts or any other local taxes or burdens." We concur with the view of the Board of Investments that the above-quoted provision does not contemplate exemption from the payment of national taxes/burdens, like taxes and duties on importations made by regional headquarters. The term "local taxes" is used to distinguish said taxes, from taxation which is general, and for the whole state. (25-A Words and Phrases, at p. 250) Thus, the Local Tax Code (P.D. No. 231) refers to taxes imposed by local government units, as distinguished from the national taxes and other impositions levied by the national government. It is in this context that the term "local licenses, fees, dues, imposts or any other local taxes or burdens" is used in Section 7, above-quoted. This conclusion is bolstered by a reading of the other provisions of the decree, which grant special tax treatment to multinational companies establishing regional or area headquarters in the Philippines, with respect to particular taxes imposed by the National Internal Revenue Code, e.g. income tax on aliens employed by the said headquarters, (Sec. 2, amending Sec. 22 of Commonwealth Act No. 466, as amended; Section 4) tax on foreign corporations (Sec. 3, amending Sec. 24(b) (1) of Com. Act No. 466, as amended), contractor's tax (Sec. 5, amending Sec. 191 of Com. Act No. 466, as amended), and to duties imposed under the Tariff and Customs Code (Sec. 6). The enumeration of the tax provisions under the Internal Revenue Code and The Tariff and Customs Code, both of which impose national taxes which are made specially applicable to the regional or area headquarters and their employees, leads to the conclusion that no other exemptions are intended, under the familiar principle of "exclusio unius est exclusio alterius". Had the statute intended the exemption from local taxes to be given an extended meaning to embrace even national taxes, like import duties imposed by national legislation on importations of hardware, it would not have employed the phrase "local taxes" in Section 7, nor would it have enumerated certain exemptions from specific provisions of the internal revenue and customs laws. LexLib Please be guided accordingly. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice