Enforcement of Section 259 of the Tax Code, as amended by Republic Act No. 6110

March 8, 1971 REVENUE MEMORANDUM CIRCULAR NO. 08-71 SUBJECT : Enforcement of Section 259 of the Tax Code, as amended by Republic Act No. 6110 TO : All Internal Revenue Officers and others concerned The attention of all concerned is invited to the following provisions of Section 259 of the Tax Code, as amended by Republic Act No. 6110. "SEC. 259. Tax on Franchises . There shall be collected in respect to all franchises, upon the gross receipts from the business covered by the law granting the franchise, a tax of five per centum or such taxes, charges, and percentages as are specified in the special charters of the grantees upon whom such franchises are conferred, whichever is higher, unless the provisions thereof preclude the imposition of a higher tax. For the purpose of facilitating the assessment of this tax, reports shall be made by the respective holders of the franchises in such form and at such times, as shall be required by the regulations of the Department of Finance. "The taxes, charges, and percentages on franchises, shall be assessed, collected by and paid to the Commissioner of Internal Revenue or any of his collection agents, any provision in the franchise to the contrary notwithstanding, and shall be due and payable as specified in the particular franchise, or, in case no time limit is specified in the particular franchise, or, in case no time limit is specified therein, the provisions of Section one hundred eighty-three shall apply; and if such taxes, charges, and percentage remain unpaid on the date on which they must be paid, twenty-five per centum shall be added to the amount of such taxes, charges, and percentages, which increase shall form part of the tax". Before the amendment by Republic Act No. 6110, the law was silent as to the official charged with the assessment and collection of franchise taxes. For this reason, franchise holders pay said taxes to the officials designated in their respective franchises. With the amendment by Republic Act No. 6110, franchise taxes shall be assessed, collected by and paid to the Commissioner of Internal Revenue or any of his collection agents, notwithstanding any provision of the franchise designating another official to whom payment shall be made. Franchise holders who should pay the franchise taxes to the Commissioner of Internal Revenue or any of his collection agents include not only those required to pay the regular rate of 5% but also those required to pay the franchise tax at such other rates prescribed in their respective franchises. Internal Revenue officers are therefore, urged to notify the franchise holders in their respective jurisdiction on the contents of this circular. cdt MISAEL P. VERA Commissioner of Internal Revenue Approved: PEDRO M. ALMANZOR Acting Secretary of Finance ANNEX A 1st Indorsement April 21, 1971 Respectfully returned to the Commissioner of Internal Revenue, Manila, duly approved, Revenue Memorandum Circular No. 8-71, dated March 8, 1971, relative to the enforcement of Section 259 of the Tax Code, as amended by Republic Act No. 6110, which now entrusts to the Commissioner of Internal Revenue or any of his collection agents the assessment and collection of the "taxes, charges and percentages on franchises." PEDRO M. ALMANZOR Acting Secretary ANNEX B March 16, 1971 The Honorable The Secretary of Finance Manila S i r : I have the honor to forward herewith Revenue Memorandum Circular No. 8-71, dated March 8, 1971, for approval. cdt Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue