VAT Ruling No. 025-03

April 8, 2003 VAT RULING NO. 025-03 Section 111 (B) 000-00 First Dominion Prime Holdings, Inc. Suite 1405, East Tower, Philippine Stock Exchange Centre Exchange Road, Ortigas Center, Pasig Metro Manila Attention: Ms. Grace S. Dogillo Asst. Vice President Controller Gentlemen : This refers to your letter dated April 16, 2001, stating that your subsidiary, Clearwater Tuna Corporation (Clearwater, for brevity), is engaged in the manufacture of canned tuna using as raw material fresh tuna fish; that you purchase various species of tuna such as skipjack, yellowfin and bonito; that 100% of your production of canned tuna is being exported to various countries in the world such as U.S.A., Europe and Japan. Based on the foregoing, you are requesting confirmation of your opinion that the raw material (tuna fish) that you use as inputs to your production would qualify to a claim for a presumptive input tax to be utilized as credit or deduction from your output tax liability on local sales. In reply, please be informed that Section 111(B)(1) of the 1997 Tax Code provides that "persons or firms engaged in the processing of sardines, mackerel and milk, and in manufacturing refined sugar and cooking oil, shall be allowed a presumptive input tax, creditable against the output tax, equivalent to one and one-half percent (1 %) of the gross value in money of their purchases of primary agricultural products which are used as inputs to their production." While the law specifically mentioned sardines and mackerel, it is not conclusive that tuna is included in the enumeration. The express mention of one thing in a law, as a general rule, means the exclusion of others not expressly mentioned. CcAITa Accordingly, this Office hereby denies your request that Clearwater is entitled to the presumptive input tax of 1 % pursuant to Section 111(B)(1) of the 1997 Tax Code which can be utilized as credit or deduction from its output tax liability on local sales. Please be guided accordingly. Very truly yours, (SGD.) GUILLERMO L. PARAYNO, JR. Commissioner of Internal Revenue