24.Taxes on Natural Resources
Minerals, mineral products, and quarry resources extracted or produced from mineral lands are subject to excise tax of 1%-2% of market value of the gross output of minerals. In the case of metallic minerals, these rates apply on a graduated basis depending on the schedule provided by law.
Forest charges at varying rates are imposed on each cubic meter
of timber and firewood cut in any forest land. A charge of 10% is also imposed on any person removing certain forest products, such as gums, resins, and rattan. These forest charges are payable to the Forest Management Bureau. Entities operating under a gratuitous license of the Bureau of Forest Development may be exempt from paying these forest charges.
Indigenous petroleum is subject to a 15% tax based on the fair
international market price on the first taxable sale, payable by the purchaser to the Bureau of Internal Revenue.
25.Other Taxes
Customs Duties. Customs duties on imports computed on the basis of the value of the imported goods range from 3% to 100%. The dutiable base is the transaction value of the imported goods.
Land and Property Tax. Owners of land (and improvements hereon) and buildings are required to pay real estate taxes to the province, city, or municipality in which the property is located. The rate (maximum 2%) is based on the assessed value of the property and varies slightly with the locality.
Excise Tax. Excise tax is imposed on certain specific articles
enumerated in the Tax Code. The commodities subject to excise tax are distilled spirits, wines, fermented liquors, manufactured tobacco, cigars, cigarettes, fireworks, manufactured oils and motor fuels, coal and coke, bunker fuel oil, diesel fuel oil, cinematographic films,
saccharine, automobiles, nonessential goods (such as jewelry, perfumes and toilet water, and yachts and other vessels intended for pleasure or sports), and mineral products including coal and indigenous petroleum.
Excise tax is levied on these articles whether they are produced locally for domestic sale or imported.
Gross Receipts Tax. On specific business activities, a percentage or miscellaneous tax is imposed based on the gross receipts of the business. The following are illustrative examples of percentage or miscellaneous taxes:
Type of Business Tax Rates
Banks and finance companies From 0%?% of gross receipts, varying with terms of instruments from which income is derived Mining companies 2% of market value of the gross output of nonmetallic minerals and quarry resources 1%?% of market value of the annual gross output of a all metallic minerals, ending on the schedule provided by law 15% of the fair international market price of indigenous petroleum products
Franchises on electric, gas, and 2% on gross receipts water utilities
Common carriers by air, sea, or 3% of gross receipts
land for the transport of passengers
__________
Note:
The tax on mining companies is no longer collectible by the Bureau of Internal Revenue but by the municipality where the mining claim is located.
COMPUTATION OF TAXABLE INCOME
26.Capital Gains
The net capital gain is the difference between the adjusted cost basis of the property sold and the selling price. In the case of an individual, except gains from the sale of real properties considered as capital asset and shares of stock, only 50% of long-term capital gains is taken into account. Capital losses can offset only capital gains.
There is no capital loss carryforward or carryback.
27.Depreciation and Depletion
Any method of depreciation is allowed as long as it is reasonable and consistent. Once a particular method is adopted, subsequent changes require the prior approval of the Commissioner of Internal Revenue. depreciation Guidelines and Rules,?published by the U.S. Internal Revenue Service (Revenue Procedure No. 62-21, Publication No. 456, August 1964) prescribing the estimated useful life of depreciable assets, has persuasive effect in the Philippines. A written agreement
may be entered into between the taxpayer and the Commissioner of Internal Revenue as to the useful life of the property subject to depreciation.
Only cost depletion is allowed.
28.Treatment of Dividends
Gross dividends received by a domestic corporation or a resident foreign corporation from another domestic corporation are exempt from income tax. For dividends received by a nonresident foreign corporation from a domestic corporations, see item 17.
Dividends from all sources received by citizens of the Philippines and resident alien individuals are not subject to income tax. Dividends received by no
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