QuestionsQuestions (LTO MEMORANDUM)
It was based on Section 109(2) and related rules under Republic Act No. 7716, and implemented through Revenue Regulation No. 7-95.
They were exempted from payment of common carrier’s tax, value-added tax (VAT), and percentage tax, subject to the income thresholds stated in the memorandum.
Income below P550,000.00 per Section 109(2) qualifies for exemption from common carrier’s tax/VAT.
Income below P100,000.00 qualifies for exemption from percentage tax.
It states that the BIR exemption provisions are “requirements for the registration of tricycles,” implying that proof of exemption is needed for registration purposes.
A BIR certificate of exemption shall be required in lieu of the proof of payment of common carrier’s tax/VAT or percentage tax for tricycle registration.
Because it substitutes for the requirement to present proof of tax payment; thus, eligible operators must submit the certificate to complete registration.
The memorandum implies strict compliance is required; without the BIR certificate of exemption (or the appropriate substituted proof), registration requirements may not be satisfied.
It indicates that the exemption thresholds and requirements are implemented or clarified by the BIR through Revenue Regulations, giving the regulation the effect of operational guidance for compliance.
Example approach: determine whether the operator’s income is below P550,000.00 (for common carrier/VAT exemption) and/or below P100,000.00 (for percentage tax exemption), then conclude what certificate is needed for registration.
It instructs LTO personnel and applicants to follow the stated documentary requirement (submission of the BIR certificate of exemption) strictly when processing tricycle registrations.
The BIR establishes the substantive tax exemption under RA 7716 and its implementing regulations; the LTO memorandum translates that exemption into a registration documentary requirement for tricycles.