B-107007, FEB 27, 1953
Highlights
WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED. THE TAXES WERE PAID BY THE CONTRACTOR UNDER PROTEST AND REIMBURSEMENT THEREOF BY THE UNITED STATES IS CLAIMED PURSUANT TO THE PROVISIONS OF ARTICLE 24 OF THE CONTRACT WHICH PROVIDES. IN YOUR FIFTH INDORSEMENT YOU STATE THERE IS SOME QUESTION AS TO VALIDITY OF THE CONTRACT PROVISIONS RELIED UPON BY THE CONTRACTOR AND THEREFORE AS TO THE PROPRIETY OF PAYMENT OF THE CLAIM IN VIEW OF THE TAX EXEMPTIONS GRANTED IN ARTICLE 5 OF MILITARY BASES AGREEMENT BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE UNITED STATES DATED MARCH 14. THE MATTER OF PROVIDING APPROPRIATE PROCEDURES TO EFFECT THE TAX EXEMPTION GRANTED WAS REFERRED TO THE DEPARTMENT OF STATE FOR CONSIDERATION AND RECOMMENDATION.
B-107007, FEB 27, 1953
PRECIS-UNAVAILABLE
MAJOR C. S. WOLF, F.D., U.S. AIR FORCE:
THERE HAS BEEN RECEIVED BY REFERENCE FROM HEADQUARTERS, DEPARTMENT OF THE AIR FORCE, YOUR FIFTH INDORSEMENT DATED OCTOBER 26, 1951, TRANSMITTING A VOUCHER IN THE AMOUNT OF $15,296.97 STATED IN FAVOR OF C. A. ROXAS AND COMPANY, INC., AS ASSIGNEE FOR V. L. TORRES AND COMPANY, INC., MANILA, UNDER CONTRACT NO. AF64(700)-4, DATED DECEMBER 1, 1950, FOR REHABILITATION OF STOTSENBURG WATER SYSTEM, CLARK AIR FORCE BASE, PAMPANGA PROVINCE, LUZON, P.I., WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED.
THE VOUCHER COVERS IMPORT LICENSE TAX, EXCHANGE TAX AND CONTRACTOR'S FRANCHISE TAX ASSESSED AND COLLECTED BY THE REPUBLIC OF THE PHILIPPINES IN CONNECTION WITH THE PROCUREMENT OF MATERIALS AND SUPPLIES AND PROSECUTION OF THE CONTRACT WORK. THE TAXES WERE PAID BY THE CONTRACTOR UNDER PROTEST AND REIMBURSEMENT THEREOF BY THE UNITED STATES IS CLAIMED PURSUANT TO THE PROVISIONS OF ARTICLE 24 OF THE CONTRACT WHICH PROVIDES, IN SO FAR AS MATERIAL, THAT THE CONTRACT PRICE DOES NOT INCLUDE SUCH TAXES AND THAT A PRICE ADJUSTMENT SHALL BE MADE IF THE CONTRACTOR DOES PAY OR BEAR THE BURDEN OF ANY SUCH TAXES.
IN YOUR FIFTH INDORSEMENT YOU STATE THERE IS SOME QUESTION AS TO VALIDITY OF THE CONTRACT PROVISIONS RELIED UPON BY THE CONTRACTOR AND THEREFORE AS TO THE PROPRIETY OF PAYMENT OF THE CLAIM IN VIEW OF THE TAX EXEMPTIONS GRANTED IN ARTICLE 5 OF MILITARY BASES AGREEMENT BETWEEN THE REPUBLIC OF THE PHILIPPINES AND THE UNITED STATES DATED MARCH 14, 1947. ARTICLE V OF THE BASES AGREEMENT SPECIFICALLY PROVIDES:
"NO IMPORT, EXCISE, CONSUMPTION OR OTHER TAX, DUTY OR IMPOST SHALL BE CHARGED ON MATERIAL, EQUIPMENT, SUPPLIES OR GOODS, INCLUDING FOOD STORES AND CLOTHING, FOR EXCLUSIVE USE IN THE CONSTRUCTION, MAINTENANCE, OPERATION OR DEFENSE OF THE BASES, CONSIGNED TO, OR DESTINED FOR, THE UNITED STATES AUTHORITIES AND CERTIFIED BY THEM TO BE FOR SUCH PURPOSES."
BY OFFICE LETTER DATED JANUARY 10, 1952, THE MATTER OF PROVIDING APPROPRIATE PROCEDURES TO EFFECT THE TAX EXEMPTION GRANTED WAS REFERRED TO THE DEPARTMENT OF STATE FOR CONSIDERATION AND RECOMMENDATION, AND PROPOSALS TO IMPLEMENT THE PROVISIONS OF MILITARY BASES AGREEMENT HAVE BEEN THE SUBJECT OF EXTENSIVE NEGOTIATIONS. THERE HAS NOW BEEN RECEIVED FROM THE AMERICAN EMBASSY IN MANILA THROUGH THE DEPARTMENT OF STATE A REPORT DATED JANUARY 6, 1953, A COPY OF WHICH I AM INFORMED HAS BEEN FURNISHED THE DEPARTMENT OF THE AIR FORCE. IT DISCLOSES THAT PROCEDURES HAVE BEEN AGREED UPON BETWEEN OUR RESPECTIVE GOVERNMENTS SO AS TO ASSURE PROPER EXEMPTIONS FROM THE TAXES IN QUESTION TO MILITARY AGENCIES OF THE UNITED STATES INCLUDING THEIR AUTHORIZED CONTRACTORS OPERATING IN THE PHILIPPINES.
IN VIEW OF THE FOREGOING, IT DOES NOT APPEAR THAT FURTHER CONSIDERATION OF THE MATTER BY THIS OFFICE IS REQUIRED AT THIS TIME AND, THEREFORE, THE MATTER WILL BE CONSIDERED CLOSED.