Dante Company is a hotel company registered as a local economic enterprise (LEE") of the City of Dapitan. The company is asserting that, as an LEE owned and operated by a local government unit (LGU"), it should no longer be required to pay income taxes to the BIR. It argues that all revenues collected by it must accrue exclusively to the city government of Dapitan. Is the company correct?*

a.) Yes. Since the company is owned by an LGU which itself is exempt from taxes imposed by the Tax Code, the same privileges must also be accorded to it.

b.) Yes. Under Section 18 of the Local Government Code, LGUs are authorized to generate their own sources of revenues, and the allocation of the same shall accrue exclusively to them.

c.) No. The company is not one of those corporations exempt from taxes under Section 30 of the Tax Code or under any special laws. Besides, the acts of an LGU in its corporate capacity and for the purpose of economic gain may be subject to tax just like any other private or government corporation.

d.) None of the above.