BIR Ruling

October 4, 1971 Mr. Jose R. Espina Airport General Manager Mactan International Airport Lapu-Lapu City S i r : This refers to your letter dated April 1, 1971, which was referred to this Office by our Regional Director of that City, requesting opinion on the feasibility of providing the transit area at Mactan International Airport with a tax free store for native crafts by local producers. In reply, I have the honor to inform you that tourist shops in the pre-departure are of the Mactan International Airport cannot be granted tax exemption on their sales to tourist pursuant to Section 188(e) of the Tax Code, as amended. However, said tourist shops may be granted tax exemption under Section 8(c) of Republic Act No. 1478, otherwise known as the Bureau of Travel and Tourist Industry Law, to quote: "SEC. 8. For the purpose of strengthening the competitive position of the Philippines in the field of International Tourism, the President of the Philippines, upon recommendation of the Board, may: (c) Allow foreign visitors, and travelers leaving the country to carry with them or have mailed or shipped for them within sixty days of their departure free of export licenses, taxes or fees, any quantity of locally purchased Philippine souvenir or gift goods when the value thereof shall not exceed one thousand pesos." Under the foregoing provision, said purchases by these tourist at the tourist shops in the pre-departure are may be exempted from the taxes, licenses or fees if the same is recommended by the Board of Travel and Tourist Industry to the President of the Philippines. In such case all purchases of Philippine souvenir or gift goods the value of which do not exceed one thousand pesos is exempt from taxes. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue