BIR Ruling

August 13, 1975 The Secretary Provincial Board Bayombong, Nueva Vizcaya S i r : This refers to Resolution No. 111, dated October 25, 1974 of the Provincial Board of Nueva Vizcaya, urgently appealing to the President of the Republic of the Philippines to increase the personal exemptions to make it more realistic and in conformity with the prevailing high cost of living and the steadily increasing prices of essential commodities, which was referred by the Office of the President to this Office, for appropriate action. In reply, I have the honor to inform you that while the clamour for increased personal and additional exemptions seems to find merit in the light of increasing cost of living, nevertheless, this Office is not inclined to recommend for the present any increase in the amount of statutory exemptions in view of the following reasons: 1. Out of over 4 million income tax return filers, only about 600 thousand are filing taxable returns. Any increase in exemptions will further erode the tax base. 2. The income tax is a direct tax. By paying it, the taxpayer establishes his link with the government, and he can rightfully say that he assumes his proper share of the tax burden as a bona fide stockholder of the New Society. To increase the amount of exemptions would be to reduce the number of direct supporters of the government, a result that is not conducive to the promotion of discipline, nationalism and love of country. 3. To give in to the clamour for increased exemptions would set back by decades our tax consciousness campaign, whose main thrust has been to inculcate in the minds of taxpayers the value and significance of taxes to the economy, and the importance of maximum voluntary compliance by taxpayers with their tax obligations. Very truly yours, (SGD.) CONRADO P. DIAZ Acting Commissioner of Internal Revenue TAN 1182-568-4