BIR Ruling

July 15, 1969 MEMORANDUM FOR: The Chief, Business Tax Division This refers to your letter dated May 13, 1969 to the Revenue Operations Head (Legal) requesting clarification and resolution of the question on amusement tax exemption granted the Philippine National Red Cross (PNRC). It appears that in a letter of the Commissioner dated February 10, 1969, the PNRC was granted 100% amusement tax exemption on its sponsorship of a benefit show while in the approved Memorandum for the Commissioner dated May 23, 1969, the PNRC was required to pay 50% amusement tax on any benefit show that it shall sponsor. cdll As gleaned from the many letters of the Commissioner granting exemption, it is now settled that the PNRC is entitled to 100% amusement tax exemption. This is for the reason that the PNRC, being a public corporation created to assist the Republic of the Philippines discharging the obligations set forth in the Geneva Red Cross Convention and to perform such other duties as are incumbent upon the National Red Cross Society" and "a charitable organization operated as an agency of the Republic of the Philippines" does not fall within the scope of Republic Act No. 104. (Opinion No. 42, S. of 1948, Secretary of Justice). The PNRC has no appropriation under the General Appropriation Act but is financed primarily by contributions. That is why under Republic Act No. 95 creating the PNRC it is allowed to solicit voluntary contributions and to conduct fund-raising campaigns which activities are not allowed other government agencies performing governmental functions. The sponsorship by the PNRC of benefit shows is without any limitation. It can sponsor as many benefit shows as it desires. Organizations which are considered government agencies performing similar functions as the PNRC such as the Boy Scouts of the Philippines or Boys' Town are entitled to the 100% amusement tax exemption. However, charitable institutions or associations duly registered with the Securities & Exchange Commission are entitled only to 50% amusement tax exemption. As to the requirements or conditions which must be complied with prior to the grant of exemption, the same are already outlined in the Revised Amusement Tax Regulations, Revenue Regulations No. 14-67 dated May 3, 1967. Be guided accordingly. LibLex (SGD.) MISAEL P. VERA Commissioner of Internal Revenue