BIR Ruling

February 19, 1997 National Housing Authority Quezon Memorial Elliptical Road Diliman, Quezon City Attention: Mr . Jose T . Villanea Manager Estate Management Department Gentlemen : This refers to the protest letter dated May 25, 1992 filed in behalf of the National Housing Authority (NHA) against Assessment No. FAN-1-88-92-002082 involving the amount of P16,431.00 representing deficiency income tax covering the year 1988. The protest is premised on the allegation that the National Housing Authority is exempt from the payment of all fees and taxes of any kind, whether local or national, under Presidential Decree No. 1922 dated May 1984 and Presidential Decree No. 2013 dated January 23, 1986, hence, it is not liable to the assessed deficiency tax. In reply, please be informed that records of this Office show that NHA is in fact exempted from the payment of any kind, whether local or general, assessments, customs duties, exchange tax, building fees and other taxes, fees and charges pursuant to the provisions of P.D. No. 1922 which took effect on May 6, 1984. This tax exemption was however withdrawn on June 11, 1984 under P.D. No. 1931. On January 23, 1986, the tax exemption of NHA was restored under P.D. No. 2013. On January 23, 1987, NHA's tax and duty exemption was again withdrawn under Executive Order No. 93, Section 1 of which expressly provides that: SEC. 1. The provision of any general or special law to the contrary notwithstanding, all tax and duty incentives granted to government and private entities are hereby withdrawn except: 1) those covered by the non-impairment clause of the Constitution; 2) those conferred by effective international agreements to which the Government of the Republic of the Philippines is a signatory; 3) those enjoyed by enterprises registered with i.) the Board of Investment pursuant to P.D. No. 1789 as amended, ii.) the Export Processing Zone Authority pursuant to P.D. No. 66 as amended, iii) the Philippine Veterans Investment Development Corporation Industrial Authority pursuant to P.D. No. 538, as amended, 4) those enjoyed by the Copper Mining Industry pursuant to the provisions of Letter of Instruction No. 1416; cdtech 5) those conferred under the four basic codes namely: i.) the Tariff and Custom Code, as amended; ii.) the National Internal Revenue Code, as amended; iii.) the Local Tax Code, as amended; iv.) the Real Property Tax Code, as amended 6) those approved by the President upon recommendation of the Fiscal Incentives Board Review. Under Section 2 of said E.O. No. 93, the Fiscal Incentives Review Board (F.I.R.B.) may restore the tax and/or duty exemptions withdrawn. Several oral and written requests were made for you to submit evidence showing that your tax exemption was restored by F.I.R.B. It is unfortunate that even up to the present, you failed and/or refused to submit the evidence needed. In lieu of what we required you to submit, you presented a copy of Republic Act 7279, which took effect only on March 29, 1992. It is true that under Section 19 of the said Act, NHA is exempted from the payment of all fees and charges of any kind, whether local and national, such as income and real taxes. It must be emphasized however that we are not assessing NHA of any tax liability after the effectivity of R.A. No. 7279, but for the year 1988 when it was not yet exempted from the payment having been abolished under E.O. No. 93. We cannot make your tax exemption under R.A. No. 7279 cover the year 1988 for under our jurisdiction, tax laws always applied prospectively, unless legislative intent to make it retroactive is distinctly expressed or necessarily implied and this is not so provided in the said law. Be that as it may we find no reason at all to disturb the finding that you are liable to the assessed deficiency income tax for the year 1988. In view thereof, your protest has to be as it is hereby denied. Consequently, you are hereby requested to pay the amount of P16,431.00 as deficiency income tax for the year 1988 to the Revenue District Office nearest your place of business, within fifteen (15) days from your receipt hereof, in order that this case may be closed and terminated. aisadc Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue