BIR Ruling

January 25, 1973 The Provincial Governor of Capiz Roxas City S i r : This refers to the letter dated October 20, 1972 of Mr. Salvador S. Sevilla, Assistant to the Speaker, House of Representatives, requesting information whether the donations of the Asturias Sugar Central to the Provincial Government of Capiz to be used to defray actual expenses in the construction of government projects are deductible from the gross income of the former for income tax purposes. In reply, I have the honor to inform you that under Section 30(h) of the Tax Code, contributions or gifts actually paid or made to or for the use of the Government of the Philippines or any political subdivision thereof exclusively for public purposes are deductible to an amount not in excess of 3% of a taxpayer-corporation's taxable net income as computed without the benefit of said section. Accordingly, since the donation of the Asturias Sugar Central to the Provincial Government of Capiz are to be used by the latter exclusively for public purposes, the same are deductible for income tax purposes, subject to the limitations provided in Section 30(h) of the Tax Code. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue