BIR Ruling

April 17, 1975 Dr. Jose P. Caedo President Philippine Hospital Association GSIS General Hospital East Ave., Quezon City S i r : In connection with the case of Lahoz Clinic & Hospital of Vigan, Ilocos Sur, I have the honor to inform you that per letter of Dr. Antonio R. Lahoz, Director of the aforesaid clinic dated February 12, 1975 to the Regional Director, Revenue Region No. 1, Dr. Lahoz said, among others: "I would like to state that the Pharmacy of the Lahoz Clinic and Hospital is selling medicines to our out-patients and occasionally to others who cannot find the medicines needed available in any drugstore." cdt From the foregoing, it is apparent that the pharmacy sells medicine to the general public and not exclusively to their patients as reported to you. And since it does not appear that the Lahoz Clinic and Hospital is a non-profit and charitable entity giving medical assistance to destitute persons, it is not exempt from the payment of the privilege tax imposed for owners or proprietors of drug stores. Accordingly, the actuation of our revenue officers in Ilocos Sur is requiring the Lahoz Clinic and Hospital to pay the privilege tax on the sales of medicine effected by its Pharmacy is well founded. It may further be stated that the opinion of the Municipal treasurer as stated in your letter dated March 29, 1974 to the effect "that a hospital pharmacy is part and parcel of a hospital so should not be taxed" has no legal basis. Very truly yours, (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN-1601-593-5