BIR Ruling

June 28, 1972 Dr. Pacifico E. Marcos Chairman Philippine Medical Care Commission P. O. Box No. 2, Quezon City S i r : This refers to your letter dated March 28, 1972 requesting legal opinion as to whether the donations given to Philippine Medical Care Commission for medical scholarships as envisioned in its project, are deductible from the gross income of the donors. You represented in your letter that the Philippine Medical Care Commission (hereinafter referred to as the Commission), in its move to alleviate and eventually solve the problem of lack of medical practitioners in the rural areas, launched a "Medical Scholarship for The Rural Areas" campaign; that the scholars chosen to enjoy the medical scholarship will be under contract for a certain number of years which they will devote to practice in certain areas specified by the Commission; that to augment the resources of government which could be devoted for such purpose, your group is seriously considering the proposals of several private entities who have offered to underwrite some of these medical scholarships or donate certain sums of money to the Commission to be used for this particular purpose; that by way of providing a measure of public recognition of the civic spirit of the citizens who will donate to the medical scholarship program, as well as provide you with some incentives which you could offer to prospective donors, you would like to be advised on the possibility of exempting these donations from the donor's income taxes. In reply, I have the honor to inform you that it appearing, that the donations are to be given to the Commission, a political subdivision of the government and are to be used for exclusively public purpose, that of increasing medical practitioners in the rural areas, said donations are deductible from the gross income of the donor's, but subject to the limitations provided for in Section 30(h) of the Tax Code, which allows the deduction of such donations only to the extent of 6%, in the case of an individual and 3%, in the case of a corporation, of the taxpayer's taxable net income as computed without the benefit of paragraph (h) of said Section 30. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue