BIR Ruling [DA-016-01]

February 12, 2001 BIR RULING [DA-016-01] 24; 53-98 Pangkalahatang Lakas ng mga Tribu sa Palawan No. 20 Baltan Street Puerto Princesa City Attention: Mr . Al-Razid T . Badidil Acting Board Secretary Gentlemen : This refers to the resolution of your Board of Directors dated July 1, 2000 requesting for exemption from payment of income tax on your Raffle Promo 2000. It is represented that Pangkalahatang Lakas ng mga Tribu sa Palawan is a non-stock, non-profit organization of more than one hundred tribal organizations in the entire province of Palawan; that it is spearheading a Raffle Promo 2000 to be drawn on December 23, 2000; that the proceeds of the said project will be for the construction of the provincial tribal hall of the Pangkalahatang Lakas ng mga Tribu sa Palawan; and that prizes include the following: 1st Prize one (1) Sarao Jeep (14-seater) 2nd Prize one (1) Multi-cab Diesel 3rd Prize one (1) Yamaha Tricycle RS 100 4th Prize one (1) Yamaha Motorcycle Sports 125cc 5th Prize one (1) Motorcycle Yamaha RS 100 6th Prize five (5) units refrigerator (5 cu. ft.) 7th Prize five (5) units 14" TV sets 8th Prize five (5) units Karaoke 9th Prize five (5) units VHS 10th Prize fifty (50) units Bike Consolation Prizes 100 sacks of rice In reply, please be informed that Section 2.57-1 of Revenue Regulations No. 2-98 implementing Section 24(A) of the Tax Code of 1997 provides that: "Sec. 2.57-1 Income Payments Subject to Final Withholding Tax . The following forms of income shall be subject to final withholding tax at the rates herein specified; (A) Income payments to a citizen or to a resident alien individual ; (1) . . . prizes (except prizes amounting to ten thousand pesos (P10,000) or less which shall be subject to tax under Section 24 (A) of the Code) and other winnings (except Philippine Charity Sweepstakes winnings and Lotto winnings), derived from sources within the Philippines Twenty percent (20%)." In view of the foregoing, the prizes which are more than P10,000.00 shall be subject to the 20% final withholding tax whereas the prizes amounting to P10,000.00 or less shall be subject to tax under Section 24(A) of the Tax Code of 1997. (BIR Ruling No. 53-98 dated May 8, 1998) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue (SGD.) LILIAN B. HEFTI Deputy Commissioner Legal & Inspection Group