BIR Ruling [DA-218-03]

July 9, 2003 BIR RULING [DA-218-03] 57 129-99 Employees of City Waterworks Department San Carlos City Negros Occidental Attention: Mr. Henry C. Vergara Gentlemen : This refers to your letter dated August 9, 2001 jointly signed by the employees of City Waterworks Department of San Carlos City and referred to this Office by Senior Deputy Executive Secretary Waldo Q. Flores of the Office of the President requesting for the deferment/suspension of the withholding tax on compensation of the 5% salary increase of government employees until the end of calendar year 2001. In reply, we regret to inform you that as of this date, no law or regulation has been passed deferring or suspending the collection of withholding tax on compensation of the salary increase of government employees. This Office takes due notice of the plight of ordinary government employees and sympathizes with their predicament. However, tax exemptions are highly disfavored in law and are construed in strictissimi juris against the taxpayer. He who claims an exemption must be able to justify his claim by the clearest grant of organic law or statute. CSHDTE For this reason, our hands are tied and we are therefore constrained to deny your request for the deferment/suspension of the withholding tax on compensation of the 5% salary increase of government employees until the end of calendar year 2001 for lack of legal basis. This constitute our final stand on the matter. Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal & Inspection Group