BIR Ruling [DA-244-01]

November 26, 2001 BIR RULING [DA-244-01] Mr . Jaime Santiago Regional Director Revenue Region No. 14 Government Center Palo, Leyte S i r : This refers to your fax letter dated April 5, 2000 requesting for a ruling on whether Republic Act (R.A.) No. 8424 has repealed Section 71 and 77 of Republic Act (R.A.) No. 6975 exemption from income tax certain benefits accorded to the members of the Philippine National Police (PNP). You stated that Section 391 of the Tax Code of 1997 provides, viz: "SEC. 291. In General . All laws, decrees, executive orders, rules and regulations or part thereof which are contrary to or inconsistent with this Code are hereby repealed, amended or modified accordingly." that with the implementation of Republic Act No. 8424, otherwise known as the Tax Reform Act of 1997, it is your opinion that Republic Act No. 6975, otherwise known as an Act Establishing the Philippine National Police under a recognized Department of the Interior and Local Government of 1990 is deemed repealed by the above-cited repealing clause; that your interpretation is based on the time-honoured principle that tax exemption should be strictly construed, as cited by the Supreme Court in the cases of House vs. Posadas, 53 Phil 338; Asiatic Petroleum Co. vs. Llanes, Phil. 446; and Surigao Consolidated Mining Co., Inc. vs. CIR, 9 SCRA 728; that accordingly, the PNP personnel shall only enjoy exemption of the fringe benefits but not exceeding P30,000.00. In reply thereto, please be informed that your query is answered in the negative R.A. No. 6975, more particularly Sections 71 and 77 thereof, exemption from income tax certain benefits accorded to the uniformed personnel of the PNP as defined in the Act remains enforced despite the passage of R.A. No. 8424 because of the cardinal rule in statutory construction that a special statute applicable to a particular case is not repealed by a later statute which is general in its terms, provisions or application even if the terms of the general act are broad enough to include the cases in the special law unless there is a manifest intent to repeal or alter the special law. Accordingly, certain benefits enjoyed by the uniformed members of the PNP, such as quarters allowance, clothing allowance, cost of living allowance, hazard pay and longevity pay are exempt from income tax. (BIR Ruling No. 62-2000 dated November 20, 2000) CDAHIT 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 null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) MILAGROS V. REGALADO Acting Assistant Commissioner Legal Service