BIR Ruling [DA-391-04]

July 20, 2004 BIR RULING [DA-391-04] RR 2-98; 099-99; 018-2000 Commission on Audit Commonwealth Avenue Quezon City Attention: Ms. Lourdes B. Dimapilis Assistant Commissioner Finance Gentlemen : This refers to your letter dated January 12, 2004 requesting for exemption from the payment of taxes, fees, charges of any kind pursuant to Section 2.57.5-A of Revenue Regulations No. 2-98 implementing Republic Act No. 8424 in connection with the operation of the elevator installed in the Commission. In reply, please be informed that the term "National Government" refers only to the Central Government consisting of the legislative, executive and judicial departments of the government, as distinguished from the local governments and other governmental entities and is not synonymous, therefore, with the terms "the Government of the Republic of the Philippines" or "Philippine Government" which are the expression broad enough to include not only the central government but also the provincial and municipal governments, chartered cities and other government-controlled corporations or agencies, like Central Bank." ( Central Bank of the Philippines vs. Court of Appeals and Ablaza Construction & Finance Corporation , Gr. No. L-33022, April 22, 1975; BIR Ruling No. 018-2000 dated January 20, 2000 ) Thus, having been created under the 1973 Constitution, the Commission on Audit is considered part of the National Government. As such, Section 2.57.2(A) provides, viz : "Sec. 2.57.5. Exemption from withholding The withholding of creditable withholding tax prescribed in these Regulations shall not apply to income payments made to the following: (A) National government and its instrumentalities, including provincial, city or municipal governments;" In view thereof, the withholding of creditable withholding tax shall not apply to income payments made to the National Government and its instrumentalities, including provincial, city or municipal governments, the Commission on Audit included. ( BIR Ruling No. 099-00 dated July 9, 1999 ) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it shall 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.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group