BIR Ruling [DA-433-03]

December 1, 2003 BIR RULING [DA-433-03] Mina De Oro Agrarian Reform Beneficiaries Multi-Purpose Cooperative (MAREBEMCO) Mina De Oro, Bongabong, Oriental Mindoro Attention: Mr. Manuel N. Portugal Chairman Gentlemen : This refers to your letter dated October 12, 2003 requesting for exemption from payment of income tax of the proceeds that you will derive from your raffle project which will be held on December 2004. It is represented that MAREBEMCO is an agricultural cooperative duly registered with the Cooperative Development Authority under CDA Registration No. LGA-1763 dated September 30, 1994; that its main objective is to uplift the economic threshold of its members and the community of Mina De Oro in general; that in 1995 four months after its inception, the cooperative temporarily ceased to operate due to inadequacy in capital needed to finance its operation; that on July 24, 2001 MAREBEMCO was reactivated when a significant number of farmers joined the cooperative which is enough to raise capital to start anew; that the fresh investments, however, were not sufficient to address the needs of the current number of members; that in order to raise additional funds for business expansion venturing into livestock production and to have a training center wherein it could conduct seminars and training for the benefit of members and non-members, the Board of Directors during its meeting decided to launch a raffle project; that the selling of the raffle tickets will start on December 2003 and it will end on November 2004; that the draw date of the raffle is scheduled on December 2004; and that the major prizes of the said raffle include one (1) unit Izusu Crosswind and one (1) unit Multi-Cab, while minor prizes include appliances. ETIDaH In reply, please be informed that the proceeds that you will derive in connection with the holding of the said raffle project are not subject to income tax and business taxes. Such income, however, should be declared in the annual information return to be filed by MAREBEMCO on or before April 15, 2005. (BIR Ruling No. 074-2001 dated April 27, 2001) Very truly yours, (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service