BIR Ruling No. 015-09

July 30, 2009 BIR RULING NO. 015-09 Sec. 28, Art. VI, Constitution Philippine Overseas Employment Administration (POEA) BFO Building, Ortigas Avenue corner EDSA, Mandaluyong City Attention: Ms. Jennifer Jardin-Manalili Administrator Gentlemen : This refers to your letter dated December 4, 2008 requesting the Bureau of Internal Revenue to extend some kind of tax incentive to licensed agencies of the POEA that will be participating in the latter's endeavors to assist affected Overseas Filipino Workers who have come home due to the current global financial crisis. In reply, please be informed that the power to grant any tax incentive such as exemptions of or waiver of payment of the same, is not within the province of the Bureau of Internal Revenue. This power resides in the Congress of the Philippines as provided for in Article VI of the 1987 Constitution of the Republic of the Philippines, to wit: "Section 28. (1) The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation. xxx xxx xxx (4) No law granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress." The above provision clearly lodges the power to tax, and with it, the power to exempt any person/entity or similarly situated persons/entities, in the Congress of the Philippines, which is composed of the Senate and the House of Representatives. This power to tax, and the accompanying power to grant exemptions cannot be delegated unless there is explicit constitutional authority. (BIR Ruling No. DA-391-99 dated July 8, 1999) EcDTIH Therefore, we regret to inform you that your request for a grant of tax exemption/incentive to POEA-licensed agencies participating in the re-deployment of affected Overseas Filipino Workers is denied by reason of the lack of authority of the BIR to exercise such power. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Commissioner of Internal Revenue