GSIS Tax Exemptions P.D. No. 1146 Revoked by P.D. No. 1177

January 20, 1982 BIR RULING NO. 016-82 53-e 000-00 016-82 Development Bank of the Philippines P.O. Box 800 Makati Commercial Center 3117 Attention: Mr . Miguel R . Luna Manager, Trust Department Gentlemen : This refers to your letter dated November 24, 1980, requesting exemption for and in behalf of your client, the Government Service Insurance System (GSIS) from the withholding tax provision of Section 53 (e) of the Tax Code, as amended by Presidential Decree Nos. 1156 and 1739. In reply, please be informed that although under Section 33 of Presidential Decree No. 1146 which took effect on May 31, 1977, the GSIS is exempt from all taxes, assessments, fees, charges or duties of all kinds, the said tax exemptions have been revoked by P.D. No. 1177, effective July 30, 1977, which requires all government units, government-owned or controlled corporations to pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws. (See Opinion No. 133, s. 1977, Secretary of Justice). Accordingly, since the GSIS is liable to income tax, the interests on its bank deposits shall be subject to the 15% withholding tax in case of savings deposit and 20% in the case of time deposits and yield from deposit substitutes, in accordance with Section 24(cc) in relation to Section 53(e) both of the tax Code, as amended by Presidential Decree No. 1739. However, GSIS is entitled to a tax subsidy, in which case, it shall not be required to pay cash or its equivalent. The revenue collecting agencies shall instead issue a "payment compliance certificate" indicating the nature of the assessment and amount due. The subsidy shall be effected through journal vouchers or their equivalent (See Paragraphs 4,5,6 and 9, Finance Circular No. 2-78, implementing Section 23, Presidential Decree No. 1177). Very truly yours, RUBEN B. ANCHETA Acting Commissioner