Tax-exemption of Retired Officers of the AFP

January 9, 1958 BIR RULING NO. 023-58 Mr. Felipe E. Cantor Major, FS A.F.P. Exchange System G.H.Q., Armed Forces of the Philippines Camp Murphy, Quezon City S i r : This is with reference to your query on whether retired officers of the Armed Forces of the Philippines may be granted tax-exemption in respect of their gasoline purchases, considering that "they are entitled to all other privileges of military personnel in the active service, pursuant to Section 6 of Republic Act No. 340". In answer thereto, I have the honor to inform you that, pursuant to the pertinent provisions of Republic Act No. 1800, or the Appropriation Act for the current fiscal year, all purchases made by the Armed Forces of the Philippines exclusively for military purposes shall be tax-free. In order to give effect to said provisions, which were embodied in previous Appropriation Acts, this Office has allowed gasoline companies to sell and deliver petroleum products to the Armed Forces of the Philippines without adding to the purchase prices thereof the corresponding specific taxes which they paid thereon, if such products will be used exclusively for military purposes. Likewise, this Office has allowed members of the Armed Forces to purchase gasoline, free of the specific tax, to be consumed by the vehicles personally owned by them, provided that such vehicles are used in the performance of their official duties, which are necessarily military in character, subject to certain conditions (General Circular No. V-196). Those are the only instances when gasoline may be purchased tax-free. As the gasoline purchased by retired officers of the Armed Forces of the Philippines are not for military purposes, nor their vehicles for use in the performance of official duties, the exemption granted under the aforesaid Act cannot be extended to such retired officers. Republic Act No. 340, which is "an act to establish a uniform retirement system for the Armed Forces of the Philippines, to provide for separation therefrom, and for other purposes", does not treat of any matter relating to taxation. Such being the case, it is believed that the provisions of Section 6 of said Act are of no moment. And even granting that said provisions are relevant to the matter under consideration, the same cannot prevail over those of Republic Act No. 1800, which expressly impose the condition that, to be tax-exempt, the article purchased must be destined exclusively for military purposes. aisadc Very truly yours, (SGD.) JOSE ARAAS Collector of Internal Revenue