Request for Clarification of Section 8 of Republic Act No. 7278

April 11, 1997 BIR RULING NO. 043-97 26 94 (a) (3) 000-00 042-97 Boy Scouts of the Philippines Metro Manila South Council Aurora Blvd. (Tramo Road) Pasay City Attention: Mr . Joel V . Jimenez Council Scout Executive Gentlemen : This refers to your letter dated January 21, 1997 stating that the Council Executive Board of the Metro Manila South Council, Boy Scouts of the Philippines recently approved the implementation of the MMSC Community Relations and Involvement Project with the end view of making scouting more meaningful and relevant to the needs of the present day Philippines Society; that the project will focus on five (5) key areas of involvement: (1) Scouting Membership Expansion (2) Community Service Development (3) Community Education (4) Spiritual Outreach and Value Development (5) Physical Fitness; that this is a massive project involving the cities of Pasay and Muntinlupa as well as the Municipalities of Las Pias, Paraaque, Pateros and Taguig; and that to support the project as well as the standard operations and activities of the Council, you hope to raise P12 M through a year round fund raising campaign. cdt In connection therewith, you are requesting clarification of Section 8 of Republic Act No. 7278 otherwise known as an Act amending Commonwealth Act No. 111, as amended by Presidential Decree No. 460, entitled "An Act to Create a Public Corporation to be known as the Boy Scouts of the Philippines, and to define its powers and purposes" by strengthening the volunteer and democratic character of the Boy Scouts of the Philippines and for other purposes, relative to its tax and duty privileges. In reply thereto, please be informed that section 8 of R.A. No. 7278 provides, viz : "Sec. 8. Any donation or contribution which from time to time may be made to the Boy Scouts of the Philippines by the Government or any of its subdivisions, branches, offices, agencies or instrumentalities or by a foreign government or by private entities and individuals shall be expended by the National Executive Board in pursuance to this Act. The corporation shall be entitled to the following tax and duty privileges: "(a) Exemption from income tax pursuant to Section 26 (e), (g) and (h) of the National Internal Revenue Code, as amended; "(b) Exemption from donor's tax pursuant to Section 94 (a) (3) of the National Internal Revenue Code, as amended; "(c) Full deductibility of donations from the donors gross income for purposes of computing taxable income; and "(d) Tax and/or duty exemption of donations from foreign countries as provided under relevant laws such as, but not limited to Section 105 of the Tariff and Customs Code of the Philippines as amended, Section 103 of the National Internal Revenue Code, as amended. "Any other provisions of law to the contrary notwithstanding, there shall be no discrimination in tax treatment of the Boy and Girl Scouts of the Philippines." In view thereof, year round fund raising campaign where you hope to raise P12 million to support your aforementioned project shall be exempt from income and donor's taxes under Sections 26 and 94 (a) (3) both of the Tax code, as amended. Moreover, only donations by corporate donors in your favor shall be deductible in full from the donor's gross income for purposes of computing taxable income. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue