Proceeds Derived by Mayon Relief Coordinating Council (MRCC) from the Dinner-Dance-Concert for the Benefit of the Mt. Pinatubo victims are Not Subject to Income and Business Taxes

February 11, 1994 BIR RULING NO. 057-94 26 (e) 000-00 057-94 Mayon Relief Coordinating Council Suite 602-B Fedman Building Salcedo Street, Legaspi Village Makati, Metro Manila Attention: Mr . Leandro I . Verceles Chairman Gentlemen : This refers to your letter dated May 14, 1993 informing this Office that last May 9, 1993, the MAYON RELIEF COORDINATING COUNCIL (MRCC), a purely charitable association, put up a Dinner-Dance-Concert at the Manila Hotel to raise funds for the victims of Mayon eruption; that Manila Hotel is charging you sales tax in the sum of P13,969.00 which is equivalent to 7.2% of the sales; that since you have earmarked every cent earned in said affair for the benefit of the Mayon victims, you are requesting for exemption from the said sales tax, as well as from other tax liabilities, if any, due the government from your said affair. In reply, please be informed that the sales tax (now VAT) is an excise tax imposed on and payable by the proprietors, operators and keepers of hotels, motels, resthouses, pension houses, lodging houses, resorts, restaurants, refreshment parlors and other eating places. As an indirect tax, it can be shifted to or passed on to the buyer, like your organization and shall form part of the cost of goods or services rendered, and shall not constitute the same as a tax payable by you for purposes of exemption, (Phil. Acetylene vs. CIR, G.R. No. L-19707, August 17, 1967). However, the proceeds derived by your organization from the Dinner-Dance-Concert for the benefit of the Mt. Pinatubo victims are not subject to income and business taxes. Such income, however should be declared in the annual information return to be filed by your organization on or before April 15, 1994. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue