Deductibility of Donations Made to Philippine National Skills Competition of TESDA

June 28, 1999 BIR RULING NO. 095-99 095-99 Director General Edicio Dela Torre Technical Education and Skills Development Authority (TESDA) East Service Road, South Superhighway Fort Bonifacio, Taguig, MM SUBJECT : Phil . National Skills Competition (PNSC) of TESDA Dear Director General dela Torre : This refers to your letter to the Honorable Secretary of Finance dated June 15, 1999 which was referred to this Office for appropriate action, concerning your request for information whether donations to the Phil. National Skills Competition (PNSC) of TESDA may be tax deductible pursuant to Section 34(H) of the National Internal Revenue Code of 1997. It is represented that the said competition is an undertaking of the TESDA pursuant to Section 30 of Republic Act 7796; that, the competition is aimed at promoting quality skills in the country with the end view of accelerating its economic growth through the development of highly skilled workforce; that, this year the competition of TESDA is scheduled on August 18-25, 1999 at the Subic Freeport with His Excellency President Joseph E. Estrada as the Guest of Honor; that the competition serves as an avenue to: Showcase and recognize the work excellence of young skilled workers in a competitive setting; Provide the Technical-Vocational Education and Training (TVET) System with an objective and precise means of measuring the comparative and collective quality of its outputs; Promote cooperation between and among institutions in the TVET system, the private sector thru industry associations, organizations and enterprises, and various government units and agencies in the pursuit of work excellence and commendable work values for the blue-collar workers; and Promote the transfer and exchange of voc-tech education and training technologies between and among training and development organizations and institutions, TVET providers and trade experts. In reply, please be informed that under Section 34(H)(2)(a) of the National Internal Revenue Code of 1997, the donor may deduct in full from his gross income, for income tax purposes, any donation to the government, subject to the following conditions: "(a) Donations to the Government . Donations to the Government of the Philippines or to any of its agencies or political subdivisions, including fully-owned government corporations, exclusively to finance, to provide for, or to be used in undertaking priority activities in education, health, youth and sports development, human settlements, science and culture, and in economic development according to a National Priority Plan determined by the National Economic and Development Authority (NEDA), in consultation with appropriate government agencies, including its regional development councils and private philanthropic persons and institutions: Provided, That any donation which is made to the Government or to any of its agencies or political subdivisions not in accordance with the said annual priority plan shall be subject to the limitations prescribed in paragraph (1) of this Subsection;" LLjur Since TESDA is a government entity and the aforementioned competition under its auspices is deemed embraced by the proviso "exclusively to finance, to provide for, or to be used in undertaking priority activities in education," this Office is of the opinion that donations to TESDA for the above mentioned purpose may be fully claimed by the donor as deduction from his gross income for income tax purposes, pursuant to Section 34(H)(2)(a) of the National Internal Revenue Code of 1997. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue