Tax Exemption of Individual Taxpayers Whose Gross Sales or Receipts Do Not Exceed P100,000.00

July 8, 1999 BIR RULING NO. 098-99 236 (B); RMC 4-98-000-00-098-99 Mr. Jaime Triunfante Salvacion, Buhi Camarines, Sur S i r : This refers to your letter dated November 5, 1997 stating that you are a senior citizen aged 68; that you have no work to sustain your daily needs with your wife; that you tried hard to secure work but nobody hired you because you are sickly; that you are suffering from lung cancer; that to support your daily needs, you approached a prominent person to be your co-maker in order for you to open a "sari-sari" store; that an agent of the Bureau of Internal Revenue had gone to your store three times asking you to get a permit to operate your business; and that it will cost you P800.00 to secure a permit. In view of the above, you are now requesting that you be exempted from paying the corresponding registration fee to operate your business. In reply, please be informed that pursuant to Revenue Regulations No. 7-95, the term "in the course of business" was further qualified in the light of the declared policy of the government to provide, as much as possible, an equitable relief to a greater number of taxpayers in order to improve levels of disposable income and increase economic activity. Hence, this Office held that "any business or business pursued by an individual where the aggregate gross sales or receipts do not exceed P100,000.00 during any 12-month period shall be considered principally for subsistence or livelihood and not in the course of business." Accordingly, and since in all probability, you are among these individual taxpayers qualified under the aforestated definition, although still required to register, you shall nevertheless be exempted from the payment of registration fee as prescribed under Section 236(B) of the Tax Code of 1997, and from the payment of value-added tax (VAT) under Title IV, Chapter I and percentage taxes under Title V, both of the same Code, in accordance with Revenue Memorandum Circular No. 4-98 dated January 21, 1998. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue