Tax Liability of Philippine International Friendship Organization

February 21, 1958 BIR RULING NO. 133-58 The Philippine International Friendship Organization, Inc. Department of Foreign Affairs Padre Faura, Manila Gentlemen : Reference is made to your letter dated January 28, 1958, requesting, in effect, reconsideration of our ruling of January 2, 1958 whereby we held that organization is not entitled to the 50% exemption from the amusement tax. In order to enjoy the 50% exemption provided in Section 261 of the Tax Code, there are two requisites that must concur, namely: 1. That the institution or association collecting, or in whose behalf are collected, the admission fees or charges is a charitable one; and 2. That such institution or association is duly registered. While it may be true that, as claimed by you, that organization is duly registered with the Securities and Exchange Commission, however, it does not appear that the same is a charitable organization. Obviously, only one of the aforestated requisites is present in the case of the Philippine International Friendship Organization and, therefore, the same cannot enjoy the benefit of exemption in question. In this connection, it may be stated that the letter dated July 30, 1956 of the Social Welfare Administration did not state categorically that the Philippine International Friendship Organization is a charitable organization but, instead, merely made mention of the fact that "the specific aims for which Solicitation Permit No. 819, dated July 13, 1956, has been granted to the above named organization falls under the extent and scope of the phrase 'charitable or public welfare purposes' of Section 1 of Act No. 4075 of the Philippine Legislature". It is a well settled rule that statutes granting tax exemptions are strictly construed against the taxpayer and he who claims exemption must clearly show that he falls within the such exemption. cdpr Very truly yours, (SGD.) JOSE ARAAS Commissioner of Internal Revenue