Taxability of the Interest Income of Bank Deposits Consisting of Donations in Cash for the Mt. Pinatubo Victims

May 6, 1992 BIR RULING NO. 142-92 24 (e) (1) 274-91 142-92 Bishop Deogracias S. Iiguez, Jr., DD. Bishop House Iba, 2201 Zambales Dear Bishop Iiguez : This refers to your letter dated July 15, 1991, stating that the Diocese of Iba received donations in cash for the victims of Mt. Pinatubo; and that since you have earmarked these donations for their needs you deposited them in the bank to maximize income. Based on Article XIV, Section 4, paragraph 3 of the Philippine Constitution, you now request for exemption from the 20% final withholding tax on the interest income of said bank deposits. In reply, please be informed that although these donations are for charitable purposes, yet when these are deposited in the bank, the interest income thereon shall be subject to the 20% final withholding tax pursuant to Section 24 (e) (1) in relation to the proviso of Section 26 both of the Tax Code, as amended. In view thereof, your request has to be, as it is hereby, denied for lack of legal basis. Very truly yours, EUFRACIO D. SANTOS Deputy Commissioner Officer-in-Charge