Income Tax Imposed on CBP

August 28, 1981 BIR RULING NO. 165-81 24-00 124-81 165-81 Governor Jaime C. Laya Central Bank of the Phils. (Thru the Minister of Finance) M a n i l a S i r : This refers to your letter to Minister Cesar E. A. Virata dated March 9, 1981 requesting for a ruling to the effect that the Central Bank of the Philippines should not be covered by the provisions of Presidential Decree No. 1177 and therefore not subject to income tax. It is represented that the problem arose as a result of Section 23 of Presidential Decree No. 1177 requiring "all units of government, including government-owned and controlled corporations to pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws"; that the Central Bank had requested the Commissioner of the Budget to exempt it from the effects of the aforesaid provision on the premise that the same could not have been intended to lay the Philippine income tax on its net income since such imposition would severely impair the Central Bank's effectiveness in discharging its primary responsibility 'to maintain internal and external monetary stability in the Philippines . . ." and " to foster monetary, credit and exchange conditions conducive to a balanced and sustainable growth of the economy;' and that it is assumed that said provision of Presidential Decree No. 1177 is intended to reach by taxation the income of corporations owned or controlled by the government which exercise "proprietary functions". casia In reply, please be informed that in Opinion No. 133, S. 1977, of the then Secretary of Justice, Section 23 of Presidential Decree No. 1177 was construed "as a clear and unequivocal expression of the legislative intent to subject all units of government, including government-owned or controlled corporation, to the payment of all taxes, duties and fees imposed under revenue laws". (Emphasis supplied). Accordingly, so long as the aforesaid Opinion is not revoked or otherwise modified, we are constrained to deny the herein request of the Central Bank of the Philippines. Very truly yours, RUBEN B. ANCHETA Acting Commissioner