BIR Ruling No. 322-14

August 13, 2014 BIR RULING NO. 322-14 Sec. 30 (G), Tax Code of 1997; RMC 14-2001; RMO 20-2013 & 9-2014 Gingoog City Women and Puericulture Center Foundation, Inc. Lugod corner Guno Streets, Brgy. 16, Gingoog City, Misamis Oriental Attention: Ms. Josefina C. Balsamo President Gentlemen : This refers to your letter dated April 13, 2012 requesting for the issuance of a certificate of tax exemption enjoyed by a civic league or organization not organized for profit but operated exclusively for the promotion of social welfare pursuant to Section 30 (G) of the Tax Code of 1997, as amended. It is represented that GINGOOG CITY WOMEN AND PUERICULTURE CENTER FOUNDATION, INC. with Taxpayer's Identification No. 005-941-146, is a non-stock, non-profit corporation duly organized under the laws of the Philippines; that it is registered with the Securities and Exchange Commission (SEC) under Registration No. CN200254276; and that the purposes for which it was incorporated are the following: 1. To establish a maternal and child care program; 2. To establish a nursery program where we can take care of babies while the mother is working; 3. To cater to the needs of the women populace especially the nursing mothers and their new born babies; 4. To improve the plight of the marginalized mothers, women and children of the said sector. In reply, we regret to inform you that we cannot grant your request due to your failure to comply with the documentary requirements under Revenue Memorandum Circular No. 14-01 for entities under Section 30 (G) of the Tax Code of 1997, as amended, specifically: 1) Articles of Incorporation which must include the following provisions: CaHcET i) that the corporation is non-stock, non-profit; ii) that the primary purpose for which it was created is one of those enumerated under Sec. 30 of the Tax Code of 1997; iii) that no part of the net income shall inure to the benefit of any of its members; iv) that the trustees do not receive any compensation; and v) in case of dissolution, assets of the corporation shall be transferred to similar institution or to the government. As the power of taxation is a high prerogative of sovereignty, the relinquishment is never presumed and any reduction or diminution thereof with respect to its mode or its rate, must be strictly construed, and the same must be couched in clear and unmistakable terms in order that it may be applied. 1 Thus, in Quezon City and The City Treasurer of Quezon City vs. ABS-CBN Broadcasting Corporation , 2 the Supreme Court declared that: "He who claims an exemption from his share of common burden must justify his claim that the legislature intended to exempt him by unmistakable terms. For exemptions from taxation are not favored in law, nor are they presumed. They must be expressed in the clearest and most unambiguous language and not left to mere implications. It has been held that 'exemptions are never presumed, the burden is on the claimant to establish clearly his right to exemption and cannot be made out of inference or implications but must be laid beyond reasonable doubt'. In other words, since taxation is the rule and exemption the exception, the intention to make an exemption ought to be expressed in clear and unambiguous terms." From the foregoing, the Bureau is constrained to deny your request for exemption. In the event that the corporation is able to comply with the documentary requirements proving its qualification to avail of the incentive provided under Section 30 of the Tax Code, it should submit the same to the Revenue District Office where they are registered following the directives under Revenue Memorandum Order Nos. 20-2013 and 9-2014. Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner Bureau of Internal Revenue Footnotes 1. Luzon Stevedoring Co. vs. Court of Tax Appeals , G.R. No. L-30232, July 29, 1988, 163 SCRA 647. 2. G.R. No. 166408, October 6, 2008.