BIR Ruling No. 328-14

August 13, 2014 BIR RULING NO. 328-14 Dr. Eduardo V. Roquero Memorial Hospital Sapang Palay City of San Jose del Monte Bulacan Attention: Dr. Isabela S. Roquero Hospital Director Gentlemen : This refers to your undated letter requesting for confirmation of the tax exemption of Dr. Eduardo V. Roquero Memorial Hospital under Section 30 of the National Internal Revenue Code of 1997, as amended (NIRC). It is represented that Dr. Eduardo V. Roquero Memorial Hospital is a sole proprietorship hospital serving the health needs of informal settlers since 1986. Section 30 of the NIRC provides exemption from corporate income tax to certain entities subject to conditions. These exempt organization must not be sole proprietorships since individuals are not subject to corporate income tax. Along with police power and eminent domain, taxation is one of the three basic and necessary attributes of sovereignty. Thus, the State cannot be deprived of this most essential power and attribute of sovereignty by vague implications of law. Rather, being derogatory of sovereignty, the governing principle is that tax exemptions are to be construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority; and he who claims an exemption must be able to justify his claim by the clearest grant of statute. The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed. In case of doubt, non-exemption must be favored. Taxes being the lifeblood of the government that should be collected without unnecessary hindrance, every precaution must be taken not to unduly suppress it. (BIR Ruling No. 310-2011 dated August 22, 2011) SacTAC A review of the documents submitted in support of the request shows that Dr. Eduardo V. Roquero Memorial Hospital is a sole proprietorship owned and operated by Isabelita Sandoval Roquero. Accordingly, it cannot avail of the tax exemption under Section 30 of the NIRC as this exemption is conferred only to organizations or corporations. IN VIEW OF THE FOREGOING, this Office is of the opinion that Dr. Eduardo V. Roquero Memorial Hospital does not qualify for exemption under Section 30 of the NIRC. It is therefore liable for income taxes imposed under Title II of the NIRC and other applicable taxes. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner Bureau of Internal Revenue