Liberal Application Cannot be Granted on the Grant of Tax Exemption

July 17, 1958 BIR RULING NO. 373-58 The Caramoan Farmers Cooperative Marketing Association Caramoan, Camarines Sur Gentlemen : This is with reference to your letter addressed to His Excellency, the President of the Philippines dated June 2, 1958, a copy of which was furnished this Office on June 11, 1958. In this connection, please be informed that under the provisions of Act 3425 as amended by Republic Act No. 702, cooperative associations are exempt from the merchant's sales tax, income tax and all other percentage taxes, provided that their activities are confined to those enumerated in said Act No. 3425. Accordingly, if their activities are not confined to those enumerated in Act No. 3425, they are subject to tax. Your request that the law be given a liberal application cannot be granted inasmuch as this involves a grant of tax exemption. Statutes exempting persons or property from the payment of tax make invidious distinction between citizens and partake of the nature of favoritism and produce injustice and inequality in the contributions to a common burden and being inconsistent with the general policy of our laws, are construed strictly to avoid these evils. (Frantz v. Debsen, 2 So. 75). cdta Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue