BIR Ruling No. 404-61

No date supplied BIR RULING NO. 404-61 Reference is made to your letter . . . requesting that your wife who allegedly is a nurse employed in the hospital named Clinica de la Rosa, Dakota, Manila, be exempt from the occupation tax imposed on nurses. As reasons for the request, you stated that "being employed by a hospital and devoting her entire services thereto does not constitute a private practice of her profession", because she only carries out the orders of the doctor attending to a patient; that the doctor-owner of the hospital has paid his occupation tax and, therefore, to require your wife to pay hers would constitute double taxation; that you know of an accounting and law firm which has under its employ certified public accountants and lawyers who do not pay any occupation tax because, as in the case of Mrs. Fanco, they are not considered engaged in the active practice of their respective professions; and that the salary of Mrs. Fanco is receiving is very small compared to the untold sacrifices she undergoes in the performance of her duties. In answer thereto, I have the honor to inform you that a nurse employed in a hospital, carrying out the orders of the attending physician or physicians is considered engaged in the active practice of her profession, especially so if she devotes her entire professional services thereto. The privilege tax on occupations, such as these imposed on doctors and nurses, is a tax on the privilege of exercising or engaging in a profession or calling. It is personal and must be paid by each individual exercising or engaging in a profession or calling subject thereto. Accordingly, the occupation tax paid by the doctor-owner of the hospital is due on the privilege of exercising his profession as a doctor, while the tax paid, or should be paid, by your wife on the privilege of exercising her profession as a nurse. Therefore, there can be no double taxation in the case. Unlike the income tax, the occupation tax is not based on the amount of receipts or earnings of the taxpayer. The fact that the imposition thereof works hardship in some cases does not of itself make the tax unreasonable. "The reasonableness of an occupation tax does not depend upon whether or not a hardship results in an isolated case, but instead upon the general operation of the tax in the class to which it applies". (B.I.R. Ruling dated Jan. 23, 1957, citing Cooley, The Law of Taxation, Vol. IV, Sec. 1714) Accordingly, the fact that your wife is receiving an amount of salary which is not commensurate to her work is not a legal basis for exempting her from the tax. Moreover, it is believed that the matter is one which should be threshed out with her employer. cdpr While we have all the compassion for one who can "hardly . . . afford the bare necessities of . . . life", however, we regret that we are not in a position to help you out by extending tax exemption to your wife without any legal basis for so doing. The function of this Office is merely to enforce the internal revenue laws and regulations and should you, after reading this letter, still believe that there is injustice somehow or somewhere, the remedy is not with it but with Congress who alone can modify, alter, or even repeal a law. Regarding the nonpayment of occupation tax by certified public accountants and lawyers you mentioned, it will be highly appreciated if we can be supplied with the necessary information leading to the collection of the corresponding taxes and penalties from them. Please be informed in this connection that in accordance with Republic Act No. 2338, which took effect on June 19, 1959, an informer of a violation or violations of the revenue or customs law is entitled to a reward. prcd