Printing and Distribution of Religious Literature

August 8, 1958 BIR RULING NO. 430-58 Messrs. Felipe B. Ollada and Associates Certified Public Accountants 505 China Bank Building Manila Gentlemen : Reference is made to your letter of the 16th ultimo, requesting information on whether or not the printing and distribution of religious literature and the importation of printing equipments and supplies by the Philippine Publishing House and the Philippine Union Mission Corporation of Seventh-day Adventists under the circumstances mentioned therein are subject to the percentage and compensating taxes. You stated that the Philippine Publishing House is owned by the aforenamed corporation and that the latter is a religious corporation, and, in support thereof, copies of its articles of incorporation, as well as of the certificates of registration with this Office and the Bureau of Commerce, have been attached to your said letter. You further stated that the printing of religious literatures is one of the media by which the Philippine Union Mission Corporation of Seventh-Day Adventists propagates and spreads its religious beliefs and philosophies in the Philippines. cdti (For brevity, we shall hereafter refer to the Philippine Publishing House as "House" and to the Philippine Union Mission Corporation of Seventh-day Adventists as "Corporation".) In answer thereto, I have the honor to inform you that, as the constitutional guarantee of the free exercise and enjoyment of religious profession and worship carries with it the right to disseminate religious information and as the printing and distribution of religious printed matters are undoubtedly a means of disseminating religious information, religious literature printed by the House and subsequently distributed by the Corporation to its provincial branches and agencies all over the Philippines are not subject to any internal revenue tax, pursuant to the doctrine laid down in the case of American Bible Society vs. City of Manila, G.R. No. L-9637, April 30, 1957. In said case, the Supreme Court held that to tax the distribution and sale by the plaintiff of bibles and/or gospel portions thereof would be to impair its right to the free exercise and enjoyment of its religious profession and worship, as well as its right to disseminate religious beliefs. On the other hand, considering that the prohibition to tax is limited to the exercise and enjoyment of religious profession and worship and considering further that the compensating tax, if imposed upon importations of religious organizations for use in connection with their activities, would not amount to taxing the right of religious profession and worship, it being a tax on the use of property, this Office is of the opinion and so holds that printing equipments and supplies imported by the House and/or the Corporation for use exclusively in the printing of religious materials are subject to the compensating tax prescribed in Section 190 of the Tax Code. The following dissertation made in the case of Murdock vs. Pennsylvania, quoted with approval by our Supreme Court in American Bible Society vs. City of Manila, supra , is enlightening: "We do not mean to say that religious groups and the press are free from all financial burdens of government. (See Crosjean v. American Press Co., 297 U.S. 233, 250, 80 L. ed. 660, 668, 56 S. Ct. 444) We have here something quite different, for example, from a tax on the income of one who engages in religious activities or a tax on property used or employed in connection with these activities. It is one thing to impose a tax on the income or property of a preacher . It is quite another thing to exact a tax from him for the privilege of delivering a sermon . The tax imposed by the City of Jeannette is a flat license tax, the payment of which is a condition of the exercise of these constitutional privileges . The power to tax the exercise of a privilege is the power to control or suppress its enjoyment. . . ". (Emphasis supplied) cdpr Moreover, it appears that the printing activities of the House are not limited to religious materials being distributed by the Corporation in pursuance of this right of disseminating religious beliefs. We shall quote from your letter: "We are of the opinion, however that commercial printing jobs received from outsiders are subject to percentage tax but religious books and other religious reading matters printed by the Philippine Publishing House for the American Bible Society, are also exempted because the American Bible Society is a non-taxable religious organization. All other printing jobs that may be accepted by the Philippine Publishing House from all other parties are subject to percentage tax." Based on the foregoing considerations, this Office is likewise of the opinion and, therefore, holds that the Corporation is liable for the payment of the 3% printer's tax imposed in Section 191 of the Tax Code on the printing jobs done by the House for the American Bible Society in the same way that the former is so liable on printing jobs accepted by the latter from other parties. The 3% tax is imposed on the printing business of the corporation carried on by it thru the House and, certainly, is not a tax on the right of either the Corporation or the American Bible Society to the free exercise and enjoyment of religious profession and worship which right, as abovestated, includes the right to disseminate religious information. llcd Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue