Tax Liability of Basketball Games Sponsored by the Boy Scouts of the Philippines

December 18, 1958 BIR RULING NO. 716-58 10th World Jamboree Committee Boy Scouts of the Philippines 181 Concepcion St., Manila Attention : Mr . Fernando G . Pimentel Fund Campaign Director Gentlemen : Reference is made to your letter dated December 4, 1958 requesting the reconsideration of the ruling contained in the letter of this Office dated November 11, 1958 granting the basketball games sponsored by that Organization exemption from the amusement tax only to the extent of 50% thereof, pursuant to Section 261 of the Tax Code. You contend that Organization is exempt from taxation under Article VI, Section 22, paragraph 3 of the Constitution of the Philippines, by the nature of its creation and purposes as defined by Sections 3 and 4 of Commonwealth Act No. 111, and Opinion No. 153, series of 1948, of the Secretary of Justice. In reply, I have the honor to inform you that all the references mentioned by you in support of your claim for exemption are not relevant to the amusement tax. The constitutional provision on exemption refers only to the realty tax. Commonwealth Act No. 111, among others, merely states the nature of that Organization, which is benevolent in character. Opinion No. 153 of the Secretary of Justice merely states that Organization is not covered by Republic Act No. 104, which contemplates only Government owned or controlled corporations engaged in business. Nowhere in the law creating that Organization is a provision on exemption from tax. Exemption from taxation must rest on a clear grant. Unless there is a law expressly granting that Organization exemption from the amusement tax or any other tax, your claim from total exemption from the amusement tax cannot be granted. As the only law upon which you may claim exemption from the amusement tax is Section 261 of the Tax Code, your exemption therefrom extends only to 50% of the tax imposed by Section 260 of said Code. In the light of the foregoing, your request for reconsideration has to be, as it is hereby denied. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue