BIR Ruling [UN-379-95]

October 23, 1995 BIR RULING [UN-379-95] Mr. Carmelino S. Gozum No. 13 Pluto Street Breaktown Subdivision Paraaque, Metro Manila S i r : This refers to your letter dated June 13, 1995 requesting for exemption from income tax Republic Act No. 7432, otherwise known as the Senior Citizens Act. It is represented that you are a retiree for fourteen (14) years and a Senior Citizen; that after your retirement in 1981, to keep yourself busy, you engaged in life insurance selling with Insular Life Assurance Company, Ltd.; and that as a Licensed Insurance Underwriter, you earned an average yearly income of P65,000.00 which is not even enough for your daily subsistence due to spiralling cost of living under the present economic conditions. In reply, please be informed that your request cannot be granted by this Office for lack of legal basis, R.A. No. 7432, which was approved on April 23, 1992 provides that a senior citizen shall be entitled to exemption from the payment of individual income tax, provided that his annual taxable income does not exceed the poverty level of P60,000.00 or such amount as may be determined by the National Economic and Development Authority (NEDA) for a certain taxable year. (BIR Ruling No. RA7432/000-00/072-94 dated March 9, 1994) Further, it has been the constant and uniform holding that exemption from taxation is not favored and is never presumed, so that if granted it must strictly construed against the taxpayer. Affirmatively put, the law frowns on exemption from taxation, hence, an exempting provision should be construed strictissimi juris . (Catholic Church vs. Hastings, 5 Phil. 70; Esso Standard Eastern, Inc. vs. Acting Commissioner of Customs, L-D1841, Oct. 28, 1966, 18 SCRA 488; Phil. Acetylene vs. Comm. of Int. Rev., L-19701, Aug. 17, 1967, 20 SCRA 1056; Comm. of Int. Rev. vs. Guerrero, L-20942, Sept. 22, 1967, 21 SCRA 180; Manila Electric Co. vs. Vera, L-29987, Oct. 22, 1975, 67 SCRA 351) Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)