Bureau of Local Government Finance Opinion

December 29, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned to the Regional Director for Local Government Finance, Region VII, 3rd Floor, Cebu Kang-Ha Foundation Bldg., corner Lapu-Lapu and Juan Luna Streets, Cebu City. This refers to the letter dated September 23, 1998 of the Assistant City Treasurer, Officer-in-Charge of Dumaguete City seeking opinion whether the Philippine Christian Literature, Inc. (PCLI), a non-stock, non-profit Interdenominational Christian Ministry engaged in spreading the gospel through the sale of Bibles and other Christian Literatures, be exempt from business tax. It is claimed that PCLI once enjoyed exemption from the payment of internal revenue taxes on business granted by then Commissioner of Internal Revenue Misael P. Vera. However, as mentioned in the said letter dated September 23, 1998, said exemption ceased in view of Sections 193 and 534(f) of the Local Government Code (LGC) of 1991. aEcDTC That Office likewise claimed that the 1997 Omnibus Tax Ordinance of the City of Dumaguete does not provide tax exemption to any religious groups engaged in the distribution and sale of religious scriptures and reading materials. It must be pointed out that the exemption mentioned above refers to taxes imposed by the National Government pursuant to the provisions of the National Internal Revenue Code and does not extend to taxes that are imposed by local governments. Be that as it may, Section 5, of Article III of the Constitution of the Republic of the Philippines, provides as follows: "SEC. 5. No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof. The free exercise and enjoyment of religious profession and worship; without discrimination or preference, shall forever be allowed. No religious test shall be required for the exercise of civil or political rights." In this connection, this Bureau held the view that it is incumbent upon a taxpayer to present proof to support its claim for the exemption. Accordingly, that Office is instituted to advise PCLI to submit the necessary evidence that it is indeed a religious organization and thus exempt from taxes under the constitutional guarantee of free exercise and enjoyment of religious profession. Finally, it may be stated that the description herein referred to may be enforced even in the absence of an implementing ordinance because its enforcement does not involve the exercise of the taxing power of the local government unit. IcDESA Be guided accordingly. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge