Bureau of Local Government Finance Opinion

January 17, 1995 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The City Treasurer Cebu City S i r : This refers to the letter dated March 17, 1993 of Mr. Rey G. Halili, Chief Executive Officer, OMF Literature (OMF-LIT), requesting for a certification that OMF-LIT is a tax exempt entity. It is represented that OMF-LIT is a non-stock, non-profit religious organization engaged in publication, importation/exportation and distribution of Christian books and other religious gift items. Furthermore, OMF-LIT manifested having an extension office/bookstore in Cebu City where its application for a business permit was withheld in view of the opinion dated August 6, 1990 of the Legal Officer III of the city that the P734,510.00 worth of Bible and other religious items declared under Gross Sales is subject to the payment of the fixed tax provided for in the Local Tax Code (LTC), as amended, the law then in force. OMF-LIT claims that it is a tax exempt entity on the basis of the letter dated January 23, 1990 of the Bureau of Internal Revenue (BIR). It appears however, that the said exemption refers to income tax imposed by the national governments and does not extend to taxes that are imposed by local governments. llcd In reply to the 1st Indorsement, dated July 6, 1994, of this Bureau, that Office furnished the following information under its letter dated August 10, 1994: 1. OMF-LIT is still operating in the said city. 2. OMF-LIT only paid the regulatory fees in 1990 such as: Permit Fee, Zoning Fee, Garbage Fee and City Health Dept. Cert. but was never issued a Mayors permit due to non-payment of fixed taxes; and 3. No payment of any taxes whether regulatory or fixed tax from 1991 to date. On the basis thereof, this Bureau holds the view that it is incumbent upon OMF-LIT to present proof to support its claim for tax exemption. Accordingly, that Office is instructed to advise OMF-LIT 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. Otherwise, the P734,510.00 worth of Bible and other religious items declared under Gross Sales is subject to the payment of the local tax and fees imposed under duly enacted tax ordinances of that city. Very truly yours, LORINDA M. CARLOS Executive Director