DOJ Opinion No. 044, s. 1981

DOJ OPINION NO. 044 , s. 1981 March 3, 1981 The Deputy Director-General National Economic and Development Authority Manila Sir : This has reference to your request for the "legal interpretation of paragraphs h(1) and h(2) (A) of Batas Pambansa Blg. 45, (amending the National Internal Revenue Code) "specifically on the scope of the term 'Government of the Philippines'." LLpr The abovecited provisions, which refer to items deductible from income subject to tax, read: "SECTION 1. Paragraph (h) of Section 30 of the National Internal Revenue Code is hereby amended to read as follows: '(h) Charitable and other contributions . "(1) In General. Contribution or gifts actually paid or made within the taxable year to or for the use of the Government of the Philippines or any of its agencies or any political subdivision thereof for exclusively public purposes , or to domestic corporations or associations organized and operated exclusively for religious, charitable, scientific, youth and sports development, cultural or educational purposes or for the rehabilitation of veterans, or to social welfare institutions, no part of the net income of which inures to be benefit of any private stockholder or individual to an amount not in excess of six per centum in the case of an individual, and three per centum in the case of a corporation, of the taxpayer's taxable net income as computed without the benefit of this and the following subparagraph. (Emphasis supplied) (2) Contributions deductible in full . Notwithstanding the provisions of the preceding subparagraph, donations to the following institutions or entities shall be deductible in full: "'(A) Donations to the Government. Donations to the Government of the Philippines or to any of its agencies or political subdivisions including fully-owned government corporations exclusively to finance, to provide for, or to be used in undertaking priority activities in education, health, youth and sports development, human settlements, and science and culture, and in economic development according to a national priority plan to be determined by the NEDA, in consultation with appropriate government agencies, including its regional development councils, and private philanthrophic persons and institutions: Provided, however, That any donation which is made to the Government or to any of its agencies or political subdivisions not in accordance with the said annual priority plan shall be subject to the limitations prescribed in subparagraph (1) of this section'". (Emphasis supplied) You state that under BP 45 "donations to the Government of the Philippines or any of its agencies or any political subdivision shall be deductible from the donor's taxable income either in full, if made in accordance with a national priority plan, as provided for under paragraph h(2)(A) of the law [supra] or limited to six per cent in the case of an individual and three per cent in the case of a corporation, if not made in accordance with the national priority plan, as provided for under paragraph h(1)" [likewise supra]. Furthermore, you observe that "the term 'Government of the Philippines' as stated under paragraph h(2)(A) includes fully owned government corporations while paragraph h(1) does not indicate its inclusion." We take it therefore that your doubt arises from the abovesaid disparity of provisions, and that what you would like to know is whether or not the tax deduction referred to in paragraph h(1) includes contributions or gifts to government corporations, in view of the absence of any reference to government corporations in said provision. We answer the abovesaid query in the negative, subject to the discussion herein below set forth. The legislative intention to exclude from the benefit of paragraph h(1) contributions or gifts given to government-owned or controlled corporations is clear from the very absence of any mention of government corporations in said provisions; and this intention becomes all the more evident considering that paragraph h(2)(A), which deals with the same subject of deductibility of gifts, expressly and specifically includes "fully-owned government corporations" among the recipients of the donations entitled to the benefit of deductibility. If it had been the legislature's intent to include government corporations within the purview of the former provision, it would have said so, as it did in the latter. Furthermore, the abovesaid intention is reiterated in the language of the last proviso of paragraph h(2)(A) when it declares that any donation made "to the Government or to any of its agencies or political subdivisions not in accordance with the said annual priority plan shall be subject to the limitations prescribed in subparagraph (1) of this section [i.e., subject par. (h) (1)]. This proviso, in referring to the donations to be covered by the limitations of par. (h)(1) again merely mentions donations "to the Government or any of its agencies or political subdivisions", once more omitting government corporations. prcd In as much as the express terms of subject provisions clearly evince the true legislative intent, as above discussed, there is no need to go beyond the said express terms in order to arrive at the meaning of the law. Wherefore, we reiterate our answer to the query as hereinabove set forth. Very truly yours, (SGD.) RICARDO C. PUNO Minister of Justice