BIR Ruling No. 403-2022

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Sec. 20 (d) (3), RA 7279 BIR Ruling No. 412-11 N5H-4"03- 2 0 22 OCT 0 5"2022

Alicia, Isabela J.W.D. CONSTRUCTION Quirino St., Brgy. Calaocan,

Attention : General Manager/owner WILSON S. DASIG

Gentlemen:

Nueva Vizcaya. J.W.D. CONSTRUCTION in connection with the construction of Nueva Vizcaya State University IP Student Dormitory located at Bambang Campus, Heroes Blvd., Bambang, This refers to your request for exemption from payment of taxes on behalf of

as amended by RA No. 10884 (Balanced Housing Development Program Amendments) dated July 17, 2016, reads: In reply, please be informed that pertinent portion of Section 20 of RA No. 7279.

the benefit of the underprivileged and homeless, the following Socialized Housing. -- To encourage greater private sector participation in socialized housing and further reduce the cost of housing units for incentives shall be extended to the private sector. " Sec. 20. Incentives for Private Sector Participating in

XXX XXX XXX Exemption from the payment of the following: (1) Project-related income taxes;

XXX XXX XXX (3) Value-added tax for the project contractor concerned;" (Emphasis and underscoring supplied)

financing, liberalized terms on interest payments, and such other benefits in accordance housing as referring to housing programs and projects covering houses and lots or home homeless citizens which shall include sites and services development, long-term with the provisions of this Act. lots only undertaken by the Government or the private sector for the underprivileged and In relation thereto, Section 3 (r) of RA 7279, as amended, defines socialized

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benefit of the underprivileged and homeless. income tax is limited to proiect contractors on the construction and development of houses and lots or home lots only with a view to reduce the cost of housing units for the relation to the tax incentives for the private sector under Section 20 of RA No. 7279. It is apparent that the tax incentive provision, granting exemption from project related Vizcaya State University IP Student Dormitory located at Bambang Campus, Heroes BIvd., Bambang, Nueva Vizcaya is outside the definition of a "socialized housing" in Based on the forgoing, the construction by J.W.D. CONSTRUCTION of Nueva

Section 86 (tt) and (uu) of RA No. 10963. value-added tax (VAT) for the project contractor concerned, was already repealed by Moreover, Section 20 (d)(3) of RA No. 7279, as amended, on the exemption from

is upon the taxpayer to establish his right to exemption beyond reasonable doubt.' In the strictly construed against the taxpayer. Exemptions are never presumed and the burden case of Mactan Cebu International Airport Authority v. Marcos,2 the Supreme Court held: It should be remembered that laws and statutes granting tax exemptions are

payments must be clearly shown and based on language in the law too therefrom is the exception." liberally in favor of the taxing authority. A claim of exemption from tax plain to be mistaken. Else wise stated, taxation is the rule, exemption government and liberally in favor of the taxpayer. But since taxes are what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting the exemptions are thus construed strictissimi juris against the taxpayer and "Accordingly, tax statutes must be construed strictly against the

income tax and VAT, relative to J.W.D. CONSTRUCTION's construction of Nueva Vizcaya State University IP Student Dormitory located at Bambang Campus, Heroes Blvd., Bambang, Nueva Vizcaya is hereby denied for lack of legal basis. (BIR Ruling No. 412-2011 dated October 28, 2011). Accordingly, your request for tax exemption from payment of project-related

Please be guided accordingly.

Very truly yours.

K-1-JAC Commissioner of Internal Revenue LILIA CATRIS GUILLERMO Ua llm 201837

2 G.R. No. 120082. 11 September i996, 261 SCRA 667. Dimaampao, Japar B., Tax Principtes and Remedies, Second Edition (2005).