BIR Ruling No. 404-2022

BUREAU OF INTERNAL REVENUE REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE

Sec. 20 (d) (3), RA 7279 BIR Ruling No. 412-11 NSH1 0 4 - 2 0 2 2 OCT 0 5 202Z

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

Attention: General Manager/owner WILSON S. DASIG

Gentlemen:

Peoples Student Dormitory located at Brgy. Pingkian, Kayapa, Nueva Vizcaya. J.W.D. CONSTRUCTION in connection with the construction of Kayapa Indigenous 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,

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

XXX XXX XXX ( Exemption from the payment of the following:

(l) Project-related income taxes;

XXX XXX XXX

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

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 financing, liberalized terms on interest payments, and such other benefits in accordance with the provisions of this Act. lots only undertaken by the Government or the private sector for the unde:privileged and In relation thereto, Section 3 (r) of RA 7279, as amended, defines socialized

Kayapa Indigenous Peoples Student Dormitory located at Brgy. Pingkian, Kayapa, Based on foregoing, the construction by J.W.D. CONSTRUCTION of the

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project 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 benefit of the underprivileged tax incentive provision, granting exemption from project related income tax is limited to and homeless. Nueva Vizcaya is outside the definition of a "socialized housing" in relation to the tax incentives for the private sector under Section 20 of RA No. 7279. It is apparent that the

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 value-added tax (VAT) for the project contractor concerned, was already repealed by Moreover, Section 20 (d)(3) of RA No. 7279, as amended, on the exemption from

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

therefrom is the exception." frowns against exemptions from taxation and statutes granting the exemptions are thus construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of exemption from tax payments must be clearly shown and based on language in the law too 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 "Accordingly, tax statutes must be construed strictly against the

income tax and VAT relative to J.W.D. CONSTRUCTION's construction of Kayapa Vizcaya is hereby denied for lack of legal basis. (BIR Ruling No. 4 12-2012 dated October Indigenous Peoples Student Dormitory located at Brgy. Pingkian, Kayapa, Nueva 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 2aG 901836

2 G.R. No. 120082, 11 September 1996, 261 SCRA 667. ' Dimaampao, Japar B., Tax Principles and Remedies, Second Edition (2005).