BIR Ruling No. 332-2016

RFPUBLICOF THE PHILIPPINES

DFPARTMENT OF FINANCE BUREAU OF INTFRNAL REVENUE

Quezon City

RA 7279

BIR Ruling No. 022-2009

#332-2016

6-29-2016

Lot 16 Blk. 85.Yen St.North Fairview Park Subd. AZTEK CONSTRUCTION FIRM

North Fairview, Quezon City

Attention: ENGR.ALAN B.ZENIT

Contractor

Gentlemen:

This refers to the letter of Arch. Susana V. Nonato. Officer-in-Charge. NHA-

SLB dated November 29.2013.requesting tax exemption on the Survey Works for

Nuestra Senora de Salvacion Project located at Brgy.Lugui, Labo.Camarines Norie.

Document disclosed that on September 11,2013. Survey Contract for Survey

Works for Nuestra Senora de Salvacion Project. Brgy.Lugui.Labo,Camarines.Norte

was executed by the National Housing Authority (NHA and Aztek Construction

Firm, a duly organized firm registered and existing under the laws of the Republic of

the Philippines. whereby the latter agreed to undertake Survey Works including

Relocation Survey. Topographic Survey. Subdivision Survev and Lot Titling for a

contract price of

In reply. please be informed that your request for the exemption of Aztek

Construction Firm from payment of VAT relative to the Survey Works for Nuestra Senora de Salvacion Project. Brgy. Lugui. Labo. Camarines. Nortecannot be

granted for lack of legal basis.

n332-2016 6-29-2016

Aztek Construction Firm Page?or 3

Section 20 of R.A.No.7279.states that

Sec. 20. Incentivesfor Private Sector Participating in Socialized Housing.-To encourage greater private sector participation

in socialized housing and further reduce the cost of housing units for the

benefit of the underprivileged and homeless.the following incentives shall

be extended to the private sector

XXX XX XXX

(d Exemption from the puvment of the following.

( Project-retated income taxes:

( XXX XXX XXX:

3) Value-added tax for the project contractor concerned:"

XXX XXX *I

Section 3(r of R.A.7279 definessocialized housingas follows

"(r)"Socializedhousing"referstohousingprogramsandprojects covering houses and lots or homelots only undertaken by the Governmen

shall include sites and services development. long-term financing accordance with the provisions of this Act;(Underscoring.supplied) liberalized terms on interest pavments, amd such other benefits in or the private sector for the underprivileged and homeless citizens which

the contractor of socialized housing units is exempt from the payment of value-added tax.BIR Ruling No.022-09 dated November 26,2009

development of the housing projects and, considering further that the survey works and services to be undertaken by Aztek Construction Firm is separate from the construction of the socialized housing units. Although certified by the NHIA as a 20d of R.A.7279.It is apparent that the tax incentive provision,granting exemption from project related taxes and VAT is limited to project contractors on the Relocation. Topographic. Subdivision and Lot Titling and is not the contractor for the socialized housing project, it is nevertheless outside the definition of a socialized housing in relation to the tax incentives for the private sector under Section 20 of R.A.7279,Aztek Construction Firm cannot be considered as a private contractor participating in socialized housing entitled to tax exemption privileges under Section construction and development of houses and lots or homelots only with a view to reduce the cost of housing units for the benefit of the underprivileged and homeless Inasmuch as Aztek Construction Firm is only contracted as surveyor for

burden is upon the taxpayer to establish his right to exemption beyond reasonable strictiy construed against the taxpayer. Exemptions are never presumed and the It should be remembered that laws and statutes granting tax exemptions are

#33-216

6-29-2016

Aztek Construction Firm

Puge 3 of 3

doubtIn the case of Mactan Cebu International Airport Authority Marcosthe

Supreme Court held:

Accordinglyax statutes must he construed siricthy aguinst the government and liberally in favor of the taxpaver. But since taxes are whar we pay for civilized society or are the lifeblood of the nation the lne frowns against exemptions from taxation and statutes granting the exemptions are thus construed strictissimi juris against the taxpayer cmd

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. Elsewise stated.taxation is the rule. exemption

therefrom is the exeeption.

In view of the foregoing,the request for exemption from payment of VAT and

project related taxes of the Aztek Construction Firm relative to its participation as contractor in the project-Southville 7 Housing Project.Brgy.Dayap & Sto.

Tomas.CalauanLagunais hereby denied for lack of legal basis.

Very truly yours.

KIMS.JACINTO-HENARES

Commissioner of Internal Revenue

K-I JRC 04251

Dimampao.Japar B.Tax Principfs and RemediesSecondFtion2005 G.R.No.120082.September 1996.261SCRA667