THE BUREAU of Internal Revenue (BIR) has set the tax treatment of the
Home Development Mutual Fund (Pag-IBIG) in line with the housing
agency's charter.
The bureau affirmed the tax-exempt status of Pag-IBIG in its Revenue
Memorandum Circular No. 43-2011, dated Sept. 28.
"No tax measure of whatever nature enacted shall apply to the Fund...
Any tax assessment against the Fund shall be null and void," Home
Development Mutual Fund Law of 2009 or Republic Act No. 9679 stated.
All assets, properties, benefit payments, contributions and accruals of
Pag-IBIG will also be exempt from taxes. The income and investment
earnings from these are not taxable as well, the law added.
The charter was signed into law in July 2009 and its implementing rules
and regulations were made effective beginning last year.
However, in the case of documentary stamp taxes (DST), while Pag-Ibig is
exempt from the obligation, the other party in the transaction is not.
"The other party to the taxable document who is not exempt shall be the
one directly liable to pay the said documentary stamp tax," the BIR
issuance read.
"The DST is a tax on on transactions. While the Pag-IBIG is an exempted
party, the transaction is not, so the other party will have to pay the
tax," BIR Commissioner Kim S. Jacinto-Henares said in a phone interview
yesterday.
These transactions subject to DST include loan agreements, the issuance
of stocks, the transfer of shares and the like.
Pag-IBIG members, therefore, will still have to pay DST when they take
out loans from the Fund, Ms. Henares confirmed.
The BIR is the government's main revenue-generating agency, responsible
for 70% of state revenues. It is tasked to collect P940 billion this
year. As of August, it already collected P619.713 billion. -- Diane
Claire J. Jiao
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