Supreme Court rules College of St Benilde tax-exempt
MANILA, Philippines – The Supreme Court (SC) sided with the De La Salle-College of St Benilde in the school's tax dispute with the Bureau of Internal Revenue (BIR), as it invalidated a P122.4-million tax deficiency claim by the government.
The SC 3rd Division reversed a Court of Appeals decision from 2012 that approved the BIR's claim of P122.4 million in taxes from St Benilde for the year 2002.
The SC upheld St Benilde's argument that the school should be exempt from taxes for being a non-stock, non-profit educational institution.
Section 4, Article XIV of the 1987 Constitution says, "All revenues and assets of non-stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties."
The BIR had argued that St Benilde did not comply with the constitutional requirements of being a tax-exempt educational institution, and is therefore subject to 10% income tax as a taxable proprietary educational institution.
For example, the BIR claimed St Benilde earned a massive profit of P643 million in tuition, and has P775 million in the bank.
But the SC said that based on evidence, the P643 million was not profit but the gross receipts of St Benilde in 2002.
The SC added that St Benilde also recorded expenses of as much as P582.9 million that same year.
"Considering the clear explanation of the nature of the money involved, it is evident that [St Benilde's] income is actually, directly, and exclusively used or earmarked for promoting its educational purpose," the SC said. – Rappler.com