BIR Ruling [DA (C-019) 090-10]

Facts:
Top Rate Construction and General Services Incorporated (Top Rate for brevity), a
corporation engage in the business as a contractor for construction work and
providing general services to the public covering janitorial and messengerial work,
requested that RMC 39-2007 be applicable to independent contractors like Top Rate
insofar as the treatment of agency fees/gross receipts is concerned.

The ruling:
It is basic in statutory construction that when the words of a statute are clear and
unambiguous, they must be held to mean what they plainly express. Statutes
creating a new liability increasing an existing liability shall be construed strictly. Tax
laws operate to impose burdens on the public or to restrict enjoyment of their
property. Thus, in the interpretation of such statutes it is the established rule not to
extend their provisions by implication, beyond the clear import of the language
employed, or to enlarge their scope as to include matters not specifically pointed
out.
There is nothing in the context of RMC 39-2007 which would suggest to have the
RMC applicable to manpower agencies OTHER THAN THE SECURITY AGENCIES.
Under the revised rules and regulations implemented RA 5487, the primary
obligation to pay the salaries of the security guards was placed to the clients. It is
required that the monies received by the security agency representing salaries shall
be earmarked for the security guard and shall not form part of the agencys gross
income. On such basis, the security agency is placed on a tax situation different
from other service providers