How are ambiguities in tax laws construed?
Ambiguities in tax laws are to be resolved against the government. Tax laws are considered as burdens, and these burdens are never presumed.
However, if the ambiguity is in an exempting provision of the law, then, the ambiguity should be resolved against the taxpayer. Because taxes are the lifeblood of the government, anything which tends to be in derogation of the lifeblood doctrine should be strictly construed against taxpayers.
Taxation is the rule and exemption is the exception. Thus, any claim for tax exemption must be proven to be granted by law and expressed in clear and unambiguous terms. Tax exemptions are never presumed, and the burden is upon the taxpayer to establish the basis of his claim for exemption.
However, the rule on strictissimi juris construction of tax exemptions does not apply in the following situations:
[1] When the statute granting the exemption expressly provides for a liberal interpretation;
[2] When the exempting law refers to special taxes relating to special cases and affecting special classes of persons;
[3] When the exemption is in favor of traditional exemptees such as religious and charitable organizations;
[4] When the exemption is granted in favor of the government, its political subdivisions or instrumentalities;
[5] When the exemption refers to public properties owned by the State or its political subdivisions; and
[6] When the taxpayer falls within the purview of the exemption by clear legislative intent. (Dimaampao, Tax Principles and Remedies)
However, the rule on strictissimi juris construction of tax exemptions does not apply in the following situations:
[1] When the statute granting the exemption expressly provides for a liberal interpretation;
[2] When the exempting law refers to special taxes relating to special cases and affecting special classes of persons;
[3] When the exemption is in favor of traditional exemptees such as religious and charitable organizations;
[4] When the exemption is granted in favor of the government, its political subdivisions or instrumentalities;
[5] When the exemption refers to public properties owned by the State or its political subdivisions; and
[6] When the taxpayer falls within the purview of the exemption by clear legislative intent. (Dimaampao, Tax Principles and Remedies)
