In the Philippine educational system, most government-funded scholarships (such as those from DOST, CHED, or TESDA) and private foundations require applicants to prove financial necessity. The standard proof of low-income status for non-earning individuals or those in the informal sector is the Bureau of Internal Revenue (BIR) Certificate of Tax Exemption.
This document officially certifies that the taxpayer or their guardians are exempt from filing an Income Tax Return (ITR) because their annual gross income falls below the taxable threshold.
I. Legal Basis for Exemption
Under the National Internal Revenue Code (NIRC), as amended by the TRAIN Law (Republic Act No. 10963), individuals earning a restricted amount of income are not required to file or pay income tax:
- Income Threshold: Individuals with a gross annual income not exceeding ₱250,000 are exempt from income tax.
- Substituted Filing: Employees whose tax has been correctly withheld by a single employer (and issued Form 2316) are also generally exempt from the filing of an ITR, though they may still need a certification of their status for scholarship boards.
- Non-Earning Individuals: Parents or guardians with no formal source of income must secure this certification to prove their indigent status.
II. Documentary Requirements
Before visiting the Revenue District Office (RDO), applicants must prepare the following documents. Requirements may slightly vary by RDO, but the following are standard:
- Affidavit of Low Income / No Income: A notarized document executed by the parent or guardian stating their source of income (if any) and affirming that the annual gross income is below ₱250,000.
- Barangay Certificate of Indigency: A certification from the applicant's Barangay Chairman stating that the family belongs to the low-income bracket of the community.
- Proof of Relationship: The student’s PSA Birth Certificate to prove the relationship between the student and the person requesting the exemption (the parent/guardian).
- Valid Government ID: Original and photocopy of the applicant's ID (e.g., UMID, Driver’s License, Voter’s ID, or Postal ID).
- BIR Form 1905: The "Application for Registration Information Update" (used in some RDOs for tracking purposes).
- Certification Fee and DST: Payment of the certification fee (usually ₱100.00) and the Documentary Stamp Tax (₱30.00).
III. Step-by-Step Procedure
| Step | Action | Description |
|---|---|---|
| 1 | Determine Jurisdiction | Identify the Revenue District Office (RDO) that has jurisdiction over your place of residence. You cannot apply at an RDO where you are not registered or residing. |
| 2 | Submit Documents | Proceed to the Officer of the Day or the Client Support Section of the RDO to have your documents pre-evaluated. |
| 3 | Payment of Fees | Once cleared, pay the ₱100.00 certification fee and ₱30.00 Documentary Stamp Tax (DST) at the Authorized Agent Bank (AAB) or through the RDO's collection officer. |
| 4 | Processing | Submit the proof of payment (Official Receipt) back to the receiving officer. The RDO will then process the certification. |
| 5 | Releasing | The certificate is typically released within 1 to 3 working days, depending on the RDO’s volume of transactions. |
IV. Important Considerations
Note on the First-Time Jobseekers Act (RA 11261): While this law waives fees for government certifications for jobseekers, it generally does not apply to scholarship applications. Applicants should expect to pay the standard certification fees unless the specific RDO or a local ordinance provides an exception for indigent students.
- Validity: The certificate is usually valid only for the specific purpose for which it was issued (e.g., "For Scholarship Application Purposes Only") and typically remains valid for the current taxable year.
- The "No Income" Status: If the parents are deceased or the student is self-supporting, the student may apply for the certificate in their own name, provided they can prove their status through an Affidavit.
- RDO Codes: Ensure you are at the correct RDO. If you are a registered taxpayer in one city but live in another, you may be required to transfer your registration first or apply where your records are currently held.
V. Summary of Costs
| Item | Cost (Approximate) |
|---|---|
| Certification Fee | ₱100.00 |
| Documentary Stamp Tax (DST) | ₱30.00 |
| Notarization of Affidavit | ₱100.00 - ₱300.00 (Varies by Notary) |
| Total Estimated Cost | ₱230.00 - ₱430.00 |