FIRB circularizes the amendments of CREATE IRR
Other Relevant Tax Updates:
TAX & BUSINESS-RELATED NEWS [AUGUST 21-28]
FIRB CIRCULARIZES THE AMENDMENTS OF CREATE LAW IRR
CTA CASE ON NON-RECEIPT OF ASSESSMENT NOTICE
DOJ OPINION ON TERMINAL FEES & AUTHORITY OF COA TO AUDIT POGO
SUPREME COURT CASE ON GROSS IGNORANCE OF THE LAW
1. TAX & BUSINESS-RELATED NEWS [AUGUST 21-28]
1. Bill provides free tuition to government employees pursuing further studies
2. Bill requiring companies to hire senior citizens filed
3. Onsite, online or hybrid? Two tech schools choose differing paths
4. Court of Appeals upholds search warrants in Kapa’s P50 billion Ponzi scam
5. Brilliant or risky? Slater Young gets flak for latest real-estate project in Cebu
6. PRA seeks clarity on proposed tax on single-use plastic products
7. Overloading on NLEX tackled in BOI meet
8. Grab says PH drivers to earn more from upcoming app tweaks
9. PCU: Alleged violations of CHED policies have no bases
10. Travelers who miss flights can complain to DOJ, says exec
11. Floating solar plant on Laguna Lake will be world’s largest: proponent
12. PEZA sees amendments validating perks won by pre-CREATE locators
13. Amendment to CREATE’s IRR no impact on PEZA, says chief
14. 10 Malabon businessmen get SSS notices of violation for non-remittance of workers’ contributions
15. Unregistered tourism workers rekindle boundary dispute between 2 Aklan towns
16. To cater to VisMin market: Pinoy logistics firm invests P100 million for Cebu hub
17. GCash waives QR fees for sari-sari, small vendors, online sellers
18. Sandiganbayan convicts 10 former DOF personnel of graft
19. ERC extends further suspension of FIT-All collection
20. Marcos OKs Mindoro-Palawan power interconnection
21. BSP retains maximum 3% per month interest rate on credit card transactions
22. CA member cautions Herbosa about commenting on Vape Law
23. JFC says Tiong Bahru Bakery, Common Man Coffee Roasters won’t compete with CBTL
24. ILOILO CITY’S TOP TAXPAYERS NAMED
25. Crash and burn: Dennis Uy’s debt-laden, cash-strapped Phoenix Petroleum sees losses triple to over P3 billion
2. FIRB CIRCULARIZES THE AMENDMENTS OF CREATE LAW IRR
Fiscal Incentives Review Board (FIRB) circularizes the amendments introduced in Rule 18, Section 5 of the Implementing Rules and Regulations of Title XIII of the Republic Act (R.A.) No. 8424, otherwise known as the “National Internal Revenue Code of 1997”, as amended by R.A. 11534 or the “Corporate Recovery and Tax Incentives for Enterprises (CREATE ACT).”
Specifically, the amendments provide that the Registered Export Enterprises (REEs) whose income tax-based incentives have expired, may continue to enjoy the VAT-zero rating on local purchases until the electronic sales reporting system of the Bureau is fully operational or until the expiration of the transitory period, whichever comes earlier. Further, a Registered Business Enterprise (RBE) classified as a Domestic Market Enterprise (DME) located inside the economic or freeport zone during the transitory period will be allowed to register as a VAT taxpayer.
The amendment was published in Business World on August 15, 2023.
3. CTA CASE ON NON-RECEIPT OF ASSESSMENT NOTICE
TAXPAYER’S NON-RECEIPT OF THE ASSESSMENT NOTICE WOULD BE TRANSGRESSIVE OF HIS RIGHT TO DUE PROCESS ON ASSESSMENT
Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review challenging the earlier Decision and Resolution of the Court in Division, which nullified the deficiency tax assessments issued by the Petitioner against the Respondent Linden Suites, Inc. The Petitioner asserted that the Preliminary Assessment Notice (PAN) was served to, and received by the Respondent’s alleged staff, and was served by registered mail; thus, due process on the service of PAN was duly complied with. On the other hand, the Respondent countered that no PAN was validly served to, and received by it, offensive of its right to due process on assessments. In ruling, the Court shares the Respondent’s view. Glaringly, Revenue Officer (RO) Villanueva and Group Supervisor (GS) Hagan are the persons clothed with personal knowledge of the events regarding the BIR’s purported service of, and the Respondent’s receipt of the PAN. These individuals failed to take the witness stand. Instead, the Petitioner picked RO Padit to identify and testify on the contents of said PAN and Affidavit of Service. RO Padit is without personal knowledge of the circumstances surrounding the purported service of and receipt by Respondent of the PAN. Such being the case, the pieces of evidence adduced by the Petitioner to demonstrate service and receipt of the PAN are hearsay evidence. The BIR, too, failed to validly serve the PAN, through a registered mail, to Respondent. No witness was presented to identify the Registry Receipt and even authenticate the signature appearing thereon. Even a certification from the postmaster was neither offered as evidence. Consequently, the Petition was DENIED. [COMMISSIONER OF INTERNAL REVENUE VS. LINDEN SUITES, INC., AS REPRESENTED BY EUGENE U. BALCOS, CTA EN BANC CASE NO. 2551, JULY 4, 2023]
4. DOJ OPINION ON TERMINAL FEES & AUTHORITY OF COA TO AUDIT POGO
TERMINAL FEES ARE TRUST FUND HELD BY MIAA THUS CANNOT BE USED FOR CAPEX
The Manila International Airport Authority (MIAA) is seeking guidance on whether it can use the unrefunded Passenger Service Charges (PSC) on unused airline tickets, which are being held in trust by the MIAA for the account of passengers, to finance the MIAA’s capital expenditure requirements. In reply, the Department of Justice (DOJ) cannot act on the request for reasons of propriety and official courtesy. Nonetheless, for information and guidance only, Section 3(4) of the Presidential Decree (P.D.) No. 1445, otherwise known as the “Government Auditing Code of the Philippines” defines a trust fund, and under Section 4(3) of said law, trust funds shall be made available and may be spent only for the specific purpose for which the trust was created, or the funds received. Clearly, the unrefunded PSCs in question are funds which, while considered “government funds,” are held by MIAA merely as custodian to address the refund claims to be made by passengers. The MIAA acts as the trustee on behalf of the passengers and is not free to unilaterally utilize such funds. It is suggested that the MIAA seek the opinion of the Department of Budget and Management (DBM) or the Commission on Audit (COA) on this matter. [DOJ OPINION NO. 31 SERIES OF 2023, JULY 25, 2023]
COA CAN AUDIT THE GROSS TAX BASE OF POGO PENDING 3RD PARTY SERVICE PROVIDER
The Commission on Audit (COA) is requesting confirmation of its power to audit the Gross Gaming Receipts (GGR) of the Philippine Offshore Gaming Operators (POGO), as per the Philippine Amusements and Gaming Corporation (PAGCOR). In reply, the Department of Justice declined the request for reasons of propriety and official courtesy. Nonetheless, for information and guidance only, Section 8 of Republic Act No. 11590, otherwise known as POGO Tax, provides that the conduct of an audit of POGO should be done by a third-party platform. The same section also provides that the COA may conduct a post-audit or independent verification of the GGR determined by the third-party auditor. The conduct of the audit of the GGR of the POGO is necessary to ensure the proper gaming tax on services rendered and regulatory fees are levied and collected. Thus, to ensure that the aim and objective of the law are met, there appears to be legal basis and sound fiscal reasons for COA to audit the GGR of the POGO, while PAGCOR is still in the process of procuring the services of a qualified third-party audit platform. [DOJ OPINION NO. 27 SERIES OF 2023, JUNE 30, 2023]
5. SUPREME COURT CASE ON GROSS IGNORANCE OF THE LAW
[A PATENT DISREGARD OF SIMPLE, ELEMENTARY & WELL-KNOWN RULES CONSTITUTES GROSS IGNORANCE OF THE LAW] [SEC STANDS AS A CO-EQUAL BODY OF RTC]
Complainant Securities and Exchange Commission (SEC) filed a Complaint charging the Respondent Hon. Oscar P. Noel Jr., Presiding Regional Trial Court (RTC) Judge of the “Kapa Investment case,” with Gross Ignorance of the Law. The complainant contended that it is a co-equal body of RTCs, hence, the RTCs cannot interfere with or overturn its rulings. As such, the Respondent’s acts of issuing a Temporary Restraining Order (TRO) and Writ of Preliminary Investigation (WPI) against the Cease-and-Desist Order (CDO) constitute Gross Ignorance of the Law. The Respondent insisted that the RTC has jurisdiction over the subject case, considering that “Kapa” raised the constitutional issue of free exercise of religion, and did not delve on trading and securities. In ruling, the Court held that the SEC stands as a co-equal body of the RTCs; hence, all orders and issuances issued by the SEC in the exercise of such jurisdiction may not be interfered with, let alone overturned, by the RTCs. The Court finds the Respondent’s insistence untenable for the simple reason that the Respondent cannot feign ignorance of the fact that his issuance of a TRO and WPI in the subject case will have the effect of restraining the enforcement of the CDO issued by the SEC, a co-equal body. The Respondent should have refrained from acting on the subject case. More significantly, the Respondent violated the Doctrine on Primary Jurisdiction. Consequently, the Court finds the Respondent GUILTY of Gross Ignorance of the Law. He is SUSPENDED from office without salary and other benefits for a period of two (2) years. [SECURITIES & EXCHANGE COMMISSION, REPRESENTED BY COMMISSIONER EMILIO B. AQUINO VS. HON. OSCAR P. NOEL, JR. PRESIDING JUDGE, BRANCH 35, REGIONAL TRIAL COURT, GENERAL SANTOS CITY, SOUTH COTABATO, A.M. NO. RTJ-23-029, JANUARY 28, 2023, UPLOADED ON JUNE 13, 2023]
Bill provides free tuition to government employees pursuing further studies [The Philippine Star, August 28, 2023]
House Bill (HB) 8834 provides free tuition benefits to career and non-career service government employees, and covers a master’s program of a maximum of two years in any SUC where they have successfully sought admission.
Bill requiring companies to hire senior citizens filed [The Manila Times, August 28, 2023]
Under the bill, at least one percent of all the positions in government agencies, offices, or corporations shall be reserved for qualified senior citizens. Also, private corporations with over 100 employees shall reserve at least one percent of their positions for qualified senior citizens.
Onsite, online or hybrid? Two tech schools choose differing paths [ABS-CBN News, August 28, 2023]
Two of these colleges are the Mapua Malayan Digital College (MMDC) which was launched just last year, and the CIIT College of Arts and Technology, founded in 2007.
Court of Appeals upholds search warrants in Kapa’s P50 billion Ponzi scam [The Philippine Star, August 28, 2023]
In a resolution promulgated on Aug. 16, the CA’s 13th Division denied the motion for reconsideration filed by Kapa and its representative, pastor Joel Apolinario, against the search warrants issued by the Manila RTC and implemented by the National Bureau of Investigation (NBI) in several Kapa offices in 2019.
Brilliant or risky? Slater Young gets flak for latest real-estate project in Cebu [PEP, August 27, 2023]
For context, the property, called The Rise at Monterrazas, will be built on the mountainside in Guadalupe, Cebu City.
PRA seeks clarity on proposed tax on single-use plastic products [The Philippine Star, August 27, 2023]
The Philippine Retailers Association (PRA) wants clarity on how the proposed single-use plastic tax will be implemented with the measure expected to affect the retail industry, which uses plastics for its packaging.
Overloading on NLEX tackled in BOI meet [The Philippine Star, August 27, 2023]
The Board of Investments (BOI) has convened a meeting involving various agencies to tackle the concerns raised by NLEX Corp. and the local government units of Pampanga and Bulacan regarding the issue of overloaded trucks on the North Luzon Expressway.
Grab says PH drivers to earn more from upcoming app tweaks [Inquirer Mobile, August 26, 2023]
Driver-partners of Grab Philippines will be able to identify areas with high demand for ride-hailing bookings in real time soon with the launch of a new feature designed to maximize daily earnings.
PCU: Alleged violations of CHED policies have no bases [GMA News Online, August 24, 2023]
PCU issued the statement in light of the order of CHED Chairman Prospero de Vera III for the university to “immediately cease and desist” from offering and implementing programs that do not have a permit to conduct transnational higher education, distance education, and fully online classes.
Travelers who miss flights can complain to DOJ, says exec [GMA News Online, August 24, 2023]
Justice Undersecretary Nicholas Ty said there is a 45-second limit for the primary inspection and a limit of 15 minutes for the secondary inspection.
Floating solar plant on Laguna Lake will be world’s largest: proponent [ABS-CBN News, August 24, 2024]
The floating solar power plant set to be developed on the Laguna Lake will be the world’s largest, according to its proponent SunAsia Energy Systems.
PEZA sees amendments validating perks won by pre-CREATE locators [BusinessWorld, August 23, 2023]
PHILIPPINE Economic Zone Authority (PEZA) Director General Tereso O. Panga said amendments being proposed for the Corporate Recovery and Tax Incentives for Enterprises (CREATE) implementing rules are expected to strengthen the argument for the validity of incentives granted to locators before CREATE came into force.
Amendment to CREATE’s IRR no impact on PEZA, says chief [GMA News Online, August 23, 2023]
“There’s not much value to us on the recent amendment introduced by FIRB (Fiscal Incentives Review Board) because it caters more to domestic market oriented companies that are located in the eco-zones,” Panga told reporters on the sidelines of an event in Pasay City.
10 Malabon businessmen get SSS notices of violation for non-remittance of workers’ contributions [The Manila Times, August 23, 2023]
Carried out by SSS-Malabon, National Capital Region-North Division, the operation was held in the villages of San Agustin, Concepcion, Tinajeros, Potrero and Tugatog on Wednesday. The notices were issued to businessmen in food and services, the SSS said.
Unregistered tourism workers rekindle boundary dispute between 2 Aklan towns [Rappler, August 23, 2023]
A local government’s ongoing crackdown on unregistered tourism workers has sparked the resurgence of a long-standing boundary dispute between the municipalities of Nabas and Malay, the very town in which Boracay Island is situated.
To cater to VisMin market: Pinoy logistics firm invests P100 million for Cebu hub [The Freeman, August 23, 2023]
Filipino-owned logistics firm Airspeed International Corporation is making Cebu its hub for aggressive expansion plans in the Visayas and Mindanao region.
GCash waives QR fees for sari-sari, small vendors, online sellers [ABS-CBN News, August 23, 2023]
The 1.5 percent transaction fee is waived up to P100,000 in gross sales, GCash added.
Sandiganbayan convicts 10 former DOF personnel of graft [Rappler, August 22, 2023]
The Sandiganbayan said that the defendants failed to exercise even ordinary diligence in evaluating, processing and approving particular TCCs.
Marcos OKs Mindoro-Palawan power interconnection [ABS-CBN News, August 22, 2023]
Palace briefer Daphne Oseña-Paez said the President made the decision during a sectoral meeting earlier in the Palace, where concerns on missionary electrification were discussed.
BSP retains maximum 3% per month interest rate on credit card transactions [GMA News Online, August 22, 2023]
This means the maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder remains at 3% per month or 36% per year, according to the central bank.
CA member cautions Herbosa about commenting on Vape Law [GMA News Online, August 22, 2023]
CA member and 1-Sagip party-list Representative Rodante Marcoleta issued the statement in response to Herbosa’s comment cautioning the government against marketing the Philippines to multinational corporations as a manufacturing hub for vape and heated tobacco products (HTPs) as this “may lead to the worsening of the tobacco epidemic in the country.”
JFC says Tiong Bahru Bakery, Common Man Coffee Roasters won’t compete with CBTL [ABS-CBN News, August 22, 2023]
In an earlier disclosure to the Philippine Stock Exchange, the country’s largest restaurant operator said it formed a joint venture with Food Collective Pte Ltd (FCPL) to bring Tiong Bahru Bakery and Common Man Coffee Roasters to the Philippines.
ILOILO CITY’S TOP TAXPAYERS NAMED [Panay News, August 22, 2023]
The city government will honor the city’s top taxpayers for 2022. It is one of the highlights of Iloilo City’s 86th Charter Day celebration on Aug. 25.
Crash and burn: Dennis Uy’s debt-laden, cash-strapped Phoenix Petroleum sees losses triple to over P3 billion [Bilyonaryo, August 21, 2023]
Based on its just released 2022 financial statement, PNX losses skyrocketed 269 percent year on year to P3.2 billion.