Armed Forces of the Philippines Commissary and Exchange Service

May 24, 2002 FIRB RESOLUTION NO. 001-02 SUBJECT : Armed Forces of the Philippines Commissary and Exchange Service WHEREAS, commissary services and post exchange facilities are intended to augment the benefits of military personnel in recognition of their work in national security and defense; WHEREAS, such services and facilities are recognized as integral adjuncts of the military sector on a global basis; WHEREAS, to ensure that said commissary services and post exchange facilities would be able to achieve their objective, the Armed Forces of the Philippines Commissary and Exchange Service (AFPCES) has applied for tax subsidy to cover the taxes due on items purchased and sold by it to its intended beneficiaries in the amount of P175,679,400; WHEREAS, there is a need to consider said application in the light of the overall level of tax subsidy to be determined by the Development Budget Coordinating Committee pursuant to Section 13 of Republic Act No. 9162 (otherwise known as the 2002 General Appropriations Act); WHEREAS, there is also a need to ensure that the benefits of these services and facilities are extended only to their intended beneficiaries; NOW, THEREFORE BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to approve the application for subsidy availment of the AFPCES in the amount of P87,839,700 only, representing the taxes on items purchased and subsequently sold by its outlets to their intended beneficiaries only, for the year 2002, in accordance with the following breakdown: Coverage Amount (Pesos) Ratio to total 1. VAT on general merchandise and alcohol/beer 62,250,000 71% 2. Excise tax on petroleum 8,650,000 10% 3. Excise tax on alcohol/beer 4,479,800 5% 4. VAT (output) 12,354,900 14% Total 87,839,700 100.00% Provided, however, that this approval is without prejudice to further application for tax subsidy by the AFPCES: Provided further , that the AFPCES shall: (1) submit to the FIRB the progress reports on the results of its programs to turn around its operations; (2) formulate a system by which commissary privileges would be confined solely to intended beneficiaries and monitor the amount of purchases made by said beneficiaries to conform with the prescribed limits; (3) submit itself to an annual audit by the Commission on Audit; (4) submit its audited financial statements for CY 2001 to the FIRB by July 31, 2002; (5) cause to be marked on all items entitled to tax subsidy herein granted the words "Tax Subsidized by the FIRB"; (6) submit the prices of commodities sold by its outlets; and (7) submit a breakdown of its sales by outlet: Provided furthermore , that such availment shall be in accordance with the terms and conditions of Section 13 of the 2002 General Appropriations Act, subject to the availability of funds therefor, pursuant to the terms and conditions of the Rules and Regulations to Implement the Subsidy Provision Under Executive Order No. 93. IcDCaS (SGD.) NIEVES L. OSORIO Undersecretary of Finance Presiding Officer FIRB Reference: FIRB-Technical Committee Meeting dated May 8, 2002 FIRB Meeting dated May 22, 2002