National Electrification Administration

September 24, 2019 FIRB RESOLUTION NO. 005-19 SUBJECT MATTER : National Electrification Administration WHEREAS, the National Electrification Administration (NEA) is a government-owned and/or -controlled corporation (GOCC) attached to the Department of Energy (DOE) and primarily tasked to promote sustainable development in the rural areas through rural electrification; HEITAD WHEREAS, the NEA is focused on strengthening its partners in the Rural Electrification Program, the electric cooperatives (ECs), by ensuring that they become more efficient, reliable and globally competitive; WHEREAS, the Japan International Cooperation Agency (JICA)-funded project on the improvement of equipment for power distribution in the Bangsamoro area is grounded on the Framework Agreement of the Mindanao Peace Process signed on October 2012 by the Government of the Philippines (GOP) and the Moro Islamic Liberation Front (MILF) to establish the "Bangsamoro Autonomous Government Plan" and to implement the government's policy to accelerate total electrification of the country; WHEREAS, the GOP through the National Economic and Development Authority (NEDA) entered into an agreement with the JICA for the Grant of 771 Million Yen (March 30, 2017), for the implementation of the Project for Improvement of Equipment for Power Distribution in Bangsamoro Area; WHEREAS, the Grant shall be in the form of boom trucks and distribution equipment and consulting services to be delivered to NEA's beneficiary ECs; WHEREAS, the NEA will incur VAT and custom duties amounting to PhP14,165,051.00 in connection with the Project; WHEREAS, the amount for the payment of VAT and custom duties is not included in the NEA's 2018 and 2019 budget; WHEREAS, Section 15 (c) of RA No. 11260 or the 2019 General Appropriations Act (GAA) reiterates the authority of the Fiscal Incentives Review Board (FIRB) to grant tax subsidies; and WHEREAS, tax subsidy is favored by the government because it can be quantified and is easier to monitor by the government and thus, adheres to fiscal transparency particularly in the use of government resources. NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to approve the application for tax subsidy of the NEA in the amount of FOURTEEN MILLION ONE HUNDRED SIXTY-FIVE THOUSAND FIFTY-ONE PESOS (PhP14,165,051.00) only, covering the VAT and custom duties relative to the importation of equipment and materials under the Grant Agreement, broken down as follows: Items Custom Duties VAT Total In Php A. Equipment from Japan Boom Trucks with Bucket 13,135,680.00 13,135,680.00 Boom Trucks with Digger Spare Parts and Consumables for Trucks with Bucket 302,756.00 726,615.00 1,029,371.00 Spare Parts and Consumables for Trucks with Digger Japan Flag Sticker to Pole Transformers Japan Flag Sticker to Distribution Pole Grand Total of VAT and Custom Duties 302,756.00 13,862,295.00 14,165,051.00 Provided , that the initial issuance of the corresponding Certificate of Entitlement (CES) shall be limited to the amount of ELEVEN MILLION EIGHT HUNDRED NINETY THOUSAND SIX HUNDRED SEVENTY-NINE PESOS (Php11,890,679.00) only, representing VAT with actual Statement of Account (SOA) from the Bureau of Customs: Provided further , that subsequent CES shall be issued only upon submission by the NEA to the FIRB of the required billings/SOA pertaining to the said importation of equipment and materials. Provided furthermore , that such availment shall be in accordance with the terms and conditions of Section 15 (c) of Republic Act 11260 or the 2019 General Appropriations Act, subject to the availability of funds therefor and pursuant to the terms and conditions of the Rules and Regulations to Implement the Subsidy Provision under Executive Order No. 93. (SGD.) LAURA B. PASCUA Undersecretary Department of Budget and Management (SGD.) CEFERINO S. RODOLFO Undersecretary Department of Trade and Industry (SGD.) ROSEMARIE G. EDILLON Deputy Director-General National Economic and Development Authority (SGD.) MARISSA O. CABREROS Deputy Commissioner Bureau of Internal Revenue (SGD.) REY LEONARDO B. GUERRERO Commissioner Bureau of Customs (SGD.) DONALDO M. BOO OIC-Executive Director National Tax Research Center Head, FIRB Secretariat (SGD.) ANTONETTE C. TIONKO Undersecretary of Finance Presiding Officer-FIRB