Philippine Postal Corporation (1)

June 28, 2012 FIRB RESOLUTION NO. 007-12 SUBJECT MATTER : Philippine Postal Corporation (1) WHEREAS, the Philippine Postal Corporation (PhlPost) was created under Republic Act (RA) No. 7354 to operate a nationwide postal system with a network that extends or makes available provisions of mail services at affordable prices; WHEREAS, in view of this mandate, the PhilPost did not impose the value-added tax (VAT) on its domestic postal services in 2012, thus resulting in its VAT liability of PhP290,567,402.00 thereon; WHEREAS, the imposition of VAT on its domestic postal services will increase the postage rates and make it hard for the PhilPost to survive the competition from private, multi-national and local couriers in the ever changing postal courier and logistics market; WHEREAS, the PhilPost is likewise being assessed the Minimum Corporate Income Tax (MCIT) for the year 2011 in the amount of PhP8,970,849.00; TcIHDa WHEREAS, the PhilPost does not have the financial capacity to assume the said VAT and MCIT assessments; WHEREAS, the Department of Social Welfare and Development (DSWD) has engaged the services of the PhilPost for the distribution of cash grants under the Conditional Cash Transfer (CCT) Program of the government in remote areas; WHEREAS, to date, the CCT Program caters to 170,000 beneficiaries, in support of the poverty reduction and social development objectives of the Government; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to approve the application for tax subsidy of the PhilPost in the amount of TWO HUNDRED NINETY NINE MILLION FIVE HUNDRED THIRTY EIGHT THOUSAND AND TWO HUNDRED FIFTY ONE PESOS (PhP299,538,251.00) only, broken down as follows: Type of Tax/Taxable Year Amount (In PhP) MCIT 2011 8,970,849.00 VAT Actual Assessment 139,603,349.24 1st Quarter of 2012 70,597,135.24 2nd Quarter of 2012 69,006,214.00 Total Actual Assessments 148,574,198.24 VAT Estimated Assessments 150,964,052.76 3rd Quarter of 2012 76,664,831.76 4th Quarter of 2012 74,299,221.00 Total Assessments 299,538,251.00 ============ Provided, however , that: (a) the initial issuance of the Certificate of Entitlement to Subsidy (CES) shall be limited to the amount of PhP148,574,198.24 only, representing the actual assessment of the BIR on its MCIT for 2011 and VAT for the first and second quarters of 2012; and (b) the subsequent CES shall be issued upon the submission by the PhilPost to the FIRB of its actual VAT liability per quarter as reflected in its quarterly VAT return: Provided further , that the grant of such tax subsidy shall be in accordance with the terms and conditions of Section 13 of the 2012 General Annual Appropriations Act (GAA), subject to the availability of funds therefor, pursuant to the terms and conditions of the Rules and Regulations to Implement the Tax Subsidy Provisions Under Executive Order (EO) No. 93. HTCIcE (SGD.) LAURA B. PASCUA Undersecretary Department of Budget and Management (SGD.) ADRIAN S. CRISTOBAL, JR. Undersecretary Department of Trade and Industry Subsidy for VAT should be the last time. FIRB has earlier proposed that postal rates be VAT inclusive (SGD.) MARGARITA R. SONGCO Deputy Director-General National Economic and Development Authority (SGD.) MARISSA O. CABREROS Assistant Commissioner Bureau of Internal Revenue (SGD.) RAMON G. CUYCO Director Bureau of Customs (SGD.) TRINIDAD A. RODRIGUEZ OIC-Executive Director National Tax Research Center Head, FIRB Secretariat (SGD.) GIL S. BELTRAN Undersecretary of Finance Presiding Officer-FIRB