Armed Forces of the Philippines Commissary and Exchange Service (2)

June 7, 2011 FIRB RESOLUTION NO. 008-11 SUBJECT MATTER : Armed Forces of the Philippines Commissary and Exchange Service (2) 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 achieve their objective, the Armed Forces of the Philippines Commissary and Exchange Service (AFPCES) has applied for tax subsidy in the amount of P310,010,862.95 to cover the taxes due on items it has purchased and sold to its intended beneficiaries, for the year 2011; WHEREAS, there is also a need to ensure that the benefits of these services and facilities are extended only to their intended beneficiaries; WHEREAS, FIRB Resolution No. 3-11 extended the validity of Certificate of Entitlement to Subsidy (CES) No. 0031 from December 31, 2010 to June 30, 2011 thereby leaving a balance of P34,652,417.95 worth of tax subsidy still available for purchases made in 2011; WHEREAS, in the years 2009-2010, the AFPCES has utilized only between 55% to 62% of the tax subsidy granted to it within the year the same was granted, thus, making it necessary to extend the validity period of the corresponding CES to the succeeding year to enable its full utilization; WHEREAS, there is a need to ensure a more effective tax subsidy allocation and utilization without prejudice to other Government Owned and Controlled Corporations (GOCCs) which are also applying for tax subsidy to settle their respective tax obligations; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to approve the application of the AFPCES for tax subsidy in the amount of ONE HUNDRED NINETY TWO MILLION SEVEN HUNDRED FIFTY THOUSAND NINE HUNDRED TWENTY TWO AND 84/100 (P192,750,922.84) only, representing the VAT on general merchandise and excise tax on petroleum products purchased and subsequently sold by its outlets to their intended beneficiaries only, broken down as follows; ISDCHA Coverage Amount in Pesos Ratio to Total (%) Value Added Tax (VAT) 184,346,982.60 95.64 General Merchandise 148,620,537.37 80.62 Medicine and Medical Supplies 21,568,596.96 11.70 Diesel/TBA/Lubricants/Gasoline 14,157,848.27 7.68 Excise Tax on Gasoline 8,403,940.24 4.36 Total 192,750,922.84 100.00 ============ ===== Provided, however, that this approval is without prejudice to further application for tax subsidy by the AFPCES once the initial grant has been fully utilized: Provided further, that the AFPCES shall: (1) submit to the FIRB the details of its system to ensure that commissary privileges are confined solely to their intended beneficiaries, including the following: (a) breakdown of customers by type/category; (b) quantity and purchase limits; and (c) identification requirements for customers; (2) submit to the FIRB the results of the annual audit of its operations by the Commission on Audit or a reliable independent auditor; and (3) cause to be marked on all items entitled to tax subsidy herein granted the words "Tax Subsidized by the Philippine Government, Not for Resale": Provided, furthermore, that such availment shall be in accordance with the terms and conditions of Section 13 of Republic Act (RA) No. 10147 or the 2011 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 and Bureau of Internal Revenue Regulations No. 31-2003. (SGD.) LAURA B. PASCUA Undersecretary Department of Budget and Management (SGD.) CRISTINO L. PANLILIO Undersecretary Department of Trade and Industry (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.) DANTE V. SY Executive Director National Tax Research Center Head, FIRB Secretariat (SGD.) GIL S. BELTRAN Undersecretary of Finance Presiding Officer-FIRB