GSIS

October 22, 2020 FIRB RESOLUTION NO. 008-20 SUBJECT MATTER : GSIS WHEREAS, the Government Service Insurance System (GSIS) is a government instrumentality primarily mandated to provide a defined benefit pension fund for employees in the public sector to insure against the occurrence of certain contingencies; WHEREAS, the GSIS, as a state insurance institution, is also mandated to insure coverage of all government assets and properties from any insurable interests; WHEREAS, in strengthening the viability of the fund, the State declared it as the policy to maintain and preserve at all times the actuarial solvency of the GSIS; WHEREAS, Section 39 of Republic Act (RA) No. 8291 exempts the GSIS from all taxes, assessments, and levies arising from acquired assets, revenues, and benefits paid; WHEREAS, Section 86 (r) of RA 10963 [Tax Reform for Acceleration and Inclusion (TRAIN) law, approved on December 19, 2017 and made effective on January 1, 2018] provides for the repeal of the value-added tax (VAT) exemption of certain government-owned and/or -controlled corporations (GOCCs), state universities and colleges (SUCs) and other government instrumentalities (GIs), including the GSIS; WHEREAS, under the same law, the repealed VAT exemption is replaced by a targeted tax subsidy as administered by the Fiscal Incentives Review Board (FIRB); IDSEAH WHEREAS, the VAT obligations of the concerned government entities shall be chargeable to the Tax Expenditure Fund pursuant to the TRAIN law; WHEREAS, the GSIS funds are special funds essentially used for purposes of benefiting the public sector employees and payment of the VAT would shorten the actuarial life of the said funds; WHEREAS, the request of the GSIS for the tax subsidy covering its 2018 VAT obligations in the amount of P670,812,634.11, cannot be given due course as the "Tax Expenditure Subsidy is automatically appropriated and can only be valid for release and disbursement during the current year to cover the payment of the current year's obligations only" and as such, the said VAT obligation should instead be requested as money claim before the Commission on Audit (COA) pursuant to Rule I, Section 1 (18) (b) of the 2009 Revised Rules of Procedure of the COA; WHEREAS, Section 15 (c) of RA 11465 or the 2020 General Appropriations Act (GAA) reiterates the authority of the FIRB to grant tax subsidies; WHEREAS, Section 15 (c) of RA 11465 or the 2020 General Appropriations Act (GAA) reiterates the authority of the FIRB to grant tax subsidies; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to grant tax subsidy to the GSIS in the amount of FOUR HUNDRED FIFTY-NINE MILLION FOUR HUNDRED THIRTY THOUSAND FORTY-ONE AND 81/100 PESOS (P459,430,041.81) only, to cover for its VAT obligations for 2019 4th quarter) and 2020. Provided , that the corresponding Certificate of Entitlement to Subsidy shall be issued upon the submission by the GSIS to the FIRB of its actual tax liability based on the billings/assessments/tax returns issued by the Bureau of Internal Revenue: Provided further , that such availment shall be in accordance with the terms and conditions of Section 15 (c) of RA 11465 or the 2020 GAA, 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. (SGD.) LAURA B. PASCUA Undersecretary Department of Budget and Management (SGD.) CEFERINO S. RODOLFO Undersecretary Department of Trade and Industry (SGD.) ROSEMARIE G. EDILLON Undersecretary 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.) MARLENE LUCERO-CALUBAG OIC-Executive Director National Tax Research Center Head, FIRB Secretariat (SGD.) ANTONETTE C. TIONKO Undersecretary of Finance Presiding Officer-FIRB