Philippine National Railways

October 22, 2020 FIRB RESOLUTION NO. 009-20 SUBJECT MATTER : Philippine National Railways WHEREAS, the Philippine National Railways (PNR), is a state-owned railway system, organized under the Department of Transportation and Communications (DOTC) as an attached government owned and/or controlled corporation (GOCC), and is part of the overall public transport system in the metropolis; WHEREAS, the PNR is mandated to link key cities within the Philippines, as an instrument in national socio-economic development and as the backbone of Metro Manila's regional rail services, extending to the suburbs and provinces; WHEREAS, the PNR procures diesel multiple units (DMUs) and diesel hydraulic locomotives with passenger cars to expand the capacity of train service for the public commuters; WHEREAS, two train sets with three-car formation each train set arrived on December 8, 2019 and two train sets with four-car formation each train set arrived on February 9, 2020, incurring a total of P112,796,059.00 value-added tax (VAT); WHEREAS, the PNR does not have the financial capacity to assume the VAT of the DMUs without impairing its railway operations; WHEREAS, Section 15 (c) of RA 11465 or the 2020 General Appropriations Act (GAA) reiterates the authority of the Fiscal Incentives Review Board 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 PNR in the amount of ONE HUNDRED TWELVE MILLION SEVEN HUNDRED NINETY-SIX THOUSAND AND FIFTY-NINE PESOS (P112,796,059.00) only, covering the VAT on its procurement of train sets as follows: DACcIH Particulars VAT Two train sets with three-car formation P54,485,774.00 Two train sets with four-car formation 58,310,285.00 Total P112,796,059.00 Provided , that the issuance of the corresponding Certificate of Entitlement to Subsidy shall be limited to the amount of ONE HUNDRED TWELVE MILLION SEVEN HUNDRED NINETY-SIX THOUSAND AND FIFTY-NINE PESOS (Php112,796,059.00) only, representing the VAT with actual Statements of Account from the Bureau of Customs. Provided further , that the equipment for which tax subsidy is granted shall form part of the regular inventory of the PNR as certified to by its resident Commission on Audit auditor and Project Station/Operating Area manager. Provided furthermore , 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 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.) MARLENE LUCERO-CALUBAG OIC-Executive Director National Tax Research Center Head, FIRB Secretariat (SGD.) ANTONETTE C. TIONKO Undersecretary of Finance Presiding Officer-FIRB