Philippine Postal Corporation (1)

December 8, 2011 FIRB RESOLUTION NO. 014-11 SUBJECT MATTER : Philippine Postal Corporation (1) WHEREAS, the Philippine Postal Corporation (PhlPost) was created under Republic Act No. 7354 to operate a nationwide postal system with a network that extends or makes available provisions of mail services at affordable prices; WHEREAS, the PhilPost did not impose the Value-Added Tax (VAT) on its domestic postal services in 2011, thus resulting in its not being able to pay its Bureau of Internal Revenue's (BIR) VAT liability of P293,328,293.00 thereon; WHEREAS, the PhilPost is likewise being assessed the Minimum Corporate Income Tax (MCIT) for the year 2010 in the amount of P2,539,925.00; WHEREAS, it is the policy of the Fiscal Incentives Review Board (FIRB) not to grant tax subsidy on withholding tax liabilities specially if they were previously withheld but not remitted to the BIR; WHEREAS, Section 272 of the National Internal Revenue Code (NIRC) as amended, provides for the punishment by a fine and/or imprisonment for GOCCs violation of the withholding tax provisions; WHEREAS, the PhilPost does not have the financial capacity to assume the said VAT and MCIT assessments; 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 FIVE MILLION EIGHT HUNDRED SIXTY EIGHT THOUSAND TWO HUNDRED EIGHTEEN PESOS (P295,868,218.00) only, broken down as follows: Type of Tax/Taxable Year Amount (In Pesos) MCIT 2010 2,539,925.00 VAT 2011 293,328,293.00 1st Quarter 72,439,716.70 2nd Quarter 67,895,889.78 3rd Quarter 70,865,826.77 4th Quarter 82,126,859.75 Total Assessments P295,868,218.00 ============= Provided, however, that the corresponding Certificate of Entitlement to Subsidy (CES) shall be issued only upon submission by the PhilPost to the FIRB of its actual tax liability based on BIR assessments/billings on its MCIT for 2010 and VAT for 2011: Provided further, That the grant of such tax subsidy shall be in accordance with the terms and conditions of Section 13 of 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 Tax Subsidy Provisions Under Executive Order No. 93. aITECA BE IT FURTHER RESOLVED AS IT IS HEREBY RESOLVED, to deny with finality the request for tax subsidy to cover the withholding tax on compensation income of employees (November to December 2011) which were withheld but not remitted to the BIR. The BIR, motu propio, may impose the appropriate sanctions under Section 272 of the NIRC, as amended. (SGD.) GIL S. BELTRAN Undersecretary of Finance Presiding Officer-FIRB