Philippine Postal Corporation (1)

August 14, 2009 FIRB RESOLUTION NO. 016-09 SUBJECT MATTER : Philippine Postal Corporation (1) WHEREAS, the Philippine Postal Corporation (PhilPost) 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, thus resulting in its not being able to pay its Bureau of Internal Revenue's (BIR) value added tax (VAT) liability of P274,401,610.00 thereon; WHEREAS, the FIRB already suggested to the PhilPost to upgrade its postage rates to include the VAT to enable it to generate additional financial resources to take care of its tax obligations; however, the PhilPost is still coordinating with the Commission on Information and Communication Technology for its planned upgrade of postage rates; cAaETS WHEREAS, the PhilPost is likewise being assessed the Minimum Corporate Income Tax (MCIT) for the year 2008 in the amount of P3,245,967.26; 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 SEVENTY SEVEN MILLION SIX HUNDRED FORTY SEVEN THOUSAND FIVE HUNDRED SEVENTY SEVEN AND 26/100 PESOS (P277,647,577.26) only broken down as follows: Taxable Year/Type of Tax Amount (In Pesos) 2009 Value Added Tax 274,401,610.00 2008 Minimum Corporate Income Tax 3,245,967.26 Grand Total 277,647,577.26 ============= Provided, however, that: (a) the initial issuance of the corresponding Certificate of Entitlement to Subsidy (CES) shall be limited to the amount of P131,915,382.26 only, representing the actual assessment of the BIR on its MCIT for 2008 and VAT for the first and second quarters of 2009; 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 2009 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. aHSAIT (SGD.) GIL S. BELTRAN Undersecretary of Finance Presiding Officer FIRB Reference: Joint FIRB-Technical Committee Meeting dated August 14, 2009.