Intercontinental Broadcasting Corporation

November 12, 2021 FIRB RESOLUTION NO. 26-21 SUBJECT MATTER : Intercontinental Broadcasting Corporation WHEREAS , the Intercontinental Broadcasting Corporation (IBC-13) is a government-owned and/or -controlled corporation operating on a 25-year franchise granted by the Philippine Congress on September 2, 2000 through Republic Act (RA) No. 8954; WHEREAS , its primary purpose under its franchise is to carry on the business as operator and/or proprietor of instruments and media of mass communication such as radio, television, and/or telecommunication stations on a commercial and/or sustaining basis in any part of the Philippines; WHEREAS , the IBC-13 applied for tax subsidy with the Fiscal Incentives Review Board (FIRB) to cover its tax amnesty payment in the amount of P8,563,992.44, consisting of P1,952,336.50 withholding tax, P1,754,787.92 income tax, and P4,856,868.32 penalties, per BIR Certificate of Tax Delinquencies/Tax Liabilities dated March 02, 2021; WHEREAS , the enactment of RA 11213, otherwise known as the Tax Amnesty Act, grants taxpayers a one-time opportunity to settle their tax obligations on all unpaid internal revenue taxes imposed by the national government for taxable year 2017 and prior years, and thus, provide additional revenues to support government projects. The entitlement to tax amnesty, however, shall only cover basic taxes as assessed by the Bureau of Internal Revenue (BIR), with amnesty rates of 100% for withholding tax and 40% on income tax, exclusive of interests, penalties, and surcharges; WHEREAS , BIR Revenue District Office No. 39-South Quezon City allowed the IBC-13 to settle its payment for its application for tax amnesty upon the approval of the FIRB of its application for tax subsidy; WHEREAS , the IBC-13 also includes in its application for tax subsidy its unpaid internal tax liabilities for taxable years 2007, 2009, 2010, and 2014 to 2019 amounting to P294,791,991.57 per BIR Notice of Discrepancy dated April 26, 2021 and further supported by Final Decision on Disputed Assessment (FDDA) No. 039-2021-B020-19 dated August 31, 2021, that showed tax liabilities amounting to P277,435,818.54; WHEREAS , Paragraph 2.3 of the Department of Finance (DOF) and Department of Budget and Management (DBM) Joint Circular No. 002-2020 defines national internal revenue taxes as any form of imposition to which taxpayers are legally liable under the National Internal Revenue Code (NIRC) of 1997, as amended, subject to the provisions of RA 11213, or the Tax Amnesty Act, excluding interests, surcharges and penalties. Also, paragraph 4.3 thereof provides that applications for tax subsidy shall not cover the payment of prior years' tax obligations, such as tax obligations that were already due for payment in the preceding years unless the tax liabilities arises from FDDA issued by the BIR within the year which shall be considered as current year tax obligation; WHEREAS , Section 15 (c) of RA 11518, or the "General Appropriations Act (GAA) for Fiscal Year (FY) 2021," reiterates the authority of the FIRB to grant tax subsidies. NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED , to grant to the IBC-13 tax subsidy in the amount of P2,654,251.67 only for its tax amnesty payment covering 100% of basic withholding tax and 40% of basic income tax liabilities for taxable years 2005 and 2008 and P115,181,143.66 unpaid tax liabilities for taxable years 2007, 2009, 2010, and 2014 to 2019, totaling to ONE HUNDRED SEVENTEEN MILLION EIGHT HUNDRED THIRTY-FIVE THOUSAND THREE HUNDRED NINETY-FIVE AND 33/100 PESOS (P117,835,395.33) only: Particulars Amount of tax subsidy applied 1/ Basic tax assessed/ deficiency Amount of tax subsidy to be granted to the IBC-13 Tax obligations under its tax amnesty application 8,563,992.74 3,707,124.42 2,654,251.67 2/ Unpaid tax liabilities for various taxable years 277,435,818.53 115,181,143.66 115,181,143.66 Total 285,999,811.27 118,888,268.08 117,835,395.33 Notes: 1/ Includes basic tax assessed/deficiency, interests, and penalties. 2/ Computed using the tax amnesty rates of 40% of the basic tax assessed delinquencies and assessment, which have become final and executory, amounting to P1,754,787.92 and 100% of the basic tax assessed from withholding agents who withheld taxes but failed to remit the same to the BIR amounting to P1,952,336.50. RESOLVED, FURTHER , That the interests and penalties incurred from the said tax liabilities amounting to P162,154,674.88 and P4,956,868.32, respectively, shall not be covered by the tax subsidy pursuant to the provisions of the Tax Amnesty Act and the DOF-DBM Joint Circular No. 002-2020. RESOLVED, FINALLY , That a corresponding Certificate of Entitlement to Subsidy shall be issued to the IBC-13, covering the P117,835,395.33 tax subsidy granted by the FIRB to cover the tax obligations of the IBC-13 with the BIR. The availment shall be in accordance with the terms and conditions of RA 11518, or the GAA for FY 2021, subject to the availability of funds therefor, pursuant to the terms and conditions of the Rules and Regulations to Implement the Subsidy Provision under EO 93. (SGD.) ANTONETTE C. TIONKO Undersecretary Department of Finance (SGD.) ROLANDO U. TOLEDO Undersecretary Department of Budget and Management (SGD.) RAFAELITA M. ALDABA 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.) VENER S. BAQUIRAN Deputy Commissioner Bureau of Customs