SBCorp

April 8, 2021 FISCAL INCENTIVES REVIEW BOARD RESOLUTION NO. 3-21 SUBJECT MATTER : SBCorp WHEREAS, the Small Business Corporation (SBCorp), is a government financial institution, created on January 24, 1991 pursuant to Section 11 of Republic Act (RA) No. 6977, as amended, mandated to provide access to finance, financial management, and capacity building to micro, small, and medium enterprises (MSMEs); WHEREAS, Section 4 (z) of RA 11494 or the "Bayanihan to Recover as One Act," approved on September 11, 2020 directed the SBCorp to expand its existing loan programs for MSMEs, cooperatives, hospitals, tourism, and Overseas Filipino Workers affected by the Corona Virus Disease 2019 (COVID-19) pandemic and by other socio-economic reversals, through a combination of increasing available loanable funds, reducing documentary requirements, increasing maximum loan amounts per borrower, reducing interest rates, extending loan terms, utilization of financial technologies to expand reach and increase access and set fast turn-around loan processing time; WHEREAS, the SBCorp launched the COVID-19 Assistance to Restart Enterprises (CARES) Program as a special financing facility that offers interest- and collateral-free loans for micro and small enterprises that have been adversely affected by the COVID-19 pandemic; WHEREAS, Section 10 (e) (4) of RA 11494 allocated Ten Billion Pesos (P10,000,000,000.00) to SBCorp as additional funding to expand the CARES program that was tagged as "Bayanihan CARES" and for its other lending programs; WHEREAS, the fund downloaded by the Department of Budget and Management to the SBCorp is in the form of a capital infusion and as such, the SBCorp needs to issue certificates of stock on the subscription of the National Government (NG) amounting to Eight Billion Forty-Two Million Six Hundred Four Thousand and Four Hundred Pesos (P8,042,604,400.00); HEITAD WHEREAS, Section 174 of the National Internal Revenue Code of 1997, as amended, provides that every original issue, whether on organization, reorganization or for any lawful purpose, of shares of stock by any association, company, or corporation shall be subject to documentary stamp tax (DST) at the rate of P2.00 on each P200.00, or fractional thereof, of the par value; WHEREAS, the capital infusion made by the NG to SBCorp was for a specific purpose, and payment of the DST would in effect diminish the funds available for the implementation of the Bayanihan CARES program as well as other lending programs of the SBCorp; WHEREAS, Section 15 (c) of RA 11518, or the 2021 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 SBCorp in the amount of EIGHTY MILLION FOUR HUNDRED TWENTY-SIX THOUSAND AND FORTY-FOUR PESOS (P80,426,044.00) only, to cover its DST liability for the issuance of certificates of stock on the subscription of the NG. Provided , that the corresponding Certificate of Entitlement to Subsidy shall be issued only upon the submission by the SBCorp to the FIRB of its actual tax liability based on the 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 11518, or the 2021 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 Executive Director National Tax Research Center Head, FIRB Secretariat (SGD.) ANTONETTE C. TIONKO Undersecretary of Finance Presiding Officer-FIRB