PDIC (1)

June 3, 2021 FISCAL INCENTIVES REVIEW BOARD RESOLUTION NO. 7-21 SUBJECT MATTER : PDIC (1) WHEREAS, the Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality primarily mandated to provide a deposit insurance system for the depositing public to help promote public confidence and economic stability; HTcADC WHEREAS, the PDIC, as a regulatory agency, exercises governmental functions with the responsibility to provide safeguards against risks of bank failures; WHEREAS, in strengthening the deposit insurance system, the State declares it as a policy to preserve and maintain at all times the Deposit Insurance Fund (DIF) of the PDIC; WHEREAS, Republic Act (RA) No. 9576 provides that all tax obligations of the PDIC shall be chargeable to the tax expenditure fund (TEF) in the annual General Appropriations Act (GAA) for a period of five (5) years reckoned from the date of effectivity of the Act on June 1, 2009 and on the 6th year and thereafter, the PDIC shall be exempt from income tax, final withholding tax, value-added tax (VAT) on assessments collected from member banks and local taxes; WHEREAS, Section 86 of RA 10963, otherwise known as the Tax Reform for Acceleration and Inclusion law (approved on December 19, 2017 and made effective on January 1, 2018) provides for the repeal of VAT exemption of various government-owned and/or -controlled corporations (GOCCs) including those of the PDIC, state universities and colleges (SUCs), and other government instrumentalities (GIs); CAIHTE WHEREAS, under the same law, the repealed VAT exemption of the concerned GOCCs, SUCs and other GIs is replaced by a targeted tax subsidy being administered by the Fiscal Incentives Review Board (FIRB); WHEREAS, Section 15 (c) of RA 11518 or the 2021 General Appropriations Act (GAA) reiterates the authority of the Fiscal Incentives Review Board to grant tax subsidies; WHEREAS, the cash payment of the VAT if charged against the DIF could adversely impact on the ability of the PDIC to maintain the required DIF level and can be prejudicial to its dividend remittances to the National Government; NOW, THEREFORE, BE IT RESOLVED, AS IT IS HEREBY RESOLVED, to grant tax subsidy to the PDIC in the amount of THREE BILLION SEVEN HUNDRED MILLION PESOS (P3,700,000,000.00) only, for its VAT obligations for the calendar year 2021. Provided , that: (a) the initial issuance of the corresponding Certificate of Entitlement to Subsidy (CES) shall be limited to the amount of ONE BILLION SEVEN HUNDRED FORTY-SEVEN MILLION FOUR HUNDRED FIVE THOUSAND SIX HUNDRED ELEVEN AND 69/100 PESOS (P1,747,405,611.69) and ONE MILLION SIX THOUSAND EIGHT HUNDRED SIXTY-EIGHT AND 45/100 PESOS (P1,006,868.45) only , representing VAT with actual Bureau of Internal Revenue (BIR) billings/assessments/tax returns for the months of January and February 2021, respectively: and (b) the subsequent CES shall be issued only upon the submission by the PDIC to the FIRB of its actual tax liability based on BIR billings/assessments/tax returns: 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.) ANTONETTE C. TIONKO Undersecretary Department of Finance (SGD.) LAURA B. PASCUA 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.) ATTY. VENER S. BAQUIRAN Deputy Commissioner Bureau of Customs