PSE Circular for Brokers No. 2399-98

October 20, 1998 PSE CIRCULAR FOR BROKERS NO. 2399-98 October 19, 1998 NO DEFICIENCY IN SMC'S INCOME TAX PAYMENTS San Miguel Corporation today said it was not aware of any deficiency in its income tax payments for the years 1996 and 1997 nor has it been notified of any such deficiency by the Bureau of Internal Revenue. The company issued the clarification in the wake of newspaper reports that Congress was investigating several companies, including SMC, for alleged tax evasion. The reports cited documents from the BIR purportedly showing that SMC had an income tax deficiency of P185 million. cdlex SMC's senior vice president for Corporate Affairs, Alberto A. Manlapit, said the amount did not represent any tax deficiency on SMC's part but was simply the difference between the final installment of P188.67 million which SMC paid in April 1997 on its income tax due for 1996 and the final installment of P3.65 million paid in April 1998 on income tax due for 1997. Manlapit pointed out that income tax due in 1997 was lower than in 1996 as the company's 1997 profits had fallen substantially from their 1996 levels due to higher excise taxes, the beer price rollback in 1997, foreign exchange losses and higher interests rates the combined effects of which resulted in the decline in SMC's income. Nonetheless, total taxes paid by SMC in 1997 amounted to P13.1 billion, 8% higher than P12.2 billion in 1996 mainly as a result of higher excise taxes on beer, Manlapit added.