CTA upholds SMB P1-B refund; SMGP allots P4.49B for RE
THE Court of Tax Appeals (CTA) En Banc has upheld a tax refund exceeding P1 billion in favor of San Miguel Brewery, Inc. (SMB), the beer unit of San Miguel Corp. (SMC), in connection with excise tax collections for 2020.
In a 17-page decision dated April 14, the CTA En Banc denied the petition for review filed by the Commissioner of Internal Revenue.
“The petition lacks merit,” the court said in the decision penned by Associate Justice Maria Rowena G. Modesto-San Pedro, upholding a previous Division ruling in favor of the beer giant.
SMB, which manufactures and distributes fermented malt-based beverages, had challenged the Bureau of Internal Revenue’s (BIR) implementation of certain excise tax rules.
The court said that some administrative issuances, including Revenue Memorandum Circular No. 90-2012, went beyond the authority granted under Republic Act (RA) No. 10351.
It also said the BIR’s “no downgrading” rule was inconsistent with the law’s requirement to classify products based on net retail prices.
The CTA said higher tax rates under Republic Act No. 11467 took effect only on Feb. 10, 2020, after publication in the Official Gazette, rather than the earlier January 2020 dates cited by the BIR through website posting. The court said printed publication is a due process requirement to notify affected taxpayers.
SMB is set to receive a refund totaling P1,068,775,829.04 for excise taxes collected during early 2020.
RENEWABLE ENERGY
In a separate development, San Miguel Global Power Holdings Corp. (SMGP), the power generation arm of SMC, has allocated about P4.49 billion for renewable energy (RE) investments after raising funds from the debt market.
In a regulatory filing on Friday, SMGP said it disbursed part of the net proceeds from its bond issuance to hydropower and solar projects.
The company raised up to P30 billion in fixed-rate bonds on April 17, with proceeds also earmarked for payments to suppliers, service providers, and contractors, as well as for withholding taxes and customs duties.
SMGP has also set aside P6.9 billion to refinance debt obligations, leaving a remaining balance of P18.56 billion.
The bond offer, issued through the Philippine Dealing & Exchange Corp., included three series maturing in 2031, 2033, and 2036. The offer covered P20 billion in fixed-rate bonds, with an oversubscription option of up to P10 billion.
SMGP tapped Bank of Commerce, BDO Capital & Investment Corp., and China Bank Capital Corp. as joint issue managers. They are joined by Land Bank of the Philippines, Philippine Commercial Capital, Inc., PNB Capital and Investment Corp., and Security Bank Capital Investment Corp. as joint lead underwriters and bookrunners.
“The proceeds come at a critical time. As electricity demand continues to grow and the power sector faces supply tightness and volatile global fuel markets, these funds will support our efforts to ensure reliable and stable power supply for the country while advancing our investments in renewable and cleaner energy sources,” said SMGP General Manager Elenita Go.
SMGP is among the country’s largest power companies, with a diversified portfolio that includes natural gas, coal, and renewable energy such as hydroelectric power and battery energy storage systems. It also operates in retail electricity supply and has investments in distribution services. — Erika Mae P. Sinaking and Sheldeen Joy Talavera
