THE BUREAU OF Internal Revenue (BIR) has issued the implementing rules and regulations (IRR) for the central bank’s tax exemption from all national taxes under its amended charter.
According to Revenue Regulation No. 2-2020 dated Jan. 15, the tax exemption will be applied to the Bangko Sentral ng Pilipinas’ (BSP) income generated from its governmental functions, effectively implementing the tax provisions of Republic Act (RA) No. 11211, or “An Act Amending RA 7653, Otherwise Known as the New Central Bank Act and for Other Purposes.”
Specifically, revenues generated from the BSP’s supervision over the operations of banks and its regulatory and examination powers over nonbank financial institutions performing quasi-banking functions, money service businesses, credit granting businesses and payment system operators, as well as its mandate to maintain price stability, monetary and financial stability and the convertibility of the peso, will all be tax-exempted.
“All other incomes not included in the above enumeration shall be considered as proprietary income and shall be subject to all applicable national internal revenue taxes,” the document read.
The IRR was signed by Finance Secretary Carlos G. Dominguez III on Dec. 20 last year and BIR Commissioner Caesar R. Dulay.
The implementing rules will be effective starting Jan. 30 or 15 days after its publication in a newspaper or the Official Gazette.
In an earlier statement, the BSP explained that this provision, along with other reforms in the new law, will strengthen its position to pursue its mandate to maintain price and financial stability.
“These reforms place the BSP in a stronger position to pursue its price and financial stability mandate amidst a growing economy and the increasing sophistication of the financial system,” it said in a statement issued following the law’s signing on Feb. 14, 2019.
Under the law, the regulatory body will be exempted from all national, provincial, municipal and city taxes.
Aside from the tax provisions, the amendments also widened the regulator’s covered institutions to include money service businesses, credit granting businesses and payment system operators, to improve its capacity to address potential risks from the linkages of banks and the said financial entities. — Beatrice M. Laforga