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Daily coronavirus infections likely to stay at 2,000

PHILIPPINE STAR/ WALTER BOLLOZOS

By Alyssa Nicole O. Tan, Reporter

DAILY coronavirus infections in the Philippines would probably stay at 2,000 for the rest of the year, according to a health expert, noting that the pandemic is far from over.

“The number of cases will hover around 2,000,” Jomar R. Rabajante, a researcher from the University of the Philippines COVID-19 Pandemic Response Team, told the ABS-CBN News Channel on Monday. “This implies the pandemic is far from over.”

The country’s healthcare use rates remained manageable, he added.

Mr. Rabajante urged authorities to continue monitoring the pandemic situation after it did away with the mask mandate outdoors.

“We can suppress the cases but our borders are open,” he said. “People can still import COVID-19 to the Philippines, possibly new variants.” People should continue wearing face masks especially in crowded areas, he added.

Mr. Rabajante warned of a potential coronavirus outbreak inside classrooms after millions of students returned to schools in August. Schools must enforce daily face-to-face classes starting next month.

The Philippines on Sunday posted 2,117 coronavirus cases, bringing the total to 3.95 million. Of the new cases, 908 were from the capital region, the Health department said.

Thirty-two more people died, bringing the death toll to 63,013. Almost 29,000 Filipinos were still infected with the virus, while 3.86 million have recovered.

Health officer-in-charge Maria Rosario Vergeire earlier traced the rise in infections to easing restrictions and more contagious subvariants.

About 73 million Filipinos have been fully vaccinated against the coronavirus. More than 19.3 million have been injected with their first booster shot, while more than 2.8 million have received their second booster.

Also on Monday, the Health department asked the Senate to increase the budget of attached agencies and corporations and agencies.

Its proposed budget of P301 billion is 10% higher than this year and accounts for 5.72% of next year’s P5.268-trillion budget. The secretary’s budget makes up 65% of the total and is 4% higher than this year.

“The budget level of most of our attached agencies and corporations has decreased in the 2023 National Expenditure Program,” Ms. Vergeire told the Senate finance committee at a hearing. Attached corporations account for 35% and attached offices make up 0.15% of its budget.

“We have submitted to Congress our request for additional funding for our government-owned and -controlled corporations to cater to more patients through its additional capital outlay requirements, information technology and other operational expenses,” she said.

The Department of Health (DoH) sought P500 million more for the Lung Center of the Philippines, P500 million more for the National Kidney and Transplant Institute, P200 million more for the Philippine Heart Center and P468 million more for the Philippine Children Medical Center.

It also proposed P70 billion more for Philippine Health Insurance Corp. (PhilHealth), P36 million more for the National Nutrition Council and P59 million more for the Philippine Institute for Traditional and Alternative Healthcare.

Senator Emmanuel Joel J. Villanueva said the DoH budget is P27 billion higher than this year, but “the increase was mainly for the subsidy of PhilHealth at P20 billion.”

Senator Joseph Victor “JV” G. Ejercito also brought up Universal Healthcare Law, which mandates a 0.5% increase in yearly premiums starting at 3% in 2020 until it hits 5%.

He asked if it was possible to keep the current premium rate. “How much is needed to reach a status quo of 3% or 3.5% so that it won’t be too heavy for employees, direct contributors and overseas Filipino workers (OFW)?”

PhilHealth officer-in-charge Eli Dino D. Santos said they had no choice but to enforce the law, noting that they started collecting a 4% premium starting this year.

“We agree with Senator JV Ejercito on the situation of the OFWs, but to my mind, we need to balance the ability of PhilHealth to finance the benefits that it is mandated to provide under the Universal Healthcare Act,” he said.

Mr. Ejercito also asked why no budget was allotted for cancer patients.

Ms. Vergeire said they have appealed to the Budget department to restore the P500-million budget for the program, which along with mental health is the only noncommunicable disease line item.

“Our budget for the cancer program increased from P786 million in 2022 to P1 billion in 2023, so it’s good that they’re together but if it’s going to be separated, it’s going to be sustained through the years which is better for our program,” she added.

Mr. Villanueva said that the government should continue boosting its support for cancer patients.

Palace: President’s Singapore trip for F1 race productive

By Kyanna Angela Bulan

THE PALACE on Monday confirmed Philippine President Ferdinand R. Marcos, Jr. had attended the Formula One (F1) Grand Prix at the weekend, calling it a productive trip.

His trip to Singapore “was productive,” Press Secretary Trixie Cruz-Angeles said in a Facebook post. “He affirmed major talks in his last state visit to this state and continued to urge investments into the Philippines,” she said in Filipino.

The president’s Singapore trip showed his insensitivity to the plight of poor Filipinos, including recent typhoon victims, congressmen said on Monday.

The president managed to spent for the race with his family while Filipinos suffer from spiraling prices and the recent typhoon, Party-list Rep. Arlene D. Brosas said in a statement.

“If the president used government resources for an obviously personal, extravagant and frivolous trip in time of economic hardship then it is like a punch in the gut of hungry Filipinos,” Party-list Rep. France L. Castro said in a separate statement.

Filipinos expect the president to attend to the victims of Typhoon Karding, Arjan P. Aguirre, a political science professor at the Ateneo de Manila University, said in a Facebook Messenger chat.

“Going to the Singapore F1 Grand Prix is not something that this country needs, especially now that we are recovering from the devastation of the recent typhoon,” he added.

State affairs were not discussed at the event and the public did not benefit from the overseas trip, Terry L. Ridon, a public investment analyst and convenor of InfraWatch PH, said in a Messenger chat.

“Certainly, the president’s time could have been better spent visiting typhoon-affected communities than sneaking out of the country to witness high-profile events with clearly little public impact,” he added.

A single-day pass for the Sunday race costs as much as SG$988 (P40,600), while a three-day pass costs as much as SG$1,288, Mr. Castro said. Hospitality packages that include prime views and exclusive access with food and beverage cost as much as SG$9,898.

It doesn’t matter if he used his own money for the trip, said Hansley A. Juliano, a political economy researcher studying at Nagoya University’s Graduate School of International Development in Japan.

Any trips by officials are given the spin that they are there on state business, he said in a Messenger chat. “Even then, state functions in the past were clear about international trips being documented to be limited to state and official events.”

Mr. Marcos was accompanied by his wife, his son Ilocos Norte Rep. Ferdinand Alexander and his cousin, Speaker Martin G. Romualdez and his wife.

“No matter how Malacañang spins the trip, it was clearly an indulgent family weekend by the president with his wife, son, and cousin in tow,” Sonny A. Africa, executive director of think tank IBON Foundation, said in a Messenger chat.

“The president and indeed, all our government officials really do have to be held to a high standard of ethics in line with their choice to enter public service,” he said. “Leading a modest life is the least of what is expected of them.”

As head of state, Mr. Marcos has a huge responsibility to the people all the time, policy analyst Michael Henry Ll. Yusingco a said in a Messenger chat.

“Going on an unannounced and unscheduled trip overseas is just disrespectful to the job and to the people who depend on him doing his job,” he added.

The weekend getaway in Singapore is “insensitive, unnecessary and irresponsible,” Bagong Alyansang Makabayan Secretary General Renato Reyes said in a statement on Sunday.

“We are in the middle of an economic crisis where inflation will again reach record highs, public debt has breached P13 trillion and millions of Filipinos are reeling from the effects of Typhoon Karding,” he said. “So why does the president think it’s OK to take a private jet to Singapore to watch the return of the F1 Grand Prix?”

“We are approaching the first 100 days in office of Marcos and it has been one party after another since he returned to Malacañang. The jet-setting lifestyle is incompatible with the Office of the President.”

PUV modernization to proceed after being left off 2023 budget

Hyundai’s fleet of Modern PUVs in San Jose Del Monte, Bulacan — PHOTO FROM HYUNDAI ASIA RESOURCES, INC.

By Arjay L. Balinbin, Senior Reporter

THE Transportation department said it will proceed with the public utility vehicle modernization program (PUVMP) after funding for the program was left off the department’s 2023 budget proposal.

“Kung sakaling hindi mabigyan ng pondo o hindi magkaroon ng amendment upang magkaroon ng budget ang PUVMP, hindi pa rin magkakaroon ng suspensyon sa implementasyon ng programa (In the event that no funds are allocated or an amendment in the budget does not materialize to allow funding for the Public Utility Vehicle Modernization Program, it will not be suspended),” Transportation Undersecretary Mark Steven C. Pastor told BusinessWorld recently.

The department had proposed a P788-million 2023 budget for the program, but this item was not included in the National Expenditure Program, the document outlining the government’s budget proposal to Congress.

Mr. Pastor said the requested funding was meant to support the PUVMP’s “stakeholder support programs and the operationalization of PUVMP Project Management Offices.”

“Kaya naman patuloy na nila-lobby ng DoTr ang kaukulang pondo para sa PUVMP upang walang maantalang mga aktibidad (The DoTr continues to lobby for funding to ensure the program is not disrupted),” Mr. Pastor said.

He said the department remains hopeful for funding. The project was one of the previous administration’s leading modernization initiatives.

“Naniniwala ang Department of Transportation (DoTr) na mabibigyan pa rin ang programa ng kinakailangan nitong budget sa tulong at suporta ng ating mga mambabatas through an amendment (The DoTr believes legislators will support the program by intervening via amendments to the budget),” he said.

Last week, Transportation Secretary Jaime J. Bautista welcomed the House’s approval of the 2023 DoTr budget, which amounts to P167.12 billion.

The PUVMP calls for a “restructured, modern, well-managed and environmentally sustainable transport sector where drivers and operators have stable, sufficient and dignified livelihoods while commuters get to their destinations quickly, safely and comfortably,” according to a Land Transportation Franchising and Regulatory Board (LTFRB) description of the program on its website.

In an appearance on Monday on the One Balita Pilipinas program of One PH, the Filipino-language cable news channel of Cignal TV, Elvira Medina, chairperson of the National Center for Commuter Safety and Protection, said the commuters she represents want “full modernization” of PUVs.

Liga ng Transportasyon at Operators President Orlando Marquez said 50% of the traditional jeepneys have yet to display the new fare matrix.

LTFRB Chairperson Cheloy Velicaria-Garafil has required PUVs to display prominently the new fare matrix before they are allowed to collect new fares.

The LTFRB announced on Sept. 16 new fares for PUVs to take effect on Oct. 3.

The minimum fare for traditional jeepneys is now P12, up from P11 previously. Modern jeepneys can charge P14, up from P13; ordinary city buses P13 (from P11), air-conditioned city buses P15 (from P13), ordinary provincial buses P11 (from P9), and deluxe provincial buses P2.10 per kilometer (from P1.55).

The flag-down rate for taxis is now P45, up from P40 previously.

ERC expecting transmission charges to fall

WORKERS fix an electric line in Payatas, Quezon City, March 13. — PHILIPPINE STAR/ MICHAEL VARCAS

THE Energy Regulatory Commission (ERC) said on Monday that transmission charges are likely to fall after revamping the process for computing the fees collected by the National Grid Corp. of the Philippines (NGCP).  

In a briefing, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said that the commission is expecting to complete by year’s end the reset of the NGCP’s transmission charge for 2023-2027.

Ms. Dimalanta said the impact of the reset will be apparent by January.

“We are targeting to complete (the review) by the end of the year so we can start with new rates in January,” Ms. Dimalanta said.

On Sunday, the ERC said it promulgated the Amended Rules for Setting Transmission Wheeling Rates (RTWR), which triggers the rate reset process for the NGCP.

Transmission wheeling rates are the direct charge for the use of transmission facilities in delivering electricity.  

“The science behind rate setting is not perfect because it is based on forecasts, but for this regulatory review, it will be based on actual figures,” Ms. Dimalanta said.

Ms. Dimalanta said the reset was long overdue and that rates needed to be adjusted for current conditions. 

The ERC said on Sunday that the amended RTWR will eliminate over recoveries, double compensation, and redundant inflationary considerations. — Ashley Erika O. Jose

Prices steady for Christmas feast goods, supermarket industry says

PHILSTAR FILE PHOTO/KNORR RELEASED

PRICES are steady for groceries associated with the traditional Christmas feast, known in the Philippines as ”noche buena,” the supermarket industry said on Monday.

Steven T. Cua, Philippine Amalgamated Supermarkets Association president, said in an interview on One News Channel’s BusinessWorld Live program that it is “too early” for noche buena goods prices to rise.

“No prices increases yet. It is still a bit too early. The advice of the Department of Trade and Industry (DTI) is to go out and buy if you can, if you have the money — that may be a good idea this year in particular because we do not know what’s going to happen,” Mr. Cua said.

“If consumers go out and buy now and manufacturers see that there is demand, maybe they will be reluctant to increase prices,” he added.

The DTI has advised consumers to start stocking up on ingredients for the Christmas feast to take advance of these products’ long shelf lives. It also urged manufacturers of noche buena products to cap their price hikes to 10%.

Separately, Mr. Cua said the price of the most popular brand of imported US luncheon meat has risen 15% in the last two weeks due to the weaker peso.

“Businesses will take advantage of the fact that there are increases in the prices of imported goods,” Mr. Cua said, noting that domestic brands can offer alternatives that are still priced competitively.

“Everyone’s going to be more creative in stretching their pesos… We can still have a Merry Christmas. Just keep it simpler and be more creative. There will be some good buys in the market for sure,” he added.

The Bankers Association of the Philippines said the peso closed at P59 against the dollar on Monday, against its P58.625 finish on Friday. — Revin Mikhael D. Ochave

BIR says small taxpayers won’t be focus of agency’s enforcement efforts

People line up to file their income tax returns at the Bureau of Internal Revenue office in Intramuros, Manila, April 18, 2022. — PHILIPPINE STAR/ RUSSELL A. PALMA

THE Bureau of Internal Revenue (BIR) said on Monday that small taxpayers will not bear the brunt of its enforcement actions, adding that its efforts will be focused on medium-sized and large companies.

“In this administration, we will really focus on large taxpayers and medium taxpayers,” BIR Commissioner Lilia Catris Guillermo said at the Senate budget hearing for the Department of Finance (DoF). “The ease of paying taxes bill will segment taxpayers into small, medium and large, and the requirements for small taxpayers will be simplified.”

“We really will not hold anything against small taxpayers; instead, we will give them good service so that their businesses will grow – only then will we (exert more effort in) taxing them,” she added.

Senator Rafael T. Tulfo, speaking at the hearing, alleged that the bureau is placing undue burdens on pedicab drivers, tricycle drivers, thrift stores, and bloggers.

“Whenever the BIR needs to increase tax collection, it’s the poor that are being targeted,” he said. “If the BIR really wants to raise collections, why doesn’t it target the rich, like oil companies.”

Mr. Tulfo noted in particular the proliferation of smuggled oil products, which generate no taxes for the government.

“The basic principle of taxation is to be just and fair, so it’s not true that small taxpayers are our focus. In fact, we have (an agency) which is focusing on large taxpayers,” Ms. Guillermo said, referring to the BIR’s Large Taxpayers Service.

“Small taxpayers are not being singled out; everyone must issue receipts, whether small, medium or large taxpayers,” she added. However, she specified that the agency is not strict with pedicab drivers’ transactions.

Senate Minority Leader Aquilino Martin L. Pimentel III said “the impression is that we would rather squeeze… those who want to follow the law since they are the ones in our database.”

“But the brave syndicates who have not been paying tax for years remain out of the system, undetected, unfelt by the revenue collection agencies,” he added in a mix of English and Filipino.

Ms. Guillermo said taxpayers currently filing manually are slowly being incorporated into the database to allow them to be served more efficiently in the future.

Finance Secretary Benjamin E. Diokno said the efforts to collect such data are part of a broader effort to expand the tax base. “When you have a broader base, you can lower the tax rate because revenue is rate times base.”

Mr. Tulfo said he has been receiving many complaints from business owners, particularly Chinese-Filipinos in the provinces, who are visited by revenue agents presenting letters of authority (LoA) as a preliminary to an audit. 

“Most of the time, once a business is issued an LoA, this means money for the (official),” he said. “On the other hand, the big companies are often not (targeted). They will instead have discussions on the side (with the auditor)… where they can make arrangements. Sorry again for saying this, but this is the reality.”

Ms. Guillermo said the BIR’s digitalization efforts will resolve such issues.

“Our first program right now is digitalization, and new audits are currently suspended because our plan is for LoAs to become automated,” she said. “These can no longer be issued by auditors whenever.”

“We have a risk-based criteria (for determining which taxpayer to audit), and we are already preparing the program for this. What the auditors are doing now is clearing their backlog (of) prescribing… and that is being monitored properly using technology,” she added.

The DoF’s proposed 2023 budget allocates the most funding to three of the government’s leading money-generating agencies, with the BIR getting P13.1 billion, the Bureau of Customs P6 billion, and the Bureau of the Treasury P4.2 billion. — Alyssa Nicole O. Tan

BoI pitching investors to locate in South-Central Mindanao, Western Visayas 

THE Board of Investments (BoI) said it is hoping to persuade investors to locate their operations in South-Central Mindanao and the Western Visayas.

In a statement Monday, the BoI said that it recently conducted Strategic Investment Priority Plan (SIPP) roadshows in Iloilo City and General Santos City last month.

Rachel B. Echague, BoI director for resource-based industries, said Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act details the incentives investors are eligible for regardless of which investment promotion agencies (IPA) a business registers with.

“No matter which IPA you register your project with, you will still be given or granted the same package of incentives and they only differ in terms of industry tier classification, location, and whether you are export-oriented or geared towards the domestic market,” Ms. Echague said.

According to the BoI, General Santos City is home to six of the seven major tuna companies, with the industry’s overall workforce estimated at 120,000 and exports at $58 million.

“The CREATE Law positions our region to be a (potential) metropolitan development… We are confident that the SIPP will maximize business opportunities and investors will consider our region as their destination,” General Santos City Economic Development Office Head Leonard V. Flores said.

Teresa Socorro C. Ramos, National Economic and Development Authority (NEDA) regional director for Soccsksargen, said that the region’s economy posted 5.2% growth to P472.5 billion in 2021.

“Soccsksargen is among four regions… whose output returned to pre-pandemic levels. In 2021, the region was the country’s largest coffee producer at 21,588 metric tons (MT) and Mindanao’s top rice producer with 1.265 million MT,” she said.

Department of Trade and Industry Western Visayas (Region VI) Regional Director Rebecca M. Rascon said she hopes the region will attract “construction, Information Technology-Business Process Management (IT-BPM), tourism (and) manufacturing projects to generate employment.”

Arecio A. Casing, Jr., NEDA Region VI OIC-regional director, said the region offers investors ample agricultural land, a favorable energy mix, and promising locations.

He added that some of the ongoing infrastructure projects in the region include the proposed Iloilo-Capiz-Aklan Expressway, the proposed Panay Guimaras-Negros Island Bridge, and the Panay River Basin Integrated Development Project.

The SIPP, which took effect on June 11, is the list of priority industries the government wishes to develop by offering preferential incentives to the private sector. — Revin Mikhael D. Ochave

POGO revenue well below forecast at P4.4 billion

PHILSTAR

THE Bureau of Internal Revenue (BIR) said on Monday that taxes generated by the Philippine Offshore Gaming Operator (POGO) industry amounted to P4.4 billion in the eight months to August, up from the P3.91 billion collected over the full year in 2021 but significantly lower than the bullish pre-pandemic projections for the industry.

The Department of Finance (DoF) had expected a law regulating POGOs to raise P32.1 billion in 2021, on the assumption that operations will return to pre-pandemic levels.

“However, contrary to the lofty expectations, POGO entities have not returned to the Philippines and the number of foreign nationals employed by POGOs has not equaled pre-pandemic levels but has drastically decreased,” the DoF said. Registered POGOs have declined steadily to 163 from 191 in 2021, 244 in 2020 and 281 in 2019.

The number of workers in the POGO industry has risen to 34,245 at the end of August from 30,583 in 2021, though the total was well below the 42,385 tallied in 2020 and 144,605 in 2019.

The DoF said the industry has fled the Philippines because of tax rules and the Chinese government’s hostility to all forms of gambling.

At a Senate Ways and Means Committee hearing, the Philippine Amusement Gaming Corp. (PAGCOR) reported income of P1.912 in the eight months to August, putting it behind the pace of previous years. It generated P3.47 billion in 2021, P5.28 billion in 2020, and P8.02 billion in 2019.

The DoF said in a letter to the Senate dated Oct. 3, that POGOs’ “modest contribution to the economy does not outweigh the social costs of (their) continued operations, especially (with the) alarming increase in undesirable criminal activities. It estimated that the industry accounted for 0.03% of gross domestic product in 2021 and the current year.

According to the Philippine National Police, POGO-related crimes included prostitution, the employment of minors, violations of labor law, and kidnapping.

The Anti-Money Laundering Council has reported that POGOs and service providers are a money laundering risk given that the financial transactions of internet-based casinos are based on opaque remittance.

“This can frustrate the government’s efforts to get out of the Financial Action Task Force grey list by January 2023,” the DoF said.

The Philippines, it added, may be exposed to reputational risk by allowing the industry to operate even as it remains illegal in China, and is at any rate in position to tap other forms of investment.

“We have (prepared) the ground for foreign direct investment to come in through economic liberalization measures and by modernizing our tax incentives system through the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act,” the DoF said.

“It is time to pursue investments that will create value and high-quality jobs for our people, in line with our vision of an inclusive and sustainable economic development,” it added.

Senator Mary Grace Natividad S. Poe-Llamanzares said the Philippines must turn away from offshore gambling.

“This is an opportune time to weigh whether the POGO industry plays a significant role in our bid for economic recovery and growth,” she said.

“We need to have the policy framework and the political will to invite strategic investment from industries that are actually worthy of our focus,” she added. — Alyssa Nicole O. Tan

NGOs call for ban on Sierra Madre logging, mining

MASUNGI GEORESERVE FOUNDATION, HANDOUT

NON-GOVERNMENT organizations (NGOs) called for a blanket ban on logging, quarrying, and mining in Eastern Luzon’s Sierra Madre range, saying the mountains need to be kept intact to serve as a barrier to natural calamities.

“The Sierra Madre is a source of livelihood. It keeps us safe. The Sierra Madre keeps our indigenous people safe. It balances our ecology so we have the right climate. It secures our future,” Southern Tagalog for Environmental Development and Protection (STEP-Sierra Madre) Chairman Mark Almazan said at a forum on Monday.

The Sierra Madre is the longest mountain range in the Philippines.

“The Sierra Madre (helps protect against) wind and rain breaker,” Simeon T. Sioson, chairman of Federation of Central Luzon Farmers’ Cooperatives, said.

Mr. Sioson added that Typhoon Karding (international name: Noru) affected not just farmers and fisherfolks, but the livelihood and homes of many Filipinos.

According to the Department of Agriculture (DA), crop damage inflicted by Typhoon Karding hit P3.12 billion, affecting 170,762 hectares of farm land and 108,594 farmers and fisherfolk. The volume of lost production was estimated at 158,117 metric tons.

“We need nature for our livelihood. Aquaculture depends on clean water to survive and thrive. It is in our best interest to preserve the environment so we can keep on producing fish,” Norberto O. Chingcuanco, vice-president for corporate planning of Feedmix Specialist, Inc., said.

“The impact of Karding on everyone in the agricultural community might have been worse had it not been for the Sierra Madre. The mountains both protect us from danger and ensure that we are able to produce food,” former Bureau of Fisheries and Aquatic Resources (BFAR) National Director and Tugon Kabuhayan Convenor Asis G. Perez added.

BFAR Regional Director Wilfredo M. Cruz said the mountain range minimized damage to fisheries by saving 17 million individual fish used for brood stock in Central Luzon.

“About 17 million in brood stock fish would have been lost if not for the Sierra Madre. Luzon is number one in aquaculture production, and Central Luzon or Region III produces 16% by value,” he said.

Mr. Almazan also called for a halt to the construction of the dam on the Kaliwa river in Rizal and Quezon provinces.

“Our government is pushing for this dam… it destroys the ecological balance of the Sierra Madre and displaces our indigenous people and puts us at risk,” Mr. Almazan said.

He added that alternative water sources should be harnessed, such as Laguna de Bay. — Luisa Maria Jacinta C. Jocson

Ease of Paying Taxes bill approved in House

The digitalization of the tax agencies finds Congress eager “to modernize the labyrinthine tax administration procedures by simplifying tax compliance, removing redundant and obsolete tax requirements, and lifting restrictions that prevent taxpayers from complying with tax laws remotely.”

With a vote of 250 “yes,” zero “no,” and zero abstentions, the 19th Congress approved on Sept. 26 on third and final reading House Bill (HB) 4125, or the proposed Ease of Paying Taxes Act (EoPT). The bill seeks to amend the National Internal Revenue Code, as amended (the Tax Code) and introduce administrative reforms that will ultimately reduce the burden of paying taxes while strengthening taxpayer rights.

The bill is now pending at the Senate.

The salient features of the approved House Bill are as follows.

CRITERIA FOR TAXPAYER CLASSIFICATION
The bill authorizes the Secretary of Finance, upon the recommendation of the Commissioner of Internal Revenue, to establish reasonable criteria for taxpayer classifications. The criteria will consider the taxpayer’s capacity to comply with tax rules and regulations, the amount and type of taxes to be paid, the volume of gross sales and/or receipts, inflation, the volume of business, wage and employment levels, and similar economic and financial factors.

At present, laws and regulations only provide for the classification of large taxpayers. All large taxpayers report to the Large Taxpayer’s Service (LTS) at the Bureau of Internal Revenue (BIR) National Office. A proposed amendment seeks to introduce small and medium taxpayer categories and a corresponding BIR special unit dedicated to servicing them. The proposal seeks to introduce simplified tax returns and processes for smaller taxpayers to ease compliance.

The bill also proposes that withholding of creditable tax at source not be required for taxpayers classified as small.

TAXES CAN BE PAID ANYWHERE
The EoPT bill also makes tax transactions portable by removing the restrictions on payment venues. This applies to all internal revenue taxes (income tax, value-added tax, estate tax, donor’s tax). The proposal removes the requirement that taxes be paid in the BIR office or banks in the tax district of the taxpayer’s residence, principal place of business, or principal office, thereby allowing for flexibility of payment. These amendments pave the way for full digitalization of the taxpayer experience.

SIMPLIFIED VAT RULES
The distinction between sale of goods and sale of services subject to value-added tax (VAT) is removed. Current tax law requires that the sale of services be documented by an official receipt, and the sale of goods by a sales invoice. Consequently, current tax law also makes the time of VAT reporting subject to the type of transaction. On the sale of goods, VAT is reported upon consummation of the sale, as reflected in an invoice. On the other hand, VAT on the sale of services is reported upon payment, supported by an official receipt.

The EoPT bill seeks to provide for a uniform and simplified documentation of transactions subject to VAT, in which the sales invoice is to substantiate transactions involving goods or services. Thus, VAT-registered persons will have to issue only one type of document, the VAT invoice, for every sale, barter, exchange, or lease of goods or property, and for every sale, barter, or exchange of service. Taxpayers will also be required to monitor only the timing of the consummation of the sale. The proposed amendment likewise provides that VAT be chargeable at the time of the issuance of the invoice, regardless of the time that the accrued sale is recorded in the books of account. The EoPT bill also increased the amount involved in the sales transaction that must be evidenced by a sales invoice from P100 to P500.

Additionally, the EoPT bill also proposes to index to inflation the P3-million VAT threshold, which was increased by Republic Act 10963 (the TRAIN Law), on Jan. 31, and every three years thereafter. The reference value for inflation is the consumer price index (CPI) published by the Philippine Statistics Authority.

Taxpayers who are required to pay percentage taxes in lieu of VAT under Section 116 of the Tax Code will also be required to pay and file their tax returns semi-annually, instead of quarterly.

EASING THE REGISTRATION BURDEN
As to the registration requirements, the EoPT bill proposes to remove the requirement of indicating a business style in the taxpayer’s registration with the BIR. The bill likewise seeks to remove the imposition of the annual registration fee currently imposed under Section 236(B) of the Tax Code. The removal of the annual P500 taxpayer registration fee alone is expected to be of value for the smallest of businesses.

The bill also seeks to ensure that registration facilities are available to taxpayers not residing in the country.

Furthermore, the BIR registration of a taxpayer may be canceled simply by filing the registration information update form, as proposed in the EoPT bill. Any audit that the BIR conducts, where a registration has been canceled, will be made based only on a risk assessment evaluation.

LOWERING PENALTIES
The bill also proposes to lower the surcharge for failure to file and pay taxes from the current rate of 25% to 12%. This will substantially ease the burden on taxpayers who were unable to fully comply with their tax obligations.

TAXPAYER’S BILL OF RIGHTS
Finally, the EoPT bill contains a Taxpayer’s Bill of Rights and designates a Taxpayers’ Advocate Office. It proposes the enumeration of additional fundamental rights to further promote fair treatment to taxpayers and puts in place protections against wrongful assessments. Meanwhile, the taxpayers’ advocate office is tasked with ensuring that taxpayer rights are protected, and due assistance is provided.

Altogether, the EoPT bill seems to be a great step towards modernized tax administration. Since the bill simplifies tax compliance and limits face-to-face transactions with the BIR, the cost of compliance will be reduced and will be appreciated especially by small business enterprises and starting professionals.

The approved EoPT House Bill was transmitted to the Senate on Sept. 27. The Senate may still introduce changes to the bill which we hope will further ease tax compliance rules.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

Azanith Ann B. Payad is a senior associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Anti-graft court drops case vs former first gentleman in helicopter contract

PHILSTAR FILE PHOTO

THE PHILIPPINES’ anti-graft court has dropped the case against former first gentleman Jose Miguel T. Arroyo relating to the procurement of secondhand choppers by the police force in 2009.  

In a three-page resolution dated September 21 and made public on Sept. 22, the Sandiganbayan Seventh Division ordered Mr. Arroyo’s exclusion from the case in compliance with a Supreme Court decision stating that the charge against him lacked evidence.   

“Wherefore, in compliance with the resolution dated December 1, 2021, of the Supreme Court, the name Jose Miguel T. Arroyo is ordered dropped from the information under the criminal case,” said the anti-graft court. “The charge filed against him is necessarily ordered dismissed.”  

The Sandiganbayan added that the hold departure order issued against the former first gentleman had already been recalled on June 1.  

The High Court earlier ruled that government prosecutors failed to provide enough evidence of a conspiracy between public officers and Mr. Arroyo in connection with the anomalous helicopter transaction.  

“The prosecution has a duty to establish at the preliminary investigation level that there is a reasonable belief that Arroyo connived with public officers to commit the offense charged against him,” the court said in a ruling made public in April, written by Retired SC Associate Justice Rosmari D. Carandang   

The Office of the Ombudsman said the irregular transaction cost the Philippine National Police and the government P34.6 million.    

In a separate dissenting opinion, SC Associate Justice Marvic M.V.M Leonen said the High Court should not “interfere with the Office of the Ombudsman’s exercise of prerogatives, unless there is a clear showing of grave abuse of discretion.”  

The Supreme Court (SC) earlier affirmed the dismissal of a former police director, ruling that his approval of the purchase caused an “immense debilitating effect on the government service.” — John Victor D. Ordoñez 

Resumption of more international flights at Davao airport seen as provinces ramp up tourism options 

BW FILE PHOTO

DAVAO Region’s tourism sector is optimistic about having more international flights revived at the Francisco Bangoy airport in Davao City as surrounding provinces launch new activities for tourists.    

“We really hope that the other routes as well will open soon,” Department of Tourism (DoT)-Davao Regional Director Tanya Rabat-Tan said last week at a media forum following budget carrier Cebu Pacific’s announcement of the resumption of its Davao-Singapore route by Oct. 30.   

Singapore Airlines Ltd. and its low-cost subsidiary Scoot have already been offering Singapore-Davao flights since early this year.   

Before the coronavirus pandemic restrictions in March 2020, there were three other international services to and from Davao City: Hong Kong by Cathay Dragon; Quanzhou by  Xiamen Air; Manado by Garuda Indonesia; and Qatar  by Qatar Airways.  

“We just had a meeting with CAAP (Civil Aviation Authority of the Philippines) and that was one of the items discussed. Together with DoT, especially our Secretary (Christina G. Frasco), is in talks with the airlines not just international but domestic (flights) as well,” Ms. Tan said.   

She added that talks are also in the works for flights to and from Japan.   

Meanwhile, Mati City in Davao Oriental recently hosted the first Bay Deep Mati Freediving Festival, a new water activity that has been added to its list of attractions that includes scuba diving, surfing, and skimboarding.  

“This is great news for us, now that we are starting to attract once again the attention of international tourists, most especially divers, as the world starts to move out and away from the pandemic and tourism is on a major comeback,” said Ms. Tan.  

The freedivers explored Mati City’s bays, including Oak Island, Pujada Island, Dahican, Waniban Island, and Blue Bless.  

In Sta. Cruz, Davao del Sur, one of the entry points to Mt. Apo, Municipal Tourism Officer Julius R. Paner said they are combining ecotourism activities with agriculture tourism as they celebrate the town fiesta this week.   

“This time we will have a unique celebration. Among the highlights is the Sta. Cruz Tourism and Agri-trade Exhibit… This is a showcase of everything that Sta. Cruz has to offer in terms of agricultural products, pre-industrial, and tourism program,” Mr. Paner said.  

Sta. Cruz is known for sports activities such as mountain biking, trail running, mountaineering, and water tubing.  

The coastal town is also largely agricultural and home to several industrial plants, including Franklin Baker Company of the Philippines (FBCOP), San Miguel Foods, Inc.-BMEG, Sta. Cruz Feed Mill, and Coca-Cola Philippines Beverages, Inc.  

Mr. Paner said several plants have already confirmed their readiness to host educational tours at their facilities as part of the town’s tourism program. — Maya M. Padillo 

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