Asia-Pacific sustainable development: Baguio ranks 2nd
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [NOVEMBER 19-26]
- BIR CIRCULARIZES THE ERC RESOLUTION SUSPENDING THE INCLUSION OF THE NATIONAL FRANCHISE TAX OF NGCP IN THE TRANSMISSION COST
- BIR CLARIFIES THE VALIDITY OF A CERTIFICATE OF TAX EXEMPTION ISSUED TO CERTAIN CORPORATIONS
- BIR CIRCULARIZES THE MEMORANDUM OF AGREEMENT & DATA SHARING AGREEMENT BETWEEN THE BIR & THE SEC
- DOJ OPINION
- SEC OPINION
I. TAX & BUSINESS-RELATED NEWS [NOVEMBER 19-26]
- Manila Water eyes new markets abroad
- Expanded pawnshop services OKd
- Infra spending surged in Sept, up 16.9%
- Asia-Pacific sustainable development: Baguio ranks 2nd
- CoA, ADB discuss support for stronger audit of foreign-assisted projects
- Fintech Salmon to apply for thrift bank license
- Tesla partners with RCBC for financing
- ERC to notify public of actions, decisions for greater transparency
- PCC deepens probe into GCash, ECPay deal
- SC: 60 hour pro bono legal service aid now required for lawyers
- BSP axes 4 as crackdown on ghost employees continues
- PHL’s largest co-op, Korean firm ink MOU for PHL’s First Survival School
- Gokongweis ready to compete with Dali grocery chain
- Cebu City to revoke business permits of those violating environmental laws
- DTI to consumers: Beware of fake Highlands corned beef
- DigiPlus expanding to Brazil, passes online gaming license qualification
- Booksale says closing some branches as it ‘enters new chapter’
- PH remains heavily reliant on imported vehicles
- PH-Cambodia taxation deal reset
- Vivant bags 15-year power supply deal for Palawan
- BSP, IMF concerned over risks tied to non-bank financial sector
- Insurance industry nets P40 billion in 9 months
- House approves bill providing jobs for seniors, incentives for hiring elders
- Medical spending remains out-of-pocket for many Filipinos, study finds
II. BIR CIRCULARIZES THE ERC RESOLUTION SUSPENDING THE INCLUSION OF THE NATIONAL FRANCHISE TAX OF NGCP IN THE TRANSMISSION COST
Revenue Memorandum Circular (RMC) No. 124-2024, issued on November 15, 2024, circularizes the Energy Regulatory Commission (ERC) resolution suspending the inclusion of the National Franchise Tax of National Grid Corporation of the Philippines (NGCP) in the total monthly transmission cost of billing of distribution utilities.
III. BIR CLARIFIES THE VALIDITY OF A CERTIFICATE OF TAX EXEMPTION ISSUED TO CERTAIN CORPORATIONS
a. Non-stock and non-profit educational institutions as provided under Section 30(H) of the Tax Code of 1997, as amended, and Revenue Memorandum Order (RMO) No. 044-2016;Homeowners’ Association as provided under Republic Act (R.A.) No. 9904 or the Magna Carta for Homeowners’ Association and RMC No. 09-2013, as amended;
b. Revenue Memorandum Circular (RMC) No. 123-2024, issued on November 15, 2024, clarifies the three (3) year validity period of a Certificate of Tax Exemption (CTE) provided in Revenue Memorandum Order (RMO) No. 38-2019, which shall not apply to the following:
c. Non-stock savings and loan association as provided under R.A. No. 8367 or the Revised Non-Stock Savings and Loan Association Act of 1997 and RMC No. 9-2016; and
d. Certificate of Qualification for an employee’s retirement benefit plan created under R.A. No. 4917 or the Retirement Benefit of Private Employee and Revenue Regulation (RR) No. 1-68, as amended by RR No. 1-83.
IV. BIR CIRCULARIZES THE MEMORANDUM OF AGREEMENT & DATA SHARING AGREEMENT BETWEEN THE BIR & THE SEC
Revenue Memorandum Circular (RMC) No. 122-2024, issued on November 12, 2024, circularizes the Memorandum of Agreement and Data Sharing Agreement between the Bureau of Internal Revenue (BIR) and the Securities and Exchange Commission (SEC).
V. DOJ OPINION
[PHILIPPINE MINING ACT OF 1995 QUALIFIES LGU TO ENGAGE IN & CONDUCT INDUSTRIAL SAND & GRAVEL OPERATIONS] [ISSUANCE OF INDUSTRIAL SAND & GRAVEL PERMIT BY THE MINES & GEOSCIENCES BUREAU ALLOWS LGUs TO REGULATE MINING ACTIVITIES] [LGUs CAN CONDUCT INDUSTRIAL SAND & GRAVEL OPERATIONS AS PART OF ITS PROPRIETARY ACTIVITIES]
The Mines and Geosciences Bureau (MGB) is requesting an opinion on whether the Municipality of Tapaz, Capiz, a Local Government Unit (LGU), may be allowed to engage in and conduct Industrial Sand and Gravel operations through its Economic Enterprise Office. The MGB, under the Department of Environment and Natural Resources (DENR), is responsible for the conservation, management, development, and proper use of the country’s mineral resources, including those in reservations and public lands. LGU Tapaz filed with MGB an application for the issuance of an Industrial Sand and Gravel Permit (ISGP). The Department of Justice (DOJ) opined that municipalities, as territorial subdivisions of the Philippines, enjoy local autonomy under Article X of the 1987 Constitution. Also, each LGU can generate revenue, subject to guidelines and limitations. Section 15 of the Local Government Code (LGC) recognizes that LGUs perform both governmental functions (e.g., health, safety, and public welfare) and proprietary functions (aimed at profit or private advantage). However, such proprietary functions are not absolute and are limited by the enumerations of proprietary activities under Sections 17 and 22 of the LGC. In particular, industrial sand and gravel operations are notably absent from the activities a municipality may undertake. While Section 17 of the LGC does not explicitly list these operations, LGUs can still have permits under the Philippine Mining Act of 1995 or the Republic Act (R.A.) No. 7942. It states that qualified persons, including LGUs, authorized to engage in mining, with the technical and financial capability and at least 60% Filipino-owned capital, may be granted an ISGP by the Bureau for sand and gravel extraction using mechanical processing over an area exceeding five (5) hectares. Thus, it allows LGUs to regulate such activities within their jurisdictions, provided they comply with the requirements of the MGB. [DEPARTMENT OF JUSTICE OPINION NO. 47 SERIES OF 2024, OCTOBER 29, 2024]
VI. SEC OPINION
FOREIGNERS IN THE BOARD OF OFFSHORE COLLECTIVE INVESTMENT SCHEMES ARE NOT ALLOWED UNDER ANTI DUMMY LAW & FOREIGN INVESTMENT NEGATIVE LIST
J Co. is seeking an opinion on whether foreign nationals will be allowed to have representation in the Boards of Directors of such funds, considering that foreign stockholders will wholly or partially own such funds, and the units of participation in those funds will be exclusively offered offshore. In reply, citing Section 15 of the Investment Companies Act (ICA), no person shall serve as a director of a registered Investment Company unless he is a Filipino citizen. However, Section 15 of the ICA is superseded by Section 2-A of the Anti-Dummy Law, which classifies corporations with foreign equity restrictions of 40% or less as nationalized or partly nationalized. Although the Anti-Dummy Law does not establish foreign equity limits, it ensures adherence to them. In relation, J Co. claims the 12th Regular Foreign Investments Negative List (FINL) specifies activities subject to foreign ownership restrictions, either mandated by the Constitution or laws and based on considerations of security, health, and the protection of Small and Medium-Sized Entities (SMEs). Implied repeal occurs only when laws conflict irreconcilably, or the latter lawfully replaces the earlier one. The FINL, being an issuance and not a law, addresses foreign equity restrictions, distinct from Section 15 of the ICA. As they cover different subjects, there is no irreconcilable conflict or intent for substitution. Although, Section 2-A of the Anti-Dummy Law and Section 15 of the ICA can be harmonized. The Anti-Dummy Law restricts board composition in corporations subject to foreign equity limits without specific board rules, complementing such laws and the FINL. Meanwhile, Section 15 of the ICA applies to all investment companies, regardless of foreign equity restrictions, as it explicitly governs board composition. Accordingly, foreign nationals will not be allowed to have representation in the Board of Directors of funds constituted as investment companies notwithstanding the representation that foreign stockholders will wholly or partially own such funds, and the units of participation in those funds will be exclusively offered outside of the Philippine territory. [SEC OFFICE OF THE GENERAL COUNSEL LEGAL OPINION NO. 24-28, OCTOBER 9, 2024]
Manila Water eyes new markets abroad [The Philippine Star, November 26, 2024]
Manila Water president and CEO Jocot de Dios told The STAR that among the markets the company is considering for possible expansion are Australia, Brazil and Mexico.
https://www.philstar.com/business/2024/11/26/2402879/manila-water-eyes-new-markets-abroad
Expanded pawnshop services OKd [The Manila Times, November 25, 2024]
Among the amendments are pawnshops will be permitted to engage in a variety of corollary business activities, “provided that such pawnshop shall maintain records of such business and institute appropriate internal control measures and mechanisms that allow distinction from the pawnshop operation and protect its financial consumers.”
https://www.manilatimes.net/2024/11/25/business/top-business/expanded-pawnshop-services-okd/2010333
Infra spending surged in Sept, up 16.9% [Inquirer Plus, November 25, 2024]
Direct government spending on infrastructure amounted to P137.1 billion in September, rising by 16.9 percent year-on-year, latest data from the Department of Budget and Management (DBM) showed.
https://plus.inquirer.net/business/infra-spending-surged-in-sept-up-16-9/
Asia-Pacific sustainable development: Baguio ranks 2nd [The Philippine Star, November 24, 2024]
Mayor Benjamin Magalong said the city was cited for pioneering the use of digital technology to enhance urban planning and resilience through innovative urban program.
CoA, ADB discuss support for stronger audit of foreign-assisted projects [The Manila Times, November 24, 2024]
Officials of the Commission on Audit (CoA) and the Asian Development Bank (ADB) met to discuss support for a stronger audit of foreign-assisted projects, public debt audit and Public Financial Management (PFM) reforms.
Fintech Salmon to apply for thrift bank license [The Philippine Star, November 24, 2024]
Rural Bank Sta. Rosa Laguna Inc. is looking to transition into a thrift bank as part of its growth strategy, with its parent company Salmon Group eyeing to start its application by end-2025.
https://www.philstar.com/business/2024/11/24/2402413/fintech-salmon-apply-thrift-bank-license
Tesla partners with RCBC for financing [The Philippine Star, November 24, 2024]
As Tesla prepares for its much-anticipated entry into the Philippine market, RCBC is rolling out a fully digital auto loan application process. This would enable Filipino drivers to easily finance the cutting-edge Model 3 and Model Y in various trims.
https://www.philstar.com/business/2024/11/24/2402415/tesla-partners-rcbc-financing
ERC to notify public of actions, decisions for greater transparency [Philippine Daily Inquirer, November 23, 2024]
The ERC already posted the first Notice of Commission Action on its website outlining different complaints or requests filed before them and the updates or resolutions issued by the regulatory body on such matters.
PCC deepens probe into GCash, ECPay deal [Philippine Daily Inquirer, November 23, 2024]
The Philippine Competition Commission (PCC) on Friday said it had started a more in-depth review of the proposed acquisition of payment systems provider Electronic Commerce Payments Inc. (ECPay) by Globe Fintech Innovations Inc. (Mynt), the operator of popular e-wallet GCash.
https://business.inquirer.net/491717/pcc-deepens-probe-into-gcash-ecpay-deal
SC: 60 hour pro bono legal service aid now required for lawyers [GMA News Online, November 22, 2024]
According to the SC, the pro bono service may include representation in court, legal counseling, drafting legal documents, and developmental legal assistance. Lawyers may also participate in accredited legal outreach programs in complying with the mandated service.
https://www.gmanetwork.com/news/topstories/nation/927867/pro-bono-service-aid/story/
BSP axes 4 as crackdown on ghost employees continues [The Philippine Star, November 22, 2024]
The issue first emerged when the Office of the General Counsel started an investigation in October 2023 after receiving “credible information” that several employees under the two Monetary Board members had not been reporting for work but were receiving salaries.
https://www.philstar.com/business/2024/11/22/2401986/bsp-axes-4-crackdown-ghost-employees-continues
PHL’s largest co-op, Korean firm ink MOU for PHL’s First Survival School [BusinessMirror, November 22, 2024]
A Memorandum of Understanding (MOU) was signed recently between ACDI Multi-Purpose Cooperative (ACDI MPC), the largest cooperative in the country, and Safe Zone, a Korean company, at the Villamor Air Base Golf Club in Pasay City. The agreement marks a major milestone in the creation of the country’s first modern survival school.
Gokongweis ready to compete with Dali grocery chain [Inquirer Plus, November 22, 2024]
Gina Dipaling, RRHI vice president for corporate planning and investor relations, on Wednesday said they planned to open up to 300 new O!Save stores next year to compete against rapidly growing hard discount grocery chains, such as Dali Everyday Grocery.
https://plus.inquirer.net/business/gokongweis-ready-to-compete-with-dali-grocery-chain/
Cebu City to revoke business permits of those violating environmental laws [Cebu Daily News, November 22, 2024]
Starting in January 2025, Cebu City businesses that fail to comply with environmental laws risk losing their permits as the city government begins enforcing stricter regulations under the amended Sustainable Development Ordinance (City Ordinance 2754).
DTI to consumers: Beware of fake Highlands corned beef [Cebu Daily News, November 22, 2024]
To avoid counterfeit products, the DTI recommends in an advisory to buy only from authorized retailers. Consumers are also advised to avoid repacked products because they are likely fake.
https://cebudailynews.inquirer.net/607604/dti-to-consumers-beware-of-fake-highlands-corned-beef
DigiPlus expanding to Brazil, passes online gaming license qualification [GMA News Online, November 21, 2024]
The internet gaming company said the development advances DigiPlus into the final stages of the South American country’s licensing process, “bringing it closer to participation in Brazil’s newly regulated iGaming sector, one of Latin America’s most dynamic and rapidly growing gaming markets.”
Booksale says closing some branches as it ‘enters new chapter’ [ABS-CBN News, November 20, 2024]
But in a later post published at 7:46 p.m., Booksale clarified that it is not closing down. It also published an updated list of its branches that remain open. The updated list names 14 branches in Metro Manila, 9 in Southern Luzon, 7 in Northern Luzon, and 11 in Visayas and Mindanao for a total of 41 stores.
PH remains heavily reliant on imported vehicles [Philippine Daily Inquirer, November 20, 2024]
Seven in every 10 automotive vehicles sold in the Philippines today are still imported, highlighting the need to improve the capacity of local manufacturers to bring down the prices of automobiles in the country, according to a trade official.
https://business.inquirer.net/491168/ph-remains-heavily-reliant-on-imported-vehicles
PH-Cambodia taxation deal reset [The Manila Times, November 20, 2024]
In May, the Department of Finance (DOF) finalized a draft of the DTA, which aims to ease the double-taxation burden on workers and companies in both countries, remove barriers to more trade and investment opportunities, and promote cross-border economic activities.
https://www.manilatimes.net/2024/11/20/business/top-business/ph-cambodia-taxation-deal-reset/2007535
Vivant bags 15-year power supply deal for Palawan [Philippine Daily Inquirer, November 20, 2024]
Vivant told the local bourse Tuesday that Delta P. Inc., a subsidiary of Vivant Energy Corp., had emerged as the winning bidder from the recent power supply auction involving Palawan Electric Cooperative (Paleco).
https://business.inquirer.net/491152/vivant-bags-15-year-power-supply-deal-for-palawan
BSP, IMF concerned over risks tied to non-bank financial sector [The Philippine Star, November 20, 2024]
During the 2024 BSP-IMF Systemic Risk Dialogue in Cebu, BSP Governor Eli Remolona Jr. said the non-bank financial sector has noticeably grown since the global financial crisis.
Insurance industry nets P40 billion in 9 months [The Philippine Star, November 20, 2024]
Latest data released by the Insurance Commission (IC) showed that the net income of the industry went up compared to the revised P38.31 billion in the same period in 2023.
https://www.philstar.com/business/2024/11/20/2401419/insurance-industry-nets-p40-billion-9-months
House approves bill providing jobs for seniors, incentives for hiring elders [GMA News Online, November 19, 2024]
Specifically, private entities that employ senior citizens will be entitled to an additional deduction from their gross income, equivalent to 25% of the total amount paid as salaries, wages, benefits, and trainings provided to senior citizens, subject to the provision of Section 34 of the National Internal Revenue Code, as amended, provided that such employment will continue for a period of at least six months.
Medical spending remains out-of-pocket for many Filipinos, study finds [Philippine Daily Inquirer, November 19, 2024]
Forty-one percent of Filipinos who were recently surveyed revealed that their medical spendings are out-of-pocket, highlighting the huge portion of the population that has no sufficient health insurance coverage amid the high cost of these expenses.
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