Bureau of Internal Revenue Issuances
REVENUE MEMORANDUM CIRCULARS
RMC No. 130-2024
December 3, 2024
Circularizing the Implementing Rules and Regulations of Republic Act No. 11698, entitled “An act regulating the use and other activities related to vintage automobiles and other historical, classic, or collector motor vehicles, and providing for their exemption from the standards and restrictions set by laws, and regulations issued after the date of their manufacture”
RMC No. 131-2024
December 3, 2024
Publishing the full text of the October 14, 2024 letter from the Food and Drug Administration (FDA) of the Department of Health (DOH) endorsing updates to the list of VAT-exempt products under Republic Act (R.A.) No. 10963 (TRAIN Law) and R.A. No. 11534 (CREATE Act)
REVENUE DELEGATION OF AUTHORITY ORDERS
RDAO No. 27-2024
December 4, 2024
Delegates to Chief of Legal Division of RR No. 8A-Makati City the authority to sign specific documents in the Order in view of the approved leave of absence of RR No. 8A’s Regional Director.
Tax Law
REPUBLIC ACT No. 12022
Official Gazette / October 2, 2024
An act defining the crimes of agricultural economic sabotage, prescribing penalties therefor, vesting jurisdiction over such offenses with the court of tax appeals, providing mechanism for its implementation and enforcement, repealing for the purpose Republic Act No. 10845 or the “Anti-Agricultural Smuggling Act of 2018”
https://www.officialgazette.gov.ph/2024/09/26/republic-act-no-12022/
REPUBLIC ACT No. 12023- VAT on Digital Services
Official Gazette / October 3, 2024
AN ACT AMENDING SECTIONS 105, 108, 109, 110, 113, 114, 115, 128, 236, AND 288 AND ADDING NEW SECTIONS 108-A AND 108-B OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED.
https://www.officialgazette.gov.ph/2024/10/02/republic-act-no-12023/
REPUBLIC ACT No. 12066 – CREATE MORE
Official Gazette / November 13, 2024
AN ACT AMENDING SECTIONS 27, 28, 32, 34, 57, 106, 108, 109, 112, 135, 237, 237-A, 269, 292, 293, 294, 295, 296, 297, 300, 301, 308, 309, 310, AND 311, AND ADDING NEW SECTIONS 135-A, 295-A, 296-A, AND 297-A OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES
https://www.officialgazette.gov.ph/2024/11/08/republic-act-no-12066/
Tax And Business Related News
BIR WEEKENDER BRIEFS
Volume No. 15 Issue No 48 Week ending November 29, 2024
A number of criminal cases were filed by BIR regional offices under the Run After Tax Evaders (RATE) program against erring taxpayers between November 21 and November 25.
Click the link below to read the full news from the source:
https://bir-cdn.bir.gov.ph/BIR/pdf/v15n48 FINAL v2.pdf
Commissioner Lumagui & Integrity Management Program of the BIR featured during 5th State Conference on the United Nations Convention Against Corruption Implementation & Review in Malacañang
BIR Media Release
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. was featured during the 5th State Conference on the United Nations Convention Against Corruption (UNCAC) Implementation and Review last December 3, 2024 in Malacañang. “The BIR is grateful for being recognized as one of the government agencies found in compliance with the Integrity Management Program (IMP) under the United Nations Convention Against Corruption (UNCAC). From the BIR’s head office to our field offices, we have successfully implemented the IMP. The BIR is one with President Ferdinand R. Marcos Jr. in his vision of strengthening our anti-corruption mechanisms and reaffirming our place as a proactive member of the global community.” Commissioner Lumagui stated.
Click the link below to read the full news from the source:
https://bir-cdn.bir.gov.ph/BIR/pdf/PR94DEC0524..pdf
Lumagui: BIR Nationwide Operation against Illicit Vape Retailers/Resellers reaches 817 Illicit Vape Establishments raided, 563,284 Units/Pods seized, with Total Tax Liability of Php 415M after a month of raids; Report all Illicit Physical and/or Online Vape Stores to the BIR
BIR Media Release
Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. reports that after a month of its nationwide crackdown against illicit vape retailers/resellers, the BIR has raided 817 illicit vape retailers/resellers and seized 563,284 units/pods of vape. This will amount to an estimate total tax liability of Php 415,359,656.72, inclusive of penalties. The crackdown against illicit vape retailer/resellers started with Commissioner Lumagui’s nationwide raid last October 16, 2024. “817 illicit vape retailers/resellers raided. 563,284 units/pods of illicit vape seized. 415M in total tax liability. The BIR will continue its war against illicit vape. Report all stores with illicit vape to commissioner@bir.gov.ph” Commissioner Lumagui stated.
Click the link below to read the full news from the source:
https://bir-cdn.bir.gov.ph/BIR/pdf/PR93DEC0324.pdf
BIR recognized as Top Requested Agency at 2024 FOI Summit and Awards
BIR Media Release
The Bureau of Internal Revenue (BIR), under the leadership of Commissioner Romeo D. Lumagui, Jr., was lauded as one of the leading champions of the Freedom of Information (FOI) Program during the prestigious 2024 FOI Summit and Awards organized by the Presidential Communications Office (PCO) through its FOI-Program Management Office (FOIPMO). The BIR was recognized as one of the awardees under the Top Requested (1,000+) Category, a testament to the agency’s unwavering commitment in ensuring access to information and fostering transparency in public service.
Click the link below to read the full news from the source:
https://bir-cdn.bir.gov.ph/BIR/pdf/PR92DEC0224.pdf
Restaurant, warehouse closed for tax violations
The Philippine Star – The Freeman / Jonnavie Villa / November 30, 2024
CEBU, Philippines — A Chinese restaurant and a warehouse were temporarily shut down by the Bureau of Internal Revenue (BIR) in Central Visayas for numerous tax violations. Implementing its Oplan Kandado, BIR-7 personnel padlocked on Thursday, November 28, the 88 BBQ House in Barangay Mabolo, Cebu City and a warehouse in Barangay Subangdaku, Mandaue City due to the under declaration of the taxpayer whose name cannot be disclosed. BIR-7 Legal Officer Jay Rozen Bartazan said the owner of the two establishments has violated Section 115 of the National Internal Revenue Code of 1997 by not issuing receipts or invoices and failure to file value added tax (VAT) returns as well as understating taxable sales or receipts by at least 30 percent.
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https://www.philstar.com/the-freeman/cebu-news/2024/11/30/2404049/restaurant-warehouse-closed-tax-violations
Marcoses asked to pay P203-B overdue estate tax ‘At Ground Level’
The Philippine Star / Satur C. Ocampo / November 30, 2024
Considering the devastations wrought by recent typhoons in many parts of the country, an activist group has urged Marcos Jr. and his family to pay their P203-billion estate tax deficiency that fell due 25 long years ago. If paid, the estate tax deficiency could be used as seed money to fund urgently needed social services and reconstruction, said the Campaign Against the Return of the Marcoses and Martial Law (CARMMA). CARMMA called anew on the Bureau of Internal Revenue to issue a demand letter to the Marcoses to pay up, in compliance with the Supreme Court’s final judgment on the Marcos estate case issued in 1997. The ruling became executory in March 1999. Wryly, CARMMA remarked that it’s probably “too much to expect of the money-grubbing Marcoses to do their civic duty and voluntarily pay what they owed the government over the past 20 years.”
Click the link below to read the full news from the source:
https://www.philstar.com/opinion/2024/11/30/2403915/marcoses-asked-pay-p203-b-overdue-estate-tax
SEC extends deadline for lower fines to Dec. 31
Business World / Revin Mikheal D. Ochave / December 2, 2024
THE Securities and Exchange Commission (SEC) has extended the deadline to Dec. 31 for companies to apply for its incentive program, which reduces fines and penalties for late or non-filing of reportorial requirements. Memorandum Circular (MC) No. 17, signed on Nov. 28, extended the application deadline for the Enhanced Compliance Incentive Plan (ECIP) to Dec. 31, the SEC said in an e-mailed statement over the weekend. The ECIP’s original deadline was Nov. 30. The SEC said that over 3,200 corporations had applied and paid the ECIP fees as of Nov. 28. ECIP allows noncompliant, delinquent, suspended, or revoked corporations to pay fines and penalties for failure to submit their annual financial statements (AFS), general information sheet (GIS), and official contact details at lower rates. Applicant corporations must submit their latest AFS and GIS by Dec. 31. Under the ECIP, noncompliant and delinquent corporations can settle their fines and penalties for P20,000. Suspended and revoked registrations only need to pay 50% of their assessed fines and penalties, plus P3,060 to process their petition to lift the suspension or revocation order. Companies that fail to submit the complete requirements by Dec. 31 would be subject to the updated scale of fines and penalties implemented in April through MC No. 6.
Click the link below to read the full news from the source:
https://www.bworldonline.com/corporate/2024/12/02/638500/sec-extends-deadline-for-lower-fines-to-dec-31/
House committee approves tax perks section of decarbonization measure
Business World / Kenneth Christiane L. Basilio / December 2, 2024
A HOUSE OF REPRESENTATIVES committee approved on Monday the tax incentive package contained in a bill seeking to regulate the low-carbon economy. The House ways and means committee approved the tax incentives section of the bill, to be granted to companies developing “innovative technologies” that reduce greenhouse gas emissions. “Investments in emerging low-carbon technologies by Covered Enterprises shall be eligible for income tax holidays and enhanced deductions on research and development expense… in accordance with CREATE More Act,” according to the amended version of the unnumbered substitute bill’s Section 35. Covered enterprises are “large enterprises and medium-sized enterprises whose emissions exceed a specific threshold set by the Climate Change Commission,” according to a copy of the bill obtained by BusinessWorld. Power generation, transport, industrial processing, agriculture, and waste management industries fall under this category.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/12/02/638813/house-committee-approves-tax-perks-section-of-decarbonization-measure/
PEZA investment approvals top P200 billion in first 11 months
Business World / Justine Irish D. Tabile / December 2, 2024
THE Philippine Economic Zone Authority (PEZA) said it approved P201.551 billion worth of investment applications in the first 11 months, surpassing the agency’s target for the full year. PEZA issued the statement on Monday following a board meeting on Nov. 29 at the Cavite Economic Zone. “As expected, investment approvals would pick up in the last quarter of the year,” PEZA Director General Tereso O. Panga said. “So far, we have achieved P201 billion, with one more board meeting left in December,” he added. He said that numbers reflect investor confidence in the Philippines and in PEZA due to the government’s investor-friendly policy direction partnered with the ease of doing business inside economic zones.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/12/02/638812/peza-investment-approvals-top-p200-billion-in-first-11-months/
In Focus: Navigating tax exemptions and incentives in the real estate industry “Let’s Talk Tax”
Business World / Kim M. Aranas / December 2, 2024
As the holiday season draws near, it’s a good time to examine the tax exemptions and privileges available to businesses in real estate under the Tax Code. These statutory benefits, specifically designed to support the real es-tate industry, are primarily in the form of value-added tax (VAT) exemptions, income tax holidays, and other related fiscal incentives. For real estate transactions, understanding the distinction between ordinary and capital assets is critical, as it determines whether VAT applies. The Tax Code, under Section 109, outlines several key exemptions for real property transactions, which we will explore in detail.
VAT EXEMPTION ON THE SALE OF CAPITAL ASSETS – Under Section 109(P) of the Tax Code, the sale of real properties not primarily held for sale or lease in the ordinary course of trade or business is exempt from VAT. This applies to real properties classified as capital assets — those that are not intended for sale or use in a business.
VAT EXEMPTION ON LOW-COST AND SOCIALIZED HOUSING – The sale of real properties used for low-cost and socialized housing enjoys VAT exemption under the provisions of the Urban Development and Housing Act (RA 7279). As defined by the law and supported by Revenue Regulations (RR) No. 13-2018, low-cost housing refers to projects designed for low-income families, while socialized housing covers housing for the underprivileged and homeless citizens. Under the Joint Memorandum Circular No. 2024-001, both the Department of Human Settlements and Urban Development (DHSUD) and the National Economic and Development Authority (NEDA) have set specific price ceilings for socialized and low-cost housing projects. These ceilings range from P300,000 for socialized housing to up to P3 million for low-cost housing units. Developers of these housing projects are entitled to VAT exemption, and the sale of property to qualified beneficiaries is also exempt from income tax and creditable withholding tax.
INCOME TAX HOLIDAY FOR SOCIALIZED HOUSING DEVELOPERS – Developers of socialized and low-cost housing can avail of the Income Tax Holiday (ITH) by registering with the Board of Investments (BoI). In 2023, the BoI amended the 2022 Strategic Investment Priority Plan (SIPP) to include low-cost housing projects with a selling price of up to P3 million. This amendment opens the door for more developers to benefit from ITH, which are granted for a period starting from the project’s Start of Commercial Operations (SCO). Under the CREATE MORE Act (RA No. 12066), domestic market enterprises duly registered with the BoI can avail of the ITH for a period of four to seven years, followed by the Enhanced Deduction Regime (EDR) for 10 years, or EDR for a maximum period of 14 to 17 years, depending on location and industry priorities. The SIPP also requires that at least 20% of the project’s area and floor space be dedicated to socialized housing. Once a project is registered with the BoI, it may be exempt from corporate income tax during the ITH period, and the developer is also exempt from creditable withholding tax.
VAT EXEMPTION ON RESIDENTIAL PROPERTIES SOLD FOR P3.6 MILLION OR LESS – As of Jan. 1, 2024, a new VAT exemption applies to the sale of residential units — such as house and lot packages, condominium units, and other residential dwellings — valued at P3.6 million or below, as outlined in RR No. 1-2024. To qualify for this exemption, the property must be used for residential purposes. Importantly, if multiple adjacent properties are sold to the same buyer with the intent to be used as a single residential area, they will still be con-sidered VAT-exempt as long as the aggregate value does not exceed P3.6 million. However, this exemption does not extend to parking lots, even if sold together with a condominium unit, as the sale of parking spaces is considered a separate transaction and remains subject to VAT.
VAT EXEMPTION ON RESIDENTIAL LEASE AGREEMENTS – For real estate lessors, the lease of residential units with a monthly rental of P15,000 or less is VAT-exempt. This includes apartments, houses, dormitories, and other similar residential properties. Notably, the exemption applies even if the total annual rental payments exceed the VAT threshold of P3 million, as long as the individual monthly rent does not exceed P15,000.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/12/02/638808/in-focus-navigating-tax-exemptions-and-incentives-in-the-real-estate-industry/
CREATE MORE roadshow to pitch investors next year
Business World / Justine Irish D. Tabile / December 2, 2024
SECRETARY Frederick D. Go, the special assistant to the President for investment, said a roadshow is being planned next year for the US, Japan, South Korea, and the European Union upon completion of the implementing rules and regulations (IRR) of the amended Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. Mr. Go said in a statement over the weekend that the roadshow aims to highlight the advantages of the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act. “The Board of Investments, together with the investment promotion agencies, is organizing a roadshow to all the countries that have great interest in investing in the Philippines,” according to Mr. Go, who heads the Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA). According to OSAPIEA, the US delegation at the third Luzon Economic Corridor (LEC) Steering Committee held last month proposed the roadshow showcasing CREATE MORE.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/12/02/638524/create-more-roadshow-to-pitch-investors-next-year/
BIR seizes vape pods with P415.36-M tax liability
Business World / Aubrey Rose A. Inosante / December 3, 2024
THE Bureau of Internal Revenue (BIR) said it confiscated more than half a million vape pods from illicit sellers with an estimated total tax liability reaching P415.36 million. “After a month of its nationwide crackdown against illicit vape retailers or resellers, the BIR has raided 817 illicit vape retailers or resellers and seized 563,284 units of vape,” BIR said in a statement on Tuesday. This will amount to an estimated total tax liability of P415.36 million inclusive of penalties, it added.
Click the link below to read the full news from the source:
https://www.bworldonline.com/the-nation/2024/12/03/639117/bir-seizes-vape-pods-with-p415-36-m-tax-liability/
BIR’s vape crackdown nets P415 million in tax liabilities across 800 raids
BIlyonaryo.com / December 3, 2024
The Bureau of Internal Revenue (BIR) has reported significant progress in its ongoing crackdown against illicit vape retailers and resellers, seizing over 563,000 units of illegal vape products nationwide during a month-long series of raids. In total, 817 establishments were raided, and the government now estimates a tax liability of P415 million, including penalties, from these operations.
Click the link below to read the full news from the source:
https://bilyonaryo.com/2024/12/03/birs-vape-crackdown-nets-p415-million-in-tax-liabilities-across-800-raids/business/
Compliant power cooperatives to be granted exemption from local taxes
Business World / Sheldeen Joy Talavera / December 4, 2024
ELECTRIC COOPERATIVES (ECs) found compliant with the financial and operational standards set by the National Electrification Administration (NEA) will be exempt from tax, fees, and charges imposed by local government units (LGUs), according to the Department of Energy (DoE). The arrangement is governed by the Republic Act (RA) No. 7160 or the Local Government Code of 1991 and RA No. 10531 or the National Electrification Administration (NEA) Reform Act of 2013. “This local tax exemption is a significant milestone for our qualified ECs, as it directly translates to reduced financial burdens that can be reinvested into improving services and achieving 100% total electrification,” Energy Secretary Raphael P.M. Lotilla said in a statement. Local taxes are collected by provinces, cities, municipalities, and barangays. They include real property tax, business tax, franchise tax, and tax on transfer of real property ownership. The circular requires ECs to obtain an annual certificate of compliance from the NEA, demonstrating their adherence to the regulator’s prescribed financial and operational standards. To qualify for the certification, the cooperatives must achieve at least a 75% rating based on NEA’s compliance parameters. However, all ECs remain subject to regulated and reasonable administrative costs imposed by LGUs, in accordance with the Joint Memorandum Circular No. 2019-01 signed by the Department of the Interior and Local Government (DILG) and the Department of Finance (DoF). “This circular established the guidelines for reasonable rates of regulatory fees and services charges levied by LGUs. These costs include fees for business permits, mayor’s permits, barangay clearances, community tax certificates, and other charges such as those for water consumption, electricity, and toll fees,” the DoE said. The NEA will issue the guidelines governing the issuance of certificates of compliance within 15 days from the effectivity of the joint circular, according to the DoE.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/12/04/639415/compliant-power-cooperatives-to-be-granted-exemption-from-local-taxes/
Coming soon: VAT in the digital age “Taxwise or Otherwise”
Business World / Clarissa Mae Sy / December 4, 2024
For some people, a typical weekend is spent curling up on the couch with a bowl of popcorn, immersed in their TV shows from their favorite streaming service. This, along with many other online consumption habits, is expected to become a bit more expensive as subscription fees and other digital services are likely to increase when 12% VAT starts applying to digital services supplied by non-resident digital service providers (DSPs) whose products are consumed in the Philippines. On Nov. 12, the Bureau of Internal Revenue (BIR) conducted a public consultation to solicit inputs on the proposed implementing rules and regulations (IRR) to Republic Act No. 12023 covering VAT on Digital Services. The BIR is expected to release the final IRR by January, and non-resident DSPs will start being liable for VAT 120 days after. Let’s discuss some salient provisions of the law and draft IRR, as well as some key takeaways.
DIGITAL SERVICES – This broad definition potentially extends to almost all, if not all, services which are performed virtually or over the internet. For instance, in the draft IRR, online consulting services (e.g., through virtual calls or e-mails) provided by foreign nationals, even if conducted remotely, may be at risk of being subject to VAT.
PLACE OF CONSUMPTION – While pegging the VAT to the location of the payor would simplify tax administration, doing so raises concerns regarding the consistency with the law’s intent. Following the language of the law, consumption outside the Philippines would not trigger VAT. On the other hand, in scenarios where a portion of the service fee is attributable to services consumed abroad, bifurcating revenues to ensure proper VAT application might impose additional compliance challenges on taxpayers and hinder effective implementation of the law by the BIR.
REGISTRATION – The law requires all non-resident DSPs whose gross annual sales are expected to exceed P3 million to register for VAT. However, in the draft IRR, it appears that all non-resident DSPs selling to Philippine customers are required to register for VAT, regardless of whether or not the P3 million threshold is breached. The BIR will need to clarify this matter in the final IRR to be issued to avoid any confusion.
VAT COMPLIANCE– For simplicity and considering the existing reverse charge mechanism under Section 114 of the Tax Code even prior to the new VAT legislation, non-resident DSPs are only liable to remit the VAT on their supply of digital services in business-to-consumer (B2C) transactions, and in case they are classified as an e-marketplace (with respect to sales of non-resident sellers that go through their platform). On the other hand, business-to-business (B2B) transactions, similar to the collection method under the old VAT rules, should be accounted for and remitted by the Philippine resident business consumer.
DETERMINING THE BUSINESS STATUS – In determining a contracting party’s business status (i.e., engaged in business or not), both the DSPs and consumers may rely on the documents submitted by their contracting parties. The draft regulations did not specify the required documentation to verify such status, although it was suggested during the public consultation that this may include the tax registration certificate (BIR Form No. 2303) of the consumers. This could be burdensome, especially for non-resident DSPs with numerous transactions.
Click the link below to read the full news from the source:
https://www.bworldonline.com/economy/2024/12/04/639413/coming-soon-vat-in-the-digital-age/
January-November PEZA approvals hit P201.5 billion
The Philippines Star / Louella Desiderio / December 4, 2024
MANILA, Philippines — Investments approved by the Philippine Economic Zone Authority (PEZA) have reached P201.55 billion as of end-November, surpassing the full-year 2024 target. The Department of Trade and Industry (DTI) said the investment approvals during the 11-month period already exceeded this year’s P200-billion target. The approved investments cover 239 new and expansion projects. These projects are expected to generate over $3.9 billion in potential export revenues and create more than 70,000 jobs. In November alone, the PEZA approved P77.794 billion worth of projects that are expected to generate $831.019 million in exports and 30,623 direct jobs.
Click the link below to read the full news from the source:
https://www.philstar.com/business/2024/12/04/2404782/january-november-peza-approvals-hit-p2015-billion
Clarifying the validity period of tax exemption certificates
The Manila Times / Aileen P. Melchor/ December 4, 2024
TAX exemptions play a crucial role in supporting organizations that drive social progress, cultural enrichment, and economic growth. By exempting non-stock and non-profit organizations, educational institutions, and similar entities from income tax, the government recognizes their invaluable contributions to society. In 2019, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) 38-2019, which set a standard three-year validity period for Certificates of Tax Exemption (CTEs) under Section 30 of the National Internal Revenue Code (NIRC) of 1997. While this was meant to simplify the process, the BIR recognized confusion still exists regarding the validity of a CTE in the implementation of other laws and revenue issuances. To address the problem, the tax agency recently issued Revenue Memorandum Circular (RMC) 123-2024 to clarify the application of the three-year validity rule specified under RMO No. 38-2019.
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https://www.manilatimes.net/2024/12/04/business/top-business/clarifying-the-validity-period-of-tax-exemption-certificates/2015133
What are digital services for VAT purposes?
The Manila Times / Euney Marie Mata-Perez/ December 4, 2024
REPUBLIC Act (RA) 12023, which imposed value-added tax (VAT) on digital services and amended several provisions of our National Internal Revenue Code (Tax Code), is a game changer in VAT taxation in the Philippines. VAT is a transaction tax. For the government to be entitled to impose it, a transaction must occur or services must be rendered in the Philippines. RA 12023, however, expanded the “nexus” of VAT taxation on digital services to provide that “digital services delivered by nonresident digital service providers shall be considered performed or rendered in the Philippines if the digital services are consumed in the Philippines.” This new rule now expands the term “performance or delivery of service” to include “consumption.” In other words, if the service is consumed or used by the customer or client in the Philippines, it shall be considered rendered or performed in the Philippines, and thus, the government shall have the right to impose VAT on those services. However, it should be emphasized that this new rule applies only to digital services, and not to all types of services. What are digital services for VAT purposes then? RA 12023 introduced a definition of “digital services” in Section 108-A of the Tax Code. It expressly provides that the term “digital service” shall refer to any service that is supplied over the internet or other electronic network with the use of information technology and where the supply of the service is essentially automated. Digital services shall include online search engine, online marketplaces or e-marketplaces, cloud services, online media and advertising, online platform or digital goods.
Click the link below to read the full news from the source:
https://www.manilatimes.net/2024/12/05/business/top-business/what-are-digital-services-for-vat-purposes/2016135
US economist says high tobacco tax incentivizes illicit trade in PH
Inquirer.Net / December 5, 2024
Excessive tax rate increase on tobacco products can incentivize illicit trade, resulting in lower government revenues, according to a noted American economist. Dr. Arthur Laffer, founder and chairman of Laffer Associates, an economic research and consulting firm, lauded the Philippines’ efforts to simplify its tobacco tax system but cautioned against excessive tax rate increases. “When a commodity becomes too expensive for consumers due to taxation, they will reduce consumption of that commodity or substitute away from that highly taxed commodity in part through consumption of illicit goods,” he said. He said the mechanism that resulted in continuous annual tax rate increases to achieve continuous revenue growth has clearly taken tax rates too high and failed to generate the anticipated revenue. “Due to declining tax revenue and increased growth in the illicit trade of tobacco, it is time to reevaluate the optimal cigarette tax rate,” he said. Following the passage of Republic Act No. 11346, the Tobacco Tax Law of 2019, the excise tax on cigarettes rose to P50 per pack on January 1, 2021, with a 5 percent annual increase, now at P63. Vapor products are taxed differently: P54.6/ml for nicotine salt and P63/10 ml for freebase.
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https://business.inquirer.net/494308/us-economist-says-high-tobacco-tax-incentivizes-illicit-trade-in-ph#ixzz8tbjvG6vh
Approved BOI projects surge to record P1.58 trillion
The Philippine Star / Louella Desiderio / December 5, 2024
MANILA, Philippines — Investments approved by the Board of Investments (BOI) hit a record high of P1.58 trillion in 11 months, driven primarily by projects in the energy sector. In a statement yesterday, the Department of Trade and Industry (DTI) said the project approvals by its attached agency as of end-November are 44 percent higher than the P1.101 trillion registered in the same period last year. The approved investments in the 11-month period also bring the BOI closer to the upper limit of its investment approvals goal of P1.6 trillion for this year.
Click the link below to read the full news from the source:
https://www.philstar.com/business/2024/12/05/2405025/approved-boi-projects-surge-record-p158-trillion
‘P88 billion in taxes lost from 8.5 million fake PWD cards’
The Philippine Star / Marc Jayson Cayabyab / December 6, 2024
MANILA, Philippines — The government has lost P88.2 billion in taxes due to the surge of unscrupulous people using fake disability (PWD) cards to take advantage of the discount and abuse the privilege, a Senate investigation showed. Sen. Sherwin Gatchalian presided over yesterday’s Senate ways and means committee that sought to investigate the proliferation of fake PWD cards, which are bought at social media market places for just P500 to P1,500.
Click the link below to read the full news from the source:
https://www.philstar.com/headlines/2024/12/06/2405344/p88-billion-taxes-lost-85-million-fake-pwd-cards
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