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80Th Issue Mar. 29 “Radiating positivity, creating connectivity” CEBU BUSINESS Room 310-A, 3rd floor WDC Bldg. Osmeña Blvd., Cebu City You may visit Cebu Business Week WEEK Facebook page. March 29 - April 4, 2021 Volume 3, Series 80 www.cebubusinessweek.com 12 PAGES P15.00 LAW REDUCES TAX FOR FIRMS Duterte signs CREATE into law; corporate income tax cut to 20-25% PRESIDENT Rodrigo R. The imposition of Im- By: ELIAS O. BAQUERO have been vetoed by the Presi- unnecessary, and weakens the Duterte has signed into law properly Accumulated Earn- dent: fiscal incentives system. last March 26, 2021 Republic ings Tax (IAET) is repealed. in the registered project or ac- Ø Increasing VAT-ex- Ø Allowing existing Act (RA) No. 11534 or the Cor- The new law also pro- tivity. empt threshold on sale of resi- registered activities to apply porate Recovery and Tax In- vides that the definition for The Value-Added Tax dential lot from P1.5 million to for further extensions for the centives for Enterprises (CRE- purposes of applying the tax (VAT) on importation and P2.5 million and house and lot same activity. ATE). free exchange provision under VAT zero-rating on local pur- from P2.5 million to P4.2 mil- Ø Limitations on the The new law provides that Section 40(c)(2) is expanded. chases shall only apply to lion. The reason for the veto is power of FIRB. Reason: The effective July 1, 2020, cor- Prior Bureau of Internal Reve- goods and services directly that tax exemption is highly oversight functions of the Fis- porate income tax rate is re- nue (BIR) ruling or confirma- and exclusively used in the distorting and prone to abuse. cal Incentives Review Board duced from 30 percent to 20 tion shall not be required for registered project or activity Ø The 90-day period for (FIRB) will ensure the proper percent for domestic corpora- purposes of availing the tax by a RBE. the processing of refunds may grant and monitoring of tax tions with net taxable income exemption of the exchange. For investments prior to cause damage of more delays incentives. These powers must not exceeding P5 million and According to the new law, the effectivity of CREATE, to the prejudice of taxpayers. remain plenary over those of with total assets not exceeding qualified export enterprises Registered Business Enter- Reason: the legislature, De- the investment promotion P100 million. shall be entitled to four to sev- prises (RBEs) granted only an partment of Finance and BIR agencies. All either domestic cor- en years. Income Tax Holiday ITH shall continue with the should come up with mech- Ø Specific industries porations or resident foreign (ITH) to be followed by 10 availment of the ITH for the anism to streamline the pro- mentioned under activi- corporation will be subject to years five percent Special Cor- remaining period of the ITH cessing of tax refunds in a sep- ty tiers. Reason: CREATE 25 percent income tax. porate Income Tax (SCIT) or plus five percent GIT or cur- arate bill. Act must be kept flexible to The law also provides that enhanced deductions (ED). rently enjoying five percent Ø The definition of in- be able to keep up with the effective January 1, 2021, in- The qualified domestic Gross Income Tax (GIT) al- vestment capital to exclude changing times. come tax rate for nonresident market enterprises shall be lowed to avail of the five per- land and working capital. Rea- Ø Provision granting the foreign corporation is reduced entitled to four to seven years cent GIT for 10 years. son: This may lead to an un- President the power to exempt from 30 percent to 25 percent. to be followed by five years The following line items derestimation of investment any Investment Promotion The Minimum Corporate ED. promotion Agencies (IPA) from the re- Income Tax (MCIT) rate is re- The reg- performance. form. Reason: This could be- duced from two percent to one istered en- Ø Re- come highly political tool. percent effective July 1, 2020 terprises are dundant in- Ø Automatic approval to June 30, 2023. exempt from centives for of incentives. Reason: FIRB On the other hand, the customs duty domestic or the IPA should be allowed percentage tax is reduced on importa- corporations. to carefully review the appli- from three percent to one per- tion of capital Reason: The cation for tax incentives since cent effective July 1, 2020 to equipment, SCIT for do- these are privileges granted by June 30, 2023. raw mate- mestic enter- the State. The rate of proprietary ed- rials, spare prise, which The CREATE Law is set ucational institutions and hos- parts, or ac- in lieu of all to take effect 15 days after its pital is reduced from 10 per- cessories di- local and na- complete publication in the cent to one percent effective rectly and ex- tional taxes Official Gazette or in the news- July 1, 2020 to June 30, 2023. clusively used PRESIDENT RODRIGO ROA DUTERTE (FILE PHOTO) is redundant, paper of general circulation. 2 March 29 - April 4, 2021 Cebu Business Week NEWS 20 vaccination sites eyed in Cebu AT LEAST 20 vaccina- some problems as expected. tion sites will be launched in It wasn’t all smooth sailing Cebu. but now they know what to In support of the vaccine do,” he added. rollout in Cebu, a ceremonial Aside from Cebu, officials signing of a memorandum of are also looking to expand agreement (MOA) the initiative to the rest of The MOA signing led by the Visayas, said Department the Office of the Presiden- of Health in Central Visayas tial Assistant for the Visayas (DOH-7) director Dr. Jaime (OPAV), was a public-private Bernadas. partnership under the Proj- Bernadas said for the ect Balik Buhay (PBB government’s inoculation With this, PBB chairper- program to be effective, they son Edmund Liu, said the have to inoculate at least 70 PBB is targeting to put up percent of the healthcare 20 vaccination centers for PROJECT BALIK BUHAY IS TARGETING TO PUT UP 20 VACCINATION CENTERS FOR THE PUBLIC workers here. the rollout of the vaccination ROLLOUT OF THE VACCINATION PROGRAM HERE. OPAV PHOTO “We are in the final leg program. of our response and this is Presidential Assistant with medical institutions of our frontliners. Within “At first when the vac- the vaccination. We have en- to the Visayas Sec. Michael helping to provide the man- this week, we may start with cines arrived at the DOH, countered challenges such as Dino also said some of these power support. our senior citizens and those they were able to inoculate misinformation. But these vaccination sites will be “In a day or two, we will with co-morbidities,” said the frontliners already. Of vaccines are safe and effec- housed in malls and hotels be done with the vaccination Dino. course, they experienced tive,” said Bernadas. Napocor ends presentation of evidence to ERC on UCME THE National Power to every power consumer lion or P0.20055 per kWh or base under a 1993 Executive Corporation has terminated from P0.0591 per kilowatt 20.05 per kWh of UCME for Order issued by President its presentation of evidence hour (kWh) or 5.91 centa- 2021 alone. Fidel V. Ramos at the time to the Energy Regulatory vos per kWh for 2018 repre- Junia said that all pow- of the power crisis brought Commission (ERC) in its senting the claimed revenue er consumers in the entire on by the administration of application for Universal shortfall in the total amount country are paying UCME former President Corazon C. Charge for Missionary Elec- of P5.918 billion. in the total amount of P15.6 Aquino. trification (UCME) adjust- The regulatory commis- billion, and if the NTC appli- NPC’s original order un- ment. sion recorded the petition cation will be approved by der its charter is 10 percent. UCME is an additional under ERC Case No. 2020- ERC, all power consumers The two percent difference charge to power consum- 004. Power Advocate Romeo will pay P5 billion more. can be substantial. ers throughout the country “Butch” Junia is one of the “The presentation of Junia said that under the to subsidize power rates in intervenors. NPC evidence is almost done law, this subsidy should have areas not connected to the The ERC’s decision will and after our position paper/ been phased out five years power grid like Bantayan come out after all position memoranda the ERC’s de- ago, and he does not know Island and Camotes Island, papers/memoranda are filed. cision should be out,” Junia why UCME is still there both in Cebu. Junia said that NPC also said. which is an additional bur- On record, NPC has filed filed an application before Junia said that under this den to all power consumers a petition before the ERC ERC under Case No. 2020- application, NPC is charging in the entire country. ELIAS asking for adjustment charge 011 asking for P20.055 bil- ROMEO “BUTCH” JUNIA a 12 percent return on rate O. BAQUERO PagIBIG Fund urges employers to enroll employees in loyalty card THE Home Develop- said that they have already to go to PagIBIG office if a said. ment Mutual Fund popular- partnered with 380 estab- member wants to know his “When you wake up in the ly known as PagIBIG Fund lishments which are giving funds, renew his short-term morning, you can open your is strongly campaigning for discounts like pharmaceu- loan, or file a multipurpose computer, go to the PagIBIG employers to enroll their em- ticals, shipping companies, loan.
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