BIR Collection for October 2014 Grew by P 6.21 Billion

BIR Collection for October 2014 Grew by P 6.21 Billion

 

For the month of October 2014, the BIR collected Php101.8 billion in tax revenues, Php6.2 billion or 6.5% more than collections made in October 2013.

 

For October 2014, collections from BIR operations amounted to Php99.64 billion, PhP6.42 billion or 6.88% more than collections made in October 2013.  Collections from non-BIR operations amounted to Php2.16 billion, Php204 million or 8.6% less than the collections made in October 2013.  

 

Collections by the Regional Offices amounted to PhP39.61 billion, or Php6.89 billion or 21.08% more than the collections made in October 2013.  While collections by the Large Taxpayers Service amounted to PhP60.03 billion, PhP476.61 million or 0.79% less than the collections made in October 2013.

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Customs employee nabbed in entrapment operation after extortion try

Customs employee nabbed in entrapment operation after extortion try

 

In its continuous effort to rid itself of scalawags in its ranks, the Bureau of Customs (BOC) led an entrapment operation against one of its employees who’s trying to extort money from two student-trainees of a brokerage firm.

 

In an entrapment operation led by the Bureau’s Intelligence Group (IG) last Wednesday, November 12, a 12-year Customs employee Aristotle Tumala was nabbed after receiving P7,000 in marked money from two student-trainees who are seeking the release of tax-exempt imports of Panay Power in the Port of Iloilo. The trainees are graduating students who are taking up BS Customs Administration and are doing internship at a licensed brokerage firm as part of their on-the-job training course.

 

When the two trainees went to Tumala who is working at the office of the Tax-Exempt Division as administrative aide for the processing and releasing the endorsement for release of the shipment, Tumala allegedly said there is a problem with their papers and ‘kailangan ng ulo ng aso’. Sensing that the ‘ulo ng aso” was a bribe Tumala was asking for so they asked how much, to which Tumala allegedly said P7,000.

 

The trainees then reported the incident to the IG officials led by Customs Deputy Commissioner Jessie Dellosa. The entrapment operation was quickly mobilized by Dellosa together with Customs Director Willie Tolentino and the suspect was immediately apprehended after receiving the marked money. Tumala is now facing criminal and administrative charges.

 

“We are doing this to rid the Customs of the culture of corruption that has plagued the Bureau and to show that we mean business in reforming the BOC. This is also to show everybody especially these students that there is no room for corruption in the Bureau of Customs. You may thrive now or get away with your extortion activities but we will still get you in the end,” Dellosa said.

 

“We commend these students for their bravery, courage and integrity. With their full cooperation, we were able to catch this erring employee with his extortion attempt. We look forward to working with them as licensed Customs brokers who we know will live by a code of honesty, professionalism, and integrity,” Dellosa added.

 

According to brokers, ‘ulo ng aso’ is a code word for money because of a small design feature on the upper left portion of the P1,000 bill resembling the head of a dog.

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Philippines Joining OECD Committee on Fiscal Affairs

Philippines Joining OECD Committee on Fiscal Affairs

Philippines set to steer international efforts to address base erosion and profit shifting


The Philippines is set to take a major role in steering the global response to base erosion and profit shifting through its involvement in the Organisation for Economic Cooperation and Development’s (OECD) Committee on Fiscal Affairs (CFA) beginning January 2015. Joining the CFA places the Philippines at the forefront of the joint effort from both developed and developing economies in addressing troubling trends in unfair and unjust tax avoidance and evasion.

Base erosion and profit shifting (BEPS) by multinational enterprises, according to the OECD, is a “global problem which requires global solutions.” Exploiting gaps, mismatches, and asymmetries in domestic and international tax rules, BEPS artificially erodes the tax base by shifting profits to low or no-tax locations, where little to no economic activity and value creation has taken place.


Taking the lead through the CFA–the steering, standard-setting, and decision-making body of the OECD–the Philippines will use its seat to present developing country perspectives and priorities, as well as shape strategies, tools, and other outputs to curb the global BEPS phenomenon.


Commissioner Kim Henares of the Bureau of Internal Revenue, who has recently been appointed by Ban Ki-moon as a UN international tax expert, welcomed the development, saying, “We look forward to developing international tools to combat base erosion and profit shifting. Together, we can address a fundamentally unfair practice where multinationals make a huge profit in countries they pay little to no taxes to. We expect these corporations to at least contribute to building and developing the nations they made huge profits from.”

While most tax planning resulting to BEPS is legal due to the said gaps and loopholes, the double non-taxation it engenders distorts competition and investment decisions. More importantly, BEPS is an issue of fairness, especially for developing countries who expect revenues from corporate income taxes when multinationals make profits in their respective jurisdictions.

Referencing the recently concluded International Tax Forum organized by the Department of Finance (DOF), Commissioner Henares added, “Living in an increasingly globalized world requires governments to adapt and update tax policy and enforcement strategies. International cooperation is key if we want to raise sustainable amounts of revenues to continue funding growth and investments to our people and country.”

This initiative is also consistent with the Philippines’ need to rationalize fiscal incentives, a DOF priority bill on which is pending in Congress. While empirical evidence shows that granting of tax incentives is not a key motivation for multinationals on investment locations, it remains a major source of revenue loss for developing economies. Such revenue losses deprive governments of the capacity to invest in areas that actually boost investment, like infrastructure, health, and education, the OECD says.

The OECD strategy hinges on 3 main pillars: the coherence of corporate tax at the international level, the realignment of taxation and substance, and transparency coupled with certainty and predictability. Addressing BEPS will require multilateral cooperation on an international instrument that will give countries the tools they need to ensure that profits are taxed where economic activities generating the profits are performed and where value is created.

The Philippines is also invited to the 1st BEPS Technical Meeting for Partner Countries on 10-11 December 2014 in Paris, France. Joined by Albania, Jamaica, Kenya, Peru, Senegal, Tunisia, and many other countries yet to confirm, the Philippines will discuss participation and prioritization in the project. OECD and the donor community will also convene to discuss ways to build developing country capacity to counter the rising trend in BEPS.

According to the OECD, all eight non-OECD G20 countries, as well as OECD Accession countries (Argentina, Brazil, China, Colombia, India, Indonesia, Latvia, Russia, Saudi Arabia and South Africa) are “Associates” in the BEPS Project while 89developing countries engaged in the first 12 months of the project. Stakeholder input from business, civil society, and other international organizations has also been actively sought.

The OECD initiative plans to roll out outputs by September 2015 and unveil the multilateral instrument sometime in December 2015.

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Statement of Undersecretary GIL BELTRAN on inflation rate for October 2014

Statement of Undersecretary GIL BELTRAN

on inflation rate for October 2014

 

“Headline inflation rate has decelerated to 4.3% in October 2014. This represents a decline by 0.1 percentage point from the 4.4% rate of the previous month. The three-month moving averages over the past three months shows a more or less declining trend in inflation rate. Meanwhile, core inflation, which excludes certain key energy and food items, has likewise decelerated to 3.2% in October. Its three-month moving average rate, however, has stood at 3.3%, the same level as it had in September but greater than the 3.1% it had in August.


Inflation Rate (%) Aug-2014 Sep-2014 Oct-2014
Headline

4.9

4.4

4.3

Headline 3-month moving average

4.7

4.7

4.5

Core

3.4

3.4

3.2

Core 3-month moving average

3.1

3.3

3.3

Source of Basic Data: PSA

“The deceleration in inflation rate in October may be traced to food price decreases. Food items account for nearly 40% of the CPI commodity basket. Food price inflation declined to 7% in October from 7.4% the following month. Another heavy-weight in the index is the price of housing, utilities and fuels, accounting for nearly a quarter of the index. While the average price changes of this commodity group has been rather low, in fact twice lower than the overall price index, it has inched up by 0.2 percentage points to reach 2.4% in October. This partially offset the stabilization in food prices for the same month. All the average prices of major commodity groups, with the exception of food and education, grew slower than the overall rate.


Major Commodity Group and Selected Items

Weight

Inflation Rate (%)

Aug-2014 Sep-2014 Oct-2014
All Items

100.00

4.9

4.4

4.3

Food and non-alcoholic beverages

38.98

8.3

7.4

7.0

    Bread and Cereals

10.7

8.8

9.0

    Rice

13.2

10.7

10.9

Alcoholic beverages and Tobacco

1.99

3.5

3.5

3.5

Clothing and footwear

2.96

3.4

3.6

3.4

Housing, water & electricity, Gas and Other Fuels

22.46

2.7

2.2

2.4

    Actual Rentals for Housing

1.8

1.9

2.0

    Electricity, Gas and Other Fuels

4.6

2.4

3.2

Furnishings, household equipment

3.22

2.7

2.8

2.8

Health

2.99

3.3

3.5

3.5

Transport

7.81

1.1

0.7

0.8

Communication

2.26

-

0.1

0.1

Recreation and Culture

1.93

1.3

1.5

1.5

Education

3.37

5.1

5.1

5.1

Restaurants

12.03

1.7

1.8

1.7

Source: PSA

“While the overall food price inflation has eased a bit in October, major food items, prices of rice and bread and cereals, have shown some upward pressure. The rate of increases of average price of bread and cereals stood at 9% in October, up from the 8.8% it registered the month before. Likewise, average price of rice has risen by nearly 11% in October.  This is due to the delayed onset of the rice harvest in some regions caused by dry weather conditions.

“The prices of food items have to be stabilized as food accounts largely in the budget of poor families. This requires preemptive action by Department of Agriculture to facilitate movement from surplus regions to deficit regions. The government will closely monitor and minimize upward price movements.  

 

“The lower inflation in October will enable BSP to maintain accommodative monetary policy that will boost the country’s capability to sustain economic growth during the last months of 2014.”

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Smuggling raps filed against illegal rice trader

Smuggling raps filed against illegal rice trader

 

The Bureau of Customs (BOC) filed smuggling-related complaints against the owner of Medaglia De Oro Trading and nine Licensed Customs Brokers for importing rice without the required import permit from the National Food Authority (NFA). The move is part of the agency’s drive to thwart the illegal entry of imported rice into the country.

Four separate complaints were filed by BOC Acting District Collectors Mario Mendoza of the Port of Manila; Roberto Almadin of the Port of Cebu; Ricardo Butalid, Jr. of the Port of Davao; and Datu Samson Pacasum of the Mindanao Container Terminal in Misamis Oriental against Emmanuel Santos, owner and proprietor of Medaglia De Oro, along with the firm’s customs brokers: Denise Kathryn Rosaroso, Raquel Sildora Cabasag, Emilio Chio, Myrene Noynay Sollano, Gemma Garcia, Melvin Isagan, John Kevin Cisneros, Eduardo Borje III, and Kenneth Quial. A fifth case against Medaglia De Oro will be filed by BOC Acting District Collector Elmir Dela Cruz of the Manila International Container Port On Friday(November 14) against Santos and customs brokers Rosemarie Sangalang Arciaga And Baltazar Ramirez.  The charges stem from rice importations of Medaglia De Oro totaling over 16.039 Metric Tons (more than 16.039-Million kilograms) from Thailand and Singapore in July and August 2013 through Manila, Cebu, Davao and Misamis Oriental. The firm’s rice imports have a total dutiable value of more than P205-Million and an estimated market value of over P641-Million.

The 12 face multiple counts of violating Section 3601 of the Tariff and Customs Code of the Philippines (TCCP) and Section 29 of Presidential Decree (PD) Number 4, as amended by P.D. No. 1485. Each count of violating Section 3601 of the TCCP carries a maximum punishment of ten years imprisonment and a fine of P50,000; while violation of P.D. No. 4 is levied a maximum penalty of four years imprisonment and a fine of P8,000.00 per count.

Medaglia De Oro earlier told the NFA that private importers can import rice without securing a permit, citing the expiration of quantitative restrictions on rice imports to the Philippines under the World Trade Organization in 2012. However, Philippine laws state that only the NFA can import rice, mandating public companies who wish to do the same to secure from the NFA the import permit. The NFA regulates rice imports through quotas, preventing excessive and unquantifiable amounts of rice, to ensure fair competition and viability of the local rice industry.

Based on records of the NFA, Medaglia De Oro neither applied nor was granted any import permit or allocated import quota.

“Rice is a regulated commodity not only because it is our staple food but also a source of livelihood for 2.4-Million farming households. Any sudden surges in imported rice would have catastrophic consequences on millions of farmers and our agriculture industry. It is for these reasons why the Philippine government has been requesting for special treatment of rice imports under the WTO for the past several years,” said Customs Commissioner John P. Sevilla.

In 2013, the Department of Agriculture reported 96% rice sufficiency of the country, equivalent to 18.44-Million metric tons.

 

SUMMARY OF THE CASES

 

IMPORTER Medaglia De Oro Trading
DATE AND PORT OF COMMISSION August 2013/ Port of Manila
RESPONDENTS
  • EMMANUEL SANTOS, owner/proprietor, with address at No. 331 Regina Building, Escolta Street, Barangay 291, Zone 027, Binondo, Manila
  • KENNETH QUIAL, Licensed Customs Broker, with address at Matab-Ang, Day As, Cordova, Cebu
VIOLATIONS 1.     Violation of Section 3601 in relation to Section 101 of TCCP

2.     Violation of NFA Memorandum Circular No. AO-2K13-03-003 dated 22 March 2013

3.     Violation of Section 29 of P.D. No. 4, as amended by P.D. No. 1485

GOODS Rice totaling 912,500 kg
DUTIABLE VALUE P14.7-Million
ESTIMATED MARKET VALUE P36.5-Million
PORTS OF ORIGIN Thailand

 

IMPORTER Medaglia De Oro Trading
DATE AND PORT OF COMMISSION July and August 2013 / Port of Cebu
RESPONDENTS
  • EMMANUEL SANTOS
  • DENISE KATHRYN ROSAROSO, Licensed Customs Broker, with address at Block 13, Lot 17, Springwoods Country Homes, Minglanilla, Cebu
  • RAQUEL SILDORA CABASAG, Licensed Customs Broker, with address at 183-A Salvador Ext., Labangon, Cebu City
  • EMILIO CHIO, Licensed Customs Broker, with address at Unit 301 CIFC Tower, Gov. Briones St, North Reclamation Area, Cebu City
  • MYRENE NOYNAY SOLLANO, Licensed Customs Broker, with address at Quijano Compound, Calamba V. Rama Avenue, Cebu City
  • GEMMA GARCIA, Licensed Customs Broker, with address at L. Flores Street, Mahayahay 1, Pasil, Cebu City
  • MELVIN ISAGAN, Licensed Customs Broker, with address at 2794 Sindulan Street, Mabolo, Cebu City
  • JOHN KEVIN CISNEROS, Licensed Customs Broker, with address at Logarta corner Manlili Street, Sto Nino, Cebu
VIOLATIONS 1.     Violation of Section 3601 in relation to Section 101 of the TCCP

2.     Violation of NFA Memorandum Circular No. AO-2K13-03-003 dated 22 March 2013

3.     Violation of Section 29 of P.D. No. 4, as amended by P.D. No. 1485

GOODS Rice totaling to 11.1-Million kg
DUTIABLE VALUE P147.2-Million
ESTIMATED MARKET VALUE P445.6-Million
PORTS OF ORIGIN Singapore and Thailand

 

IMPORTER Medaglia De Oro Trading
DATE AND PORT OF COMMISSION July and August 2013/ Mindanao Container Terminal
RESPONDENTS
  • EMMANUEL SANTOS, owner/proprietor, with address at No. 331 Regina Building, Escolta Street, Barangay 291, Zone 027, Binondo, Manila
  • GEMMA A. GARCI, Licensed Customs Broker, with address at L. Flores Street, Mahayahay 1, Pasil, Cebu City

 

  • RAQUEL SILDORA CABASAG, Licensed Customs Broker, Filipino, with address at 183-A Salvador Ext., Labangon, Cebu City
VIOLATIONS 1.     Violation of Section 3601 in relation to Section 101 of the TCCP

2.     Violation of NFA Memorandum Circular No. AO-2K13-03-003 dated 22 March 2013

3.     Violation of Section 29 of P.D. No. 4, as amended by P.D. No. 1485

GOODS Rice totaling 700,000 kg
DUTIABLE VALUE P9.3-Million
ESTIMATED MARKET VALUE P28-Million
PORTS OF ORIGIN Thailand

IMPORTER Medaglia De Oro Trading
DATE AND PORT OF COMMISSION July and August 2013/ Port of Davao
RESPONDENTS
  • EMMANUEL SANTOS, owner/proprietor, with address at No. 331 Regina Building, Escolta Street, Barangay 291, Zone 027, Binondo, Manila
  • EDUARDO ALABADO BORJE III, Licensed Customs Broker,  with address at 888 2ND Street, Mercedes Subdivision, Sasa, Davao City
VIOLATIONS 1.     Violation of Section 3601 in relation to Section 101 of the TCCP

2.     Violation of NFA Memorandum Circular No. AO-2K13-03-003 dated 22 March 2013

3.     Violation of Section 29 of P.D. No. 4, as amended by P.D. No. 1485

GOODS Rice totaling 2.9-Million kg
DUTIABLE VALUE P28.1-Million
ESTIMATED MARKET VALUE P116-Million
PORTS OF ORIGIN Thailand

TO BE FILED TOMORROW (FRIDAY, NOVEMBER 14, 2014)

IMPORTER Medaglia De Oro Trading
DATE AND PORT OF COMMISSION August 2013/ Manila International Container Port
RESPONDENTS
  • EMMANUEL SANTOS, owner/proprietor, with address at No. 331 Regina Building, Escolta Street, Barangay 291, Zone 027, Binondo, Manila
  • ROSEMARIE SANGALANG ARCIAGA, Licensed Customs Broker with address at 196 San Guillermo Street, Putatan, Muntinlupa
  • BALTAZAR RAMIREZ Licensed Customs Broker, with postal address at 1011 Midland Plaza Hotel, Ermita, Manila 1000
VIOLATIONS 1.     Violation of Section 3601 in relation to Section 101 of the TCCP

2.     Violation of NFA Memorandum Circular No. AO-2K13-03-003 dated 22 March 2013

3.     Violation of Section 29 of P.D. No. 4, as amended by P.D. No. 1485

GOODS Rice totaling 387,500 kg
DUTIABLE VALUE P5.9-Million
ESTIMATED MARKET VALUE P15.5-Million
PORTS OF ORIGIN Thailand

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