DOF asks Congress to extend tax relief for small businesses affected by COVID-19 crisis
Robie de Guzman • April 27, 2020 • 376
MANILA, Philippines – The Department of Finance (DOF) on Monday said it has asked Congress to approve a measure which will allow the government to absorb the losses of small businesses from economic fallout triggered by the novel coronavirus disease (COVID-19) crisis.
In a statement, Finance Secretary Carlos Dominguez III said the DOF has proposed to Congress the extend the net operating loss carryover (NOLCO) for small businesses to five years for losses incurred in 2020.
“This means that a small business’ losses this year may be deducted from their income for up to the next five years for tax purposes,” he said.
“The purpose of extending NOLCO is to give them more time to recoup their losses arising from implementation of the enhanced community quarantine (ECQ) and other measures to contain the spread of COVID-19,” he added.
Under the National Internal Revenue Code (NIRC), NOLCO applies to only three taxable years. The amendment to add two more years, would require congressional approval.
Dominguez said that based on DOF estimates, financial losses of small businesses will amount to P465.3 billion as a result of the ECQ and other containment measures that have forced them to temporarily close shop or to continue operating but with only a skeleton force.
Those operating in malls and other retail outlets are likely to incur losses of about P461 billion while those that have remained open but on skeleton force capacity will lose around P4.3 billion, the DOF said.
Based on the existing provisions of the NIRC, net operating losses, which had not been previously offset as a deduction, shall be carried over as a deduction from gross income for the next three taxable years immediately following the year of such loss.
If Congress agrees to the proposal to prolong NOLCO coverage, Dominguez said the government would be able to absorb up to P139.6 billion in forgone tax revenue from 2021 to 2025.
Dominguez said the proposal forms part of its program to help small businesses and their workers survive the economic repercussions of the COVID-19 pandemic.
He said the enhanced NOLCO for small enterprises to cover losses in 2020 is similar to the tax relief measures being adopted in the United States and China to provide relief to their respective business sectors.
MANILA, Philippines – The Duterte government’s economic development and infrastructure Cabinet clusters are set to present the administration’s plans for recovery and resilience in the face of the coronavirus-induced headwinds this year at the first pre-State of the Nation Address (SONA) forum to be held this week.
The Department of Finance (DOF) said that the forum titled, “Regaining Momentum, Accelerating Recovery in a Post COVID-19 World,” will be held virtually on July 8.
Hosted by the Presidential Communications Operations Office and Office of the Cabinet Secretary, the forum will be streamed live on the Facebook pages of the Radio Television Malacañang, and other government agencies.
Finance Assistant Secretary Antonio Lambino II said this year’s pre-SONA forum will be different as the audience will be “purely virtual,” due to limitations on mass gathering amid the coronavirus pandemic.
“We do hope that our citizens will be able to tune in as the country’s top decision makers discuss our path to a quick and strong recovery from this crisis,” he said.
In the forum, the DOF said that top economic and infrastructure officials are also expected to report on the state of the Philippine economy, as well as the government’s ongoing efforts to leverage on its strong fundamentals in the fight against the coronavirus disease 2019 (COVID-19).
Finance Secretary Carlos Dominguez III and Public Works and Highways Secretary Mark Villar will present performance updates and priority plans, respectively, on the economic and infrastructure fronts.
Acting Socioeconomic Planning Secretary Karl Kendrick Chua will speak on the Philippine Economic Recovery Program.
“The audience can expect Secretary Dominguez to delve deeper into the challenges we’re facing right now, the accomplishments in the previous year that we can build on, and the legislative proposals that the economic team submitted for Congress to consider,” Lambino said.
Meanwhile, updates on the monetary, external, and financial sectors will be discussed by Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno.
Pre-SONA forums are held annually to discuss in greater detail the achievements of the government in the previous year and the priorities of the Cabinet cluster heads in the run-up to the President’s SONA on July 27.
MANILA, Philippines – The Bureau of Customs (BOC) has confiscated P244-million worth of smuggled, unregistered or counterfeit personal protective equipment (PPE) and other medical supplies from March 25 to May 31, 2020, the Department of Finance (DOF) said on Friday.
In a statement, the DOF said the seizure is part of the BOC’s efforts to stop the illegal importation, storage and hoarding of goods deemed essential to the fight against the novel coronavirus disease (COVID-19) pandemic.
In a report to Finance Secretary Carlos Dominguez III, the BOC said that while it has released various regulations to facilitate and speed up the process of importing PPEs and other medical supplies, some unscrupulous traders have taken advantage of the coronavirus-induced crisis to smuggle such items into the country.
In his report, Customs Commissioner Rey Leonardo Guerrero said he has issued 10 Letters of Authority covering the inspection of persons and premises suspected of selling or storing smuggled and/or unregistered medicines and equipment from March 25 to May 31 this year.
“Moreover, profiling/targeting of imported shipments suspected to contain contraband and other smuggled articles were intensified. As a result a total of P244.4 million-worth of smuggled/counterfeit/unregistered PPE and medicines were seized by the Bureau,” Guerrero added.
Last May 1, various PPEs, and P70-million worth of Chinese medicines that supposedly cure COVID-19 were seized by the BOC in a warehouse in Singalong, Manila.
Guerrero said in his report that the medicines, which were contained in about 360 boxes, were not registered with the Food and Drug Administration (FDA).
The BOC chief also said that they have seized other medical supplies in various operations including the following:
P5 million worth of masks, gloves, goggles, alcohol, thermal scanners, test tubes and syringes under the name of Philmed Dynasty Supplies Corp. based in Binondo, Manila;
An estimated P30 million-worth of various PPEs, such as gloves, masks, and googles under the name of ELJ1 Medical Shop based in Sta. Cruz, Manila; and
An estimated P9 million-worth of various PPEs, such as gloves, masks, goggles from the Medical Outlet based in Rizal Avenue, Manila.
An estimated P80 million-worth of various PPEs, such as gloves, masks, goggles, medicines, and foodstuffs from an establishment located at HK Sun Plaza, Macapagal Blvd., Pasay City.
An estimated P400,000-worth of various medical supplies and medicines from Ton Ren Tang Chinese Medication, Binondo, Manila.
An estimated P50 million-worth of various medical equipment and supplies from Omnibus Biomedical Systems.
“The cases involving these smuggled or unregistered products are now the subject of forfeiture proceedings by the BOC before the law division of the Manila International Container Port (MICP),” Guerrero said.
Aside from these items, the BOC also reported that it seized 2.2 kilograms of imported Chinese medicines without FDA clearance last April 27, and has initiated the filing of appropriate charges against their importers and consignees.
Another five boxes of Chinese medicines containing 48,000 medicinal tablets and bundled with 238 master cases of assorted imported cigarettes; 4 drums of toluene-2.4 diisocyanate; 2 drums of propylene glycol; 2 drums of glycerol-propoxylate-block-ethoxylate; 2 drums of vacuum pump oil; 2 drums of paraffin oil; 2 drums of power steering fluid; 1 drum of sodium hypochlorite; and 2 drums of siloxane were confiscated from a warehouse in Valenzuela City last April 30.
Guerrero said these were seized and taken into custody by the BOC for failure of the owner to present the required import documents for these items.
MANILA, Philippines – The Department of Finance (DOF) announced on Sunday that it has extended anew the deadlines for the filing of claims for value-added tax (VAT) refund.
In a statement on Sunday, the DOF said it has issued Revenue Regulations (RR) No. 16-2020, dated June 24, extending the deadline due to “preconceived difficulty for taxpayer-claimants to file VAT refund claims” as mobility remains restricted in some areas in the country amid the enforcement of quarantine measures against novel coronavirus disease (COVID-19).
The extended deadlines for filing of VAT refund claims are as follows:
Calendar quarter ending March 31, 2018 – July 15, 2020
Fiscal quarter ending April 30, 2018 – July 31, 2020
Fiscal quarter ending May 31, 2018 – August 15, 2020
Calendar quarter ending June 30, 2018 – August 31, 2020
However, the finance department clarified that these extended deadlines will not apply to areas that are not yet under general community quarantine (GCQ).
For taxpayer-claimants in areas that have yet to transition to GCQ, the DOF said that the deadline shall be 30 days from the lifting of the enhanced community quarantine (ECQ) or modified enhanced community quarantine (MECQ) in the affected areas, or the above stated deadlines, whichever comes later.
In areas under ECQ or MECQ, the implementation of the 90-day period for processing VAT refund claims is suspended, the DOF said.
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