Subject: WEEKLY TAX UPDATES [JULY 17] Govt says more pay increases coming

WEEKLY TAX UPDATES

JULY 17

  1. TAX & BUSINESS-RELATED NEWS [JULY 10-16]

  2. DOJ OPINION ON THE POWER OF THE PRESIDENT TO GRANT INCENTIVES UNDER CREATE MORE

  3. PEZA ON CERTIFICATE AUTHORIZING IMPORTATION

  4. BIR ON BOOKS OF ACCOUNTS OF NEW REGISTRANTS

  5. CTA CASES

1. TAX & BUSINESS-RELATED NEWS [JULY 10-16]

1. ED Council approves North-South Commuter Railway O&M project

2. Marina aims for global shipbuilding

3. MPTC eyes September start for Vietnam expressway expansion

4. New BOC chief bans personnel from engaging in customs brokerage ops

5. Cebu City Legal Office blows whistle on massive tax assessment fraud

6. Palace studying legal actions vs BSP 'ghost employees'

7. Digital platform aims to solve Metro Manila leasing woes

8. SBMA remits P1.47-billion dividend to Treasury

9. Banks slap uniform 20% tax on interest income

10. Mandaue reclamation project: SC affirms validity of joint venture deal

11. PH among nominees for 'most desirable country' in travel awards

12. Southstar Drug targets 800 stores by 2026

13. Projects with tax perks under CREATE hit P1.5 trillion

14. CLI picks 3.5-ha space in Pasig City for Luzon debut

15. BIR, LANDBANK offer easier foreign DSP VAT payments

16. Tesda told: Focus on higher nat’l certificates, devolve tech-voc schools

17. Iloilo City struggles to keep biz afloat in heritage zone

18. Aragones goes after delinquent taxpayers

19. Govt says more pay increases coming

20. Lacson wants to strip bank secrecy law from gov’t employees

21. Marcos Jr. vetoes bill declaring PUP as National Polytechnic University

22. US firm launches its 1st virtual nursing hub in the Philippines

23. Leasing surge in 1st half may push full-year demand past 2024 levels, says Leechiu

24. Is the Philippines Really More Expensive for Travelers Than Our SEA Neighbors?

DISCLAIMER!

We saw these tax and business-related news on various news sites, and we thought you should see them. DMD is not responsible for the content of these news, and anything written thereon does not necessarily reflect DMD views or opinions.

ED Council approves North-South Commuter Railway O&M project [Inquirer.Net, July 16, 2025]

The Economy and Development (ED) Council, chaired by President Ferdinand Marcos Jr., approved the North-South Commuter Railway (NSCR) Operations and Maintenance (O&M) Project during the second ED Council meeting on Tuesday.

 

Marina aims for global shipbuilding [The Manila Times, July 16, 2025]

THE Maritime Industry Authority (Marina) is pushing for the passage of two bills aimed at modernizing the shipbuilding and ship repair (SBSR) sector and improving the country’s ship registry, in line with global green and technological shifts.

 

MPTC eyes September start for Vietnam expressway expansion [BusinessWorld, July 16, 2025]

METRO PACIFIC Tollways Corp. (MPTC), through CII Bridges and Roads Investments Joint Stock Co. (CII), is targeting to begin the expansion of the nearly $1.6-billion Ho Chi Minh City – Trung Luong – My Thuan Expressway by September, a company official said.

 

New BOC chief bans personnel from engaging in customs brokerage ops [GMA News Online, July 15, 2025]

Under the memorandum, Nepomuceno categorically banned all BOC officials, employees, and personnel from being involved, directly or indirectly, in customs brokerage businesses. This includes roles as owner, incorporator, stockholder, partner, consultant, advisor, or in any other capacity that may raise ethical concerns.

 

Cebu City Legal Office blows whistle on massive tax assessment fraud [Cebu Daily News, July 15, 2025]

In a May 21 report endorsed to former Mayor Raymond Alvin Garcia and the City Council, the legal office called on city officials to confront what it described as a “systemic fraud harming taxpayers,” tied to unauthorized overrides in the city’s computerized Real Property Tax System (AS400).

 

Palace studying legal actions vs BSP 'ghost employees' [GMA News Online, July 15, 2025]

The Office of the General Counsel had launched an investigation into the incident last October 3, 2023 following reports that several staff in the offices of two Monetary Board members have not been reporting to work but are still receiving salaries. 

 

Digital platform aims to solve Metro Manila leasing woes [BusinessWorld, July 15, 2025]

DORMY PH, a local property technology startup, is expanding its digital rental platform to support the entire leasing process as it seeks to simplify renting for both tenants and property owners in Metro Manila.

 

SBMA remits P1.47-billion dividend to Treasury [BusinessWorld, July 15, 2025]

Under Republic Act No. 7656 or the Dividends law, government-owned or -controlled corporations (GOCCs) must declare and remit at least 50% of their annual net earnings as cash, stock or property dividends to the Treasury.

 

Banks slap uniform 20% tax on interest income [The Philippine Star, July 14, 2025]

The banks clarified, however, that existing placements made before July 1 will continue to be taxed at the rates applicable at the time of investment, until maturity.

 

Mandaue reclamation project: SC affirms validity of joint venture deal [Cebu Daily News, July 14, 2025]

The Supreme Court has affirmed the validity of the joint venture agreement (JVA) between GlobalCity Mandaue Corporation (GMC) and Mandaue City Government for the implementation of the largest reclamation project in Cebu.

 

PH among nominees for 'most desirable country' in travel awards [ABS-CBN News, July 14, 2025]

The Philippines is nominated in the 24th edition of the Wanderlust Reader Travel Awards, and is among the contenders for "most desirable country" worldwide.

 

Southstar Drug targets 800 stores by 2026 [BusinessWorld, July 14, 2025]

This year also marks the drugstore’s 88th year since being founded in the Bicol Region in 1937.

 

Projects with tax perks under CREATE hit P1.5 trillion [The Philippine Star, July 14, 2025]

Bulk or nearly 70 percent of the investment capital worth P1.03 trillion was approved by the FIRB.

 

CLI picks 3.5-ha space in Pasig City for Luzon debut [The Philippine Daily Inquirer, July 14, 2025]

CEBU CITY—Cebu Landmasters Inc. (CLI) will make its Luzon debut on a 3.5-hectare (ha) land in Pasig City. The company insists that the residential oversupply in the capital region would “settle” soon enough.

 

BIR, LANDBANK offer easier foreign DSP VAT payments [BusinessWorld, July 13, 2025]

THE Bureau of Internal Revenue (BIR) and the Land Bank of the Philippines (LANDBANK) said they signed an agreement to streamline the payment of value-added tax (VAT) by foreign digital service providers (DSPs).

 

Tesda told: Focus on higher nat’l certificates, devolve tech-voc schools [Inquirer.Net, July 12, 2025]

In the report, Edcom 2 Executive Director Karol Yee questioned the quality of Tesda’s so-called diploma programs. Tesda lists over 700 diploma programs nationwide, but Yee said in the report that many of them lack uniform standards and quality assurance.

 

Iloilo City struggles to keep biz afloat in heritage zone [Philippine Daily Inquirer, July 12, 2025]

The local government here is embarking on a bold effort to breathe new life into the city’s old downtown area, particularly along historic Calle Real that hosts American colonial-era structures.

 

Aragones goes after delinquent taxpayers [The Manila Times, July 12, 2025]

The governor clarified that she is not asking for anything in return from these business people except to help improve the welfare of the people and the province by paying the right taxes.


Govt says more pay increases coming [The Manila Times, July 11, 2025]

Labor Secretary Bienvenido Laguesma said on Thursday that at least five Regional Wages and Productive Boards have started the determination process for the next round of wage hikes in their respective areas.

 

Lacson wants to strip bank secrecy law from gov’t employees [Philippine News Agency, July 11, 2025]

Senator Panfilo Lacson has filed two separate measures seeking to remove the bank secrecy law and foreign currency deposits from government officials and employees.

 

Marcos Jr. vetoes bill declaring PUP as National Polytechnic University [ABS-CBN News, July 11, 2025]

President Ferdinand Marcos Jr. has vetoed the bill seeking to convert the Polytechnic University of the Philippines to the National Polytechnic University, Malacañang said Friday.

 

US firm launches its 1st virtual nursing hub in the Philippines [The Philippine Star, July 11, 2025]

Worldwide Resource Solutions (WWRS), a subsidiary of US-based Medical Solutions and Worldwide HealthStaff Solutions Ltd., inaugurated its new operational site at the GBF Center in Bridgetowne, Quezon City.


Leasing surge in 1st half may push full-year demand past 2024 levels, says Leechiu [BusinessWorld, July 11, 2025]

OFFICE LEASING activity in Metro Manila surged in the first half of 2025, reaching levels not seen since 2017, as demand from the information technology-business process management (IT-BPM) sector drove a stronger-than-expected recovery, according to Leechiu Property Consultants (LPC).


Is the Philippines Really More Expensive for Travelers Than Our SEA Neighbors? [Esquire, July 10, 2025]

For many local travel sellers, lawmakers and even the public, the Philippines is losing its status as a preferred travel destination partly because of soaring hotel rates and high airfare costs. More Filipinos are even choosing to travel abroad because they say all-in travel packages cost less than traveling in the Philippines. The numbers bear out this observation: in 2024, seven million Filipinos traveled abroad, exceeding the 5.95-million foreign tourists who visited the Philippines that year.

2. DOJ OPINION

[THE PRESIDENT HAS THE AUTHORITY TO GRANT BOTH FISCAL & NON-FISCAL SUPPORT FOR HIGHLY DESIRABLE PROJECTS THROUGH THE GENERAL APPROPRIATIONS ACT, IN ADDITION TO THE INCENTIVES UNDER CREATE MORE, BUT MUST BE GUIDED BY THE FIRB’S DETERMINATION OF HIGHLY DESIRABLE PROJECTS, INCENTIVE LIMITS & PERFORMANCE TARGETS]

Secretary Recto, the Chairman of the Fiscal Incentives Review Board (FIRB), is requesting a legal opinion concerning the interpretation and propriety of the President’s authority to grant budgetary support to private entities with highly desirable projects under Section 301 of the 1997 Tax Code, as amended. As represented, the FIRB's initial letter stated that a private entity applied for PEZA registration and tax incentives for a project exceeding Php 50 Billion in investment. The applicant also sought non-fiscal support, including power cost reductions, water diversification, and substation construction. Due to the project's novel nature, the FIRB endorsed it for presidential approval of incentives, pending the Department of Justice (DOJ) legal opinion. In reply, the DOJ concurs that Section 31 of the Tax Code explicitly authorizes the President to grant incentives to highly desirable projects without a prior FIRB recommendation. However, the President’s decision must be guided by the determination of the FIRB as to what projects are considered highly desirable, the maximum incentive levels, and the performance targets to be imposed on the grantee. In addition, the DOJ agrees that the President may grant non-fiscal support limited to government resource use, such as land. The President may also authorize budgetary support under the annual General Appropriations Act (GAA), as supported by Rule 11, Section 5 of the CREATE MORE Implementing Rules and Regulations (IRR). Moreover, the DOJ concurs that Power Sector Assets and Liabilities Management (PSALM) Corporation is not a retail electricity supplier (RES) and is therefore prohibited from conducting retail electricity supply transactions with contestable customers, pursuant to Section 50 of the Electric Power Industry Reform Act of 2001 (EPIRA). Regarding the application of the equal protection clause, the DOJ stated that incentives under the Tax Code are neither universally nor automatically granted to all enterprises, even if they operate within the same industry. Such grants must align with the government’s fiscal position, national economic development priorities, and be subject to fund availability and inclusion in the annual GAA, as mandated by Section 29(1), Article VI of the 1987 Constitution. [DEPARTMENT OF JUSTICE LEGAL OPINION NO. 16, SERIES OF 2025, JULY 8, 2025]

3. PEZA EXTENDS THE MANDATORY IMPLEMENTATION OF THE ELECTRONIC CERTIFICATE OF AUTHORITY TO IMPORT

Philippine Economic Zone Authority (PEZA) Memorandum Order No. 2025-008, issued on June 30, 2025, extends the mandatory implementation of the Electronic Certificate of Authority to Import (e-CAI) for registered business enterprises until August 1, 2025. This order allows companies to apply for their 2025 e-CAI for free, until July 31, 2025, through the PEZA The One Portal System (PTOPS), with no documentary requirements and a 24-hour approval process. After the free application period ends, fees will be imposed of Php 500 for the primary e-CAI and Php 150 for supplemental e-CAIs.

 

It may be recalled that under the IRR of CREATE MORE, a Certificate of Authority to Import (CAI) refers to the document issued by the concerned Investment Promotion Agency (IPA) as proof of entitlement to the Value-Added Tax (VAT) and/or duty exemption on importation which shall contain a list of capital equipment, raw materials, spare parts, or accessories to be imported that are directly attributable to the production of goods and performance of services, including goods used for administrative purposes. 

4. BIR CLARIFIES THE REGISTRATION OF THE BOOK OF ACCOUNTS FOR NEW BUSINESS REGISTRANTS

Revenue Memorandum Circular (RMC) No. 65‑2025, issued on July 2, 2025, clarifies that new business taxpayers, whether obtaining a new Tax Identification Number (TIN) or already holding one, may register Manual, Loose‑leaf (LLBA), or Computerized (CBA) Books of Accounts.

For new business registrants, taxpayers who opt to use LLBA or CBA are not required to register Manual Books but must first secure a Permit to Use (PTU) for LLBA or an Acknowledgement Certificate (AC) for CBA or Computerized Accounting System (CAS) before use. LLBA/CBA/CAS registration can only be processed after TIN issuance. Once both the TIN and permits are granted, the BIR Registration Officer will update the taxpayer’s record to reflect the LLBA/CBA/CAS registration. Per RMC No. 3‑2023, registering Manual, LLBA/CBA/CAS Books is not required upon business registration. However, LLBA/CBA/CAS users without an approved PTU or AC shall be liable for failure to make entries or recordings upon commencement of business operations.

5. CTA CASES

MERE OWNERSHIP BY A SINGLE STOCKHOLDER OF ALL OR MAJORITY OF THE CORPORATION’S CAPITAL STOCK DOES NOT, BY ITSELF, JUSTIFY DISREGARDING THE CORPORATION’S SEPARATE LEGAL PERSONALITY

The Petitioner, Enrico John Olivares Santos, filed a Petition for Review seeking to cancel the assessments issued by the Respondent, Commissioner of Internal Revenue (CIR). The Petitioner argues that the Letter of Authority (LOA) was improperly served upon Erika Jane Suguitan, an employee of VJ-7 Printing and Packaging Inc., a corporation separate and distinct from him as the sole proprietor of VJ7 Printing. Consequently, it violates his constitutional right to due process. He further asserts that he and VJ-7 Printing and Packaging Inc. are separate and distinct from one another, and the corporation’s liability may not be imputed on him. On the other hand, the Respondent counters that the LOA and the subsequent assessment notices were properly served on and received by the Petitioner. Furthermore, even if VJ-7 Printing had corporate status, such personality should be disregarded because its incorporation was designed as a fraudulent scheme to evade payment of tax liabilities. In ruling, the Court held that the LOA was improperly served. It found that VJ7 Printing Corp is an entity separate and distinct from the Petitioner, and thus, service of LOA on its employee, Suguitan, does not equate to service to the Petitioner. Such improper service of the LOA constituted a violation of the Petitioner’s right to due process. In addition, the Court emphasized that mere ownership by a single stockholder of all or nearly all of the capital stock of a corporation is not of itself sufficient ground to disregard the corporation’s separate personality. Piercing the corporate veil is allowed, provided fraud was employed to evade payment of taxes. However, there must be clear and convincing proof that the separate personality of the corporation was purposely employed to commit fraud. Failure to provide evidence will not justify piercing the corporate veil. The Court also found that the tax assessments lack factual bases. It noted that the use of Third-Party Information (TPI), without providing the corresponding registry return cards, as required under Revenue Memorandum Order (RMO) No. 13-2012, would consider the TPI as unverified information, which cannot be a valid support for an assessment. Thus, because of the invalid service of the LOA and lack of factual bases, the assessments are declared invalid. Consequently, the Petition is GRANTED. [ENRICO JOHN OLIVARES SANTOS VS. COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10704, JULY 3, 2025]


AN ORDINANCE IS SUBORDINATE TO A STATUTE & MUST GIVE WAY IN CASE OF A CONFLICT

The Petitioners, Quezon City Government and Hon. Edgar Villanueva, filed a Petition for Review assailing the Orders of the Regional Trial Court (RTC) of Quezon City-Branch 222, and seeking to uphold the validity of the First and Second Notices of Assessment issued against the Respondent Aeon Fantasy Group Philippines Inc. The Petitioners argued that the RTC erred in ruling that Kidzoona is not an amusement place and therefore not liable for Amusement Tax, contrary to the provisions of the QC Revenue Code. They also contended that the RTC lacked jurisdiction over the Petition for Review filed before it, having been filed beyond the prescriptive period. On the other hand, the Respondent maintained that Kidzoona stores do not fall under the category of “amusement places” subject to the imposition of Amusement Tax as defined by the Local Government Code (LGC), and that the RTC has jurisdiction over the Petition. In ruling, the Court held that the Petition for Review was filed within the prescriptive period under Section 195 of the LGC. However, it emphasized that Section 195 of the LGC applies only when a valid Notice of Assessment is issued. In this case, the assessment notices were neither signed by the City Treasurer nor provided any basis for computation. The reply issued by the City Treasurer failed to provide the amount to be paid, and the assessments failed to provide the basis for the amounts. As such, the Notice, Reply, and Letter are considered void and cannot serve as a basis for a valid assessment. Furthermore, the Court clarified that Kidzoona stores do not belong to the same category or class as the amusement places as contemplated under Section 131(c) of the LGC. It also found that the QC Revenue Code unduly expanded the statutory definition of amusement places, contrary to the definition under the LGC. It was then held that in case of conflict between an ordinance and a statute, the ordinance must be set aside for being inferior to the laws of the State. Thus, the Petition was DENIED. [QUEZON CITY GOVERNMENT & HON. EDGAR T. VILLANUEVA, IN HIS CAPACITY AS THE CITY TREASURER VS. AEON FANTASY GROUP PHILIPPINES INC., CTA AC NO. 317, JUNE 27, 2025]


THE PARTY CLAIMING THAT THE DECISION HAS BEEN EXECUTED BEARS THE BURDEN OF PROVING THE FACT OF ITS EXECUTION

The Petitioner, Toledo Power Company, filed a Petition seeking the revival and enforcement of the judgment rendered by the Court of Tax Appeals (CTA) First (1st) Division, which ordered the Respondent, Commissioner of Internal Revenue (CIR), to refund or issue a Tax Credit Certificate (TCC) for the unutilized input Value-Added Tax (VAT) on zero-rated sales for the taxable year 2004 in favor of the Petitioner. The Petitioner argued that all legal requirements for the revival of the judgment had been satisfied, and the Petition was filed within the prescribed period. On the other hand, the Respondent asserted that the Petitioner failed to establish that the Decision had not yet been executed. In ruling, the Court, citing the provisions under the Civil Code, emphasized that an independent action to enforce a judgment must be filed within ten (10) years from the date the judgment becomes final and executory. Thus, the Petition for the Revival and Enforcement of the Judgment was deemed timely filed. In addition, the Court held that the Respondent failed to prove the execution of the CTA Decision. It reiterated that the burden of proof rests upon the party who alleges a fact, not upon the party who denies it. Therefore, it is the Respondent who should assert that the execution took place. Additionally, the Petitioner presented evidence of non-execution, which the Respondent failed to refute. Such failure rendered the Respondent’s contention unsubstantiated and devoid of merit. Consequently, the Petition is GRANTED, and the CTA Decision ordering the Respondent to refund or issue a TCC is REVIVED. [TOLEDO POWER COMPANY VS COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 11272, JUNE 17, 2025]


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