Subject: WEEKLY TAX UPDATES [OCT 22] Philippine firms expect 5.2% pay hike in 2026 as 1 in 5 workers plan to quit

WEEKLY TAX UPDATES

OCTOBER 22

  1. TAX & BUSINESS-RELATED NEWS [OCTOBER 15-21]

  2. BIR EXTENDS THE DEADLINE FOR COVERED TAXPAYERS TO COMPLY WITH THE REQUIREMENT OF ISSUING ELECTRONIC INVOICES

  3. PEZA FURTHER CLARIFIES THE VAT ZERO-RATING FOR GOODS & SERVICES CONSIDERED AS DIRECTLY ATTRIBUTABLE TO THE REGISTERED ACTIVITIES UNDER THE CREATE MORE ACT

  4. CTA CASES

1. TAX & BUSINESS-RELATED NEWS [OCTOBER 15-21]

1. 3 Sunwest projects at LTO found ‘underutilized’ despite being completed

2. Baguio may waive fees for 14 John Hay villages to end double taxation

3. House resolution seeks US talks to discuss call center reshoring

4. Sen. Tulfo files bill to abolish travel tax in the Philippines

5. Work starts on NSCR’s underground FTI station

6. Meralco targets 1,500-km underground lines under capex plan

7. FEU trims first-quarter loss to P90M

8. No rival bids for San Miguel’s proposed Boracay bridge, says DPWH

9. TaskUs says workforce still main source of PHL edge in IT-BPM

10. PEZA wooing aviation, aerospace investors

11. GSIS execs seek chief’s ouster over P8.8-B loss; pension fund cites record growth

12. DEPDev bucks proposal to cut VAT rate

13. 4 Filipino inventions to watch out for in the global market

14. Five firms express interest in North-South rail contract

15. EEI acquires Island Cove operator for P2.8 billion

16. Philippine firms expect 5.2% pay hike in 2026 as 1 in 5 workers plan to quit

17. Gov't to create group to address tax, non-tax concerns

18. PhilHealth counting on ‘substantial’ receivables from PCSO, PAGCOR

19. Philippines among world’s ‘most stressful’ countries for learner drivers — report

20. Baguio now wealthiest city outside Metro Manila — PSA

21. Central Luzon garment factory faces closure amid US tariffs, rising wages

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.

3 Sunwest projects at LTO found ‘underutilized’ despite being completed [Inquirer.Net, October 21, 2025]

In a press conference, Lacanilao said the projects included two buildings and a central command center.

 

Baguio may waive fees for 14 John Hay villages to end double taxation [Philippine Daily Inquirer, October 21, 2025]

The city council here is considering a proposal to waive the fees collected from residents and businesses in 14 barangays located within the Camp John Hay reservation to prevent double taxation, according to a draft ordinance pending before the legislative body.

 

House resolution seeks US talks to discuss call center reshoring [BusinessWorld, October 20, 2025]

“The urgency of the situation demands proactive and high-level diplomatic action and trade engagement to ensure that the interests of Filipino workers and US-affiliated firms operating in the Philippines are protected from the US bill’s unintended economic consequences,” he said, referring to US legislation known as the proposed Keep Call Centers in America Act.


Sen. Tulfo files bill to abolish travel tax in the Philippines [The Manila Times, October 20, 2025]

Currently, the government collects full travel tax of P2,700 (for first class passage) and P1,620 (for economy class passage); standard reduced travel tax of P1,350 (for first class passage) and P810 (for economy class passage); and privileged reduced travel tax for a dependent of an overseas Filipino worker — P400 (for first class passage) and P300 (for economy class passage).

 

Work starts on NSCR’s underground FTI station [BusinessWorld, October 20, 2025]

According to First Balfour, Inc., the engineering and construction arm of First Philippine Holdings Corp. (FPH), work started on the Food Terminal, Inc. (FTI) train station’s reinforced concrete diaphragm wall, which will ensure the foundational stability of the station.

 

Meralco targets 1,500-km underground lines under capex plan [BusinessWorld, October 20, 2025]

Underground lines are less prone to outages, although repairs can take longer when faults occur, he added.

 

FEU trims first-quarter loss to P90M [The Manila Times, October 20, 2025]

FAR Eastern University, Inc. (FEU) and its subsidiaries reported a narrower net loss of P90 million in the first quarter ended August, down 8 percent from the P97.5 million loss booked a year ago, thanks to higher student enrollment and the earlier start of basic education classes boosted revenues.

 

No rival bids for San Miguel’s proposed Boracay bridge, says DPWH [BusinessWorld, October 20, 2025]

SMHC was granted original proponent status for the unsolicited project, which involves the financing, design, construction, operation, and maintenance of a 2.54-kilometer bridge system — including a 1.14-kilometer limited-access bridge — that will connect Caticlan in Malay, Aklan to Boracay Island.

 

TaskUs says workforce still main source of PHL edge in IT-BPM [BusinessWorld, October 19, 2025]

The Philippines remains the company’s largest operating base, accounting for more than 35,000 teammates.

 

PEZA wooing aviation, aerospace investors [The Philippine Star, October 19, 2025]

PEZA currently hosts 16 registered aviation and aerospace projects of multinational corporations and Filipino enterprises.

 

GSIS execs seek chief’s ouster over P8.8-B loss; pension fund cites record growth [The Philippine Star, October 18, 2025]

The group alleged that under Veloso’s management, the GSIS pursued speculative placements that had already suffered substantial losses. These include multi-billion investments in Monde Nissin Corp., Nickel Asia Corp., Bloomberry Resorts Corp., Digiplus Interactive Corp. and Alternergy Holdings Corp.

 

DEPDev bucks proposal to cut VAT rate [GMA News Online, October 17, 2025]

Department of Economy, Planning and Development (DEPDev) Secretary Arsenio Balisacan, the Marcos administration’s chief economic planner, bucked proposals to slash the country’s value-added tax (VAT).

 

4 Filipino inventions to watch out for in the global market [GMA News Online, October 17, 2025]

DOST’s Project Promoting Advanced DOST Technologies Across Global Horizons Through Amplified PR Strategies for International Exhibitions (PAGDAHAN) aims to showcase the global visibility efforts of DOST-developed and supported projects throughout the year.

 

Five firms express interest in North-South rail contract [BusinessWorld, October 17, 2025]

The 147-kilometer NSCR will connect Malolos, Bulacan with Clark International Airport, and Tutuban, Manila with Calamba, Laguna. The P873-billion project is co-financed by the Japan International Cooperation Agency and the ADB. It will have 35 stations and three depots.

 

EEI acquires Island Cove operator for P2.8 billion [Rappler, October 16, 2025]

Construction company EEI Corporation acquired the firm which owns the defunct Philippine offshore gaming operator (POGO) hub Island Cove in Kawit, Cavite.

 

Philippine firms expect 5.2% pay hike in 2026 as 1 in 5 workers plan to quit [The Philippine Star, October 15, 2025]

Sectors most affected include information technology, sales, engineering, and cybersecurity, where global demand for digital talent continues to pull Filipino workers toward better-paying opportunities abroad and in multinational firms.

 

Gov't to create group to address tax, non-tax concerns [Philippine News Agency, October 15, 2025]

The DOF said among the key issues raised was the implementation of Revenue Memorandum Circular (RMC) No. 5-2024, which clarifies the taxation of cross-border services involving non-resident foreign corporations.

 

PhilHealth counting on ‘substantial’ receivables from PCSO, PAGCOR [BusinessWorld, October 15, 2025]

“This extra funding from PAGCOR (and) the PCSO is meant to expand the benefit coverage of which the primary care is definitely going to be part of. So that is what we are waiting for,” he said during a roundtable.


Philippines among world’s ‘most stressful’ countries for learner drivers — report [interaksyon, October 15, 2025]

Last October 3, Zutobi released a report ranking countries where student drivers would have the “toughest” time learning, based on the following factors: congestion, road traffic deaths, registered vehicles and road quality score.

 

Baguio now wealthiest city outside Metro Manila — PSA [Philippine Daily Inquirer, October 15, 2025]

Overall, Baguio ranks 10th among highly urbanized cities in the Philippines despite a slowdown in its gross city domestic product (GDP), which dropped from 9 percent (P169.02 billion) in 2023 to 5.8 percent (P178.85 billion), said Aldrin Federico Bahit Jr., PSA chief statistician  for Cordillera.

 

Central Luzon garment factory faces closure amid US tariffs, rising wages [BusinessWorld, October 15, 2025]

At the Department of Trade and Industry’s budget hearing at the Senate on Monday, Senator Maria Imelda “Imee” R. Marcos revealed that a factory producing high-end garments and travel goods is set to close.

2. BIR EXTENDS THE DEADLINE FOR COVERED TAXPAYERS TO COMPLY WITH THE REQUIREMENT OF ISSUING ELECTRONIC INVOICES

Revenue Regulations (RR) No. 026-2025, issued on October 16, 2025, amends the transitory provisions of RR No. 11-2025 by extending the compliance period for electronic invoice issuance by covered taxpayers until December 31, 2026. The extension accounts for the operational adjustments, including system reconfiguration and transition to electronic invoicing.

 

It may be recalled that taxpayers covered under Section(A)(1) to (3) of RR No. 11-2025, issued on February 27, 2025, were given a period of one (1) year from the effectivity of the regulation to comply with the electronic invoicing requirements (i.e., March 14, 2026). Meanwhile, those covered under Sections 3(A)(5)(i) to 3(A)(5)(iv) and 3(B) of the same regulation shall be mandated to comply with the e-invoicing and Electronic Sales Reporting System requirements upon the establishment of a system capable of storing and processing the required data by the BIR.

3. PEZA FURTHER CLARIFIES THE VAT ZERO-RATING FOR GOODS & SERVICES CONSIDERED AS DIRECTLY ATTRIBUTABLE TO THE REGISTERED ACTIVITIES UNDER THE CREATE MORE ACT

PEZA Memorandum Circular No. 2025-052, issued on September 29, 2025, provides clarification on the application on VAT zero-rating for goods and services considered as directly attributable under the Republic Act No. 12066, also known as the CREATE MORE Act. It affirms that such tax incentives apply only to goods and services directly attributable to the registered project or activity of a registered export enterprise or high-value domestic market enterprise. Directly attributable includes essential and incidental services such as janitorial, security, financial, consultancy, marketing, promotion, and administrative operations like human resources, legal, and accounting. The determination of whether a purchase qualifies as directly attributable rests with the relevant Investment Promotion Agency (IPA), such as PEZA and other similar authorities.

 

The circular also enumerates specific goods and services that qualify for VAT exemption on importation or VAT zero-rating on local purchases, reinforcing the principle that these must be reasonably necessary and incidental to the registered activity.

 

Furthermore, it clarifies that if a Registered Business Enterprise (RBE) believes that certain local purchases not explicitly listed are directly attributable or incidental and necessary to its registered activity, it may request confirmation from PEZA subject to the post audit of the BIR. The circular outlines the required documents for such a request, including a formal letter on official company letterhead with justification and supporting documents, and a notarized Sworn Affidavit using the prescribed template.

4. CTA CASES

FOR A PROTEST TO BE VALID, IT MUST BE FILED WITH THE PROPER OFFICE

The Petitioner, Alphaland Place, Inc., filed a Petitioner for Review seeking the cancellation of the assessment issued by the Respondent, Commissioner of Internal Revenue (CIR) and the invalidation of the Warrant of Distraint and/or Levy (WDL) and Warrants of Garnishment (WOGs). The Petitioner argued that the items of the assessment stated in the Formal Letter of Demand/Final Assessment Notice (FLD/FAN) had already prescribed, as they were issued beyond the three (3)-year prescriptive period, and that the executed Waivers extending the period to assess cannot be enforced. On the other hand, the Respondent counters that the Court of Tax Appeals (CTA) had no jurisdiction, as the assessments had already become final and executory due to the Petitioner’s failure to file a valid administrative protest within the prescribed period against the FLD/FAN. In ruling, the Court held that the Petition should be dismissed for being filed out of time. While the CTA has jurisdiction over the decisions of the Respondent regarding other matters arising under the Tax Code, such jurisdiction only attaches if a valid administrative protest has been filed. Pursuant to Revenue Memorandum Circular (RMC) No. 39-2013, protests must be filed with the proper office to be valid. In this case, since the Petitioner’s Letter-Protest was improperly filed, the assessment became final and executory, thereby allowing the Respondent to initiate collection efforts through the issuance of the WDL. The taxpayer should have filed a Petition for Review with the CTA within 30 days from receipt of the WDL. Since the Petition was filed beyond the reglementary period, the Court has no other recourse but to dismiss the Petition for lack of jurisdiction. [ALPHALAND MAKATI PLACE, INC. VS COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 10998, OCTOBER 1, 2025]

 

[TAXPAYER IS REQUIRED TO RESPOND WITHIN 15 DAYS FROM RECEIPT OF THE PAN; OTHERWISE, IT WILL BE CONSIDERED IN DEFAULT & THE FLD/FAN WILL BE ISSUED] [DISREGARDING THE 15-DAY PERIOD, DEPRIVES THE TAXPAYER OF THE OPPORTUNITY TO CONTEST THE PAN & PRESENT EVIDENCE IN SUPPORT THEREOF BEFORE AN FLD/FAN WAS ISSUED] [FAILING TO AFFORD THE PETITIONER DUE PROCESS RENDERS THE CIR'S ASSESSMENTS OF THE LATTER INESCAPABLY VOID]

Petitioner Getz Pharma (Phils.), Inc. filed a Petition for Review seeking cancellation of the assessment issued by the Respondent Commissioner of Internal Revenue (CIR) The Petitioner argued that the Formal Letter of Demand/Final Assessment Notice (FLD/FAN) is void for violating due process and for lacking a factual and legal basis, just like the Preliminary Assessment Notice (PAN). It also argued that the right to assess VAT for the first three (3) quarters of 2011 has already prescribed. Finally, the Petitioner maintained that the Respondent failed to prove the validity and truthfulness of the assessments. On the other hand, the Respondent countered that all presumptions are in favor of the correctness of the assessment. In ruling, the assessment is void due to a violation of due process. While PAN was received by the Petitioner on January 14, 2015, the Respondent issued the FLD/FAN on January 23, 2015, before the 15-day period for the Petitioner to respond had lapsed on January 29, 2015. This premature issuance disregarded the Petitioner’s right to respond and showed a lack of intent to consider their reply. Due to this failure to observe due process, the Petition was GRANTED, and the assessments were declared VOID. [GETZ PHARMA (PHILS.), INC. VS. HON. COMMISSIONER KIM S. HENARES, JACINTO HON. ALFREDO V. MISAJON, REGIONAL DIRECTOR, REVENUE REGION NO. 7 & HON. JOSEPHINE S. VIRTUCIO, REGIONAL DISTRICT OFFICER, REVENUE DISTRICT NO. 43-A, EAST PASIG, CTA CASE NO. 9245, OCTOBER 7, 2025]


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