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New rules in securing tax clearance
The merciful Lord
TAX LAW FOR BUSINESS
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ONTRACTORS or bidders participating in government projects, as mandated under Executive Order 398, must be mindful of Revenue Regulations (RR) 3-2005 and its amendments, the latest of which is RR 01-2016. Discussed below are the salient features of RR 1-2016, compared vis-à-vis the relevant issuances preceding it. Under this RR 1-2016, the meaning of tax clearance was expanded and clarified as referring to the clearance issued by the Accounts Receivable Monitoring Division (formerly Collection Enforcement Division) attesting that the taxpayer has no delinquent account and has satisfied all other criteria for the issuance of tax clearance. Pursuant to Revenue Memorandum Circular (RMC) 16-2005, the tax clearance to be issued by the Bureau of Internal Revenue (BIR) will have a validity period of one year from date of issuance. However, under RR 1-2016, a tax clearance valid for six months from the date of issuance shall be issued to any applicant who has satisfied the following criteria: a. No unpaid annual registration fee; b. No open valid “stop-filer” cases; c. A regular user of the BIR’s Electronic Filing and Payment System for at least two consecutive months prior to the application for tax clearance (new applicants only); d. No pending criminal charge with the Department of Justice or any competent court; and e. No delinquent account and/or judicially protested tax assessments with decision favorable to the BIR. Further, provisional tax clearances were previously allowed under RMC 58-13, except to the taxpayers who applied for compromise settlement of tax liabilities or abatement of penalties. Unlike RMC 58-2013 and RR 3-2005, this RR 1-2016 now specifies the instances when the tax clearance may be issued, as well as the limitations and qualifications, as laid down in item 4. Most notable of which are as follows: a. Tax assessments timely protested administratively and/or
timely elevated to the Court of Tax Appeals or to higher court, and where the collection of the assessments are not yet considered final, executory and demandable, shall not be considered delinquent account. b. Applicants with tax assessments, which were timely judicially protested but already covered by an earlier court decision favorable to the BIR and the same are subject of appeals/motions for reconsideration timely filed by the taxpayers, shall be issued tax clearance, provided an escrow deposit shall be made with any authorized agent bank equivalent to the tax liabilities being protested. c. Applicants with delinquent accounts, but the tax liabilities involved were the subject of the applicant’s application for either abatement of penalties or compromise settlement, shall also be issued tax clearance, provided the applicant shall make an escrow deposit with any authorized agent bank equivalent to the tax liabilities, including the applicable delinquency penalties (net of the amount offered for payment upon application of the abatement or compromise settlement). The above stringent but favorable revisions shall take effect after February 26. The author is a senior associate of Du-Baladad and Associates Law Offices, a member-firm of World Tax Services. The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at filamer.miguel@bdblaw.com.ph, or call 4032001, local 360.
China’s credit conundrum B C B | Bloomberg View
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HINA has two very good reasons to slow the gusher of cheap money that continues to flood its economy. The first, obviously, is to prevent the kind of financial implosion that’s struck down similarly debt-burdened countries. The second is just as important: To clear out the deadwood in the world’s secondlargest economy. For Chinese leaders, the need to prop up faltering GDP growth outweighs fears about a rapid buildup in debt. In January alone, banks made a record $385 billion worth of new loans, more than 70 percent higher than the year before. Debt now tops 230 percent of GDP and could reach as high as 300 percent of GDP if current trends continue. Billionaire investor Bill Gross has joined the chorus of voices calling this trajectory “unsustainable.” Even the Bank for International Settlements, a body not known for hyperbole, has warned that Chinese debt is reaching levels that typically trigger financial crises. The recent surge in credit is merely an extension of policies put into place after the global financial crisis. To fend off a downturn, China launched a massive 2009 fiscal-stimulus package focused on infrastructure and investment spending. Simultaneously, policy-makers ordered banks to open the credit spigot. Since January 2009, total loans in China have grown 202 percent, for an annualized growth rate of 34 percent. Local governments and businesses alike have been only too happy to partake in the largesse. The problem is that most of this money has gone into the least efficient, most saturated parts of the economy. Nomura estimates that 40 percent of bank loans to companies go to state-owned enterprises, although they account for barely 10 percent of China’s output. The money is being used to prop up companies that probably shouldn’t survive: One Chinese securities firm suggests 45 percent of new debt is being used to pay interest on old debt, like using a new credit card to pay off an old one. Cheap money is also continuing to expand capacity in sectors that already have too much. There are
the heavens; out of His covenant love for us, God has steadfast love for those who fear Him.
Msgr. Sabino A. Vengco Jr.
ALÁLAONG BAGÁ
Atty. Filamer D. Miguel
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HE Lord pardons, heals, redeems; abounding in kindness, He is merciful (Psalm 103:1-2, 3-4, 6-7, 8, 11). I have come in search of fruit on this tree, but have found none. Cultivate and fertilize it; it may bear fruit in the future (Luke 13:1-9).
The Lord is kind and merciful PSALM 103 is a hymn of praise that begins in a personal way: the psalmist calls upon himself (or his soul) to bless and thank the Lord for so much goodness already received. The Hebrew word for soul (nepesh) means life-breath, the living person: The psalmist in the totality of his person, in “all his being,” is summoned to bless the Lord in “His holy name.” In the biblical world, a person’s name expresses the person’s unique identity. It is showing great reverence for God to pay homage to the divine name, rather than to God directly. The benefits from God that the psalmist tells himself not to forget
are the divine pardon for his iniquities, the healing for his ills and his life’s redemption from destruction. God is to be praised for His protection and defense of those in need, as He did for Israel in their Egyptian bondage and during their desert sojourn. These acts of God flow from His loving-kindness (hesed) and tender compassion (rahamim), divine attributes associated with His holy name. Because of His graciousness and mercy, God is slow to anger and does not deal with us, as our sins deserve nor repay us according to our iniquities. The extent of the divine kindness is compared to the vast expanse of
An agenda for humanity
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B B K- | United Nations Secretary-General
ORE people desperately need humanitarian assistance than at any time since the founding of the United Nations. More warring parties are brazenly violating international humanitarian law. More resources than ever are needed to meet sharply escalating humanitarian needs. Yet we face the largest-ever funding shortfalls. For these reasons and more, I am convening the first-ever World Humanitarian Summit on May 23 and 24 in Istanbul. I am urging global leaders, international organizations and others to commit to deliver more and better for those in greatest need. There is no time to lose. Climate change is affecting lives and livelihoods across our fragile planet. Brutal and seemingly intractable conflicts, violent extremism, transnational crime and growing inequality are devastating the lives of millions of men, women and children, and are destabilizing entire regions. More people have been forced to flee their homes than at any time since the Second World War. Around the world, more than 125 million people need humanitarian assistance. If they were all in one
currently about four-and-a-half years’ worth of residential real estate sales under construction. Coal plants, which are currently running at only 67 percent of capacity, are investing in an additional $9.4 billion worth of capacity in 2015, with a similar number expected in 2016. The government has pledged to slash capacity in the bloated steel sector, by as much as 13 percent by 2020. But given that the industry is already losing about $25 for every ton of steel produced, those small cuts, even excluding capacity additions, are hardly going to solve the problem. The government isn’t blind to the dangers. Its 2016 economic plan lists “deleveraging” and capacity reduction as two major priorities for the year. The central bank has imposed limits on certain banks that had been a bit too liberal in their recent lending. But the fact remains that the state-owned giants drawing the bulk of new lending are also the most politically well-connected. Rather than shutting them down and throwing potentially millions of Chinese out of work, the government hopes to keep them afloat while they’re merged and overhauled. There’s little reason to think this plan can succeed. No country with a similarly rapid rise in debt levels has escaped either a financial crisis, or like Japan, a prolonged slowdown. Continuing to lend at this pace will only increase the ranks of zombie companies, alive because of government life support. Slowing lending will inevitably mean lower GDP growth, more corporate bankruptcies and higher unemployment. But it will also reduce the buildup of risks that are otherwise certain to come due. At the same time, Chinese leaders have an opportunity to speed along the transition to a more dynamic economy focused more on services and consumption than old-line manufacturing and investment. Instead of spending money bailing out dud companies, the government should be diverting resources to start-ups, smalland medium-sized companies and other private-sector businesses with greater growth potential. Money should be spent on retraining workers to find new jobs in these industries, rather than more highways and apartment buildings. Companies that can’t survive without additional lending should be allowed to fail.
Thursday, February 25, 2016
country, it would be the eleventhlargest nation on Earth, and one of the fastest growing. Today’s complex challenges cross borders. No single country or organization can address them alone. We need to restore trust in the ability of our national, regional and international institutions to confront these challenges. A sense of shared humanity must shape our politics and drive financial decisions. In advance of the Summit, I have set out an Agenda for Humanity as a framework for action, change and mutual accountability. It has five core responsibilities. First, leaders must intensify efforts to find political solutions to prevent and end conflict. The enormous human and economic cost makes conflict the biggest obstacle
Fruits expected, repentance needed
TWO violent incidents are referred to in the gospel narrative: The massacre of some unruly Galileans during their ritual sacrifice upon the order of Pilate and the collapse on a number of people of a tower on the southeast corner of the temple wall near the pool of Siloam. These two tragic events, one clearly an accident and the other sheer brutality, raise the question of culpability in the minds of the people. Presuming a direct correlation between a person’s moral character and the circumstances of his life, the public have probably wondered for what sins have those victims of tragedies suffered. Jesus insists that those victims were not guilty of sin more than anybody else. He focuses, instead, on the suddenness of the tragedies and, therefore, on the possible unpreparedness of the victims. To avoid such double calamity, Jesus admonishes the people to repent. They should be reconciled with God,
to human development. We must move from managing crises to preventing them. Second, countries must uphold the norms that safeguard humanity. This means complying with international humanitarian and humanrights law and stopping the bombing and shelling of civilian targets and areas. It also means committing to national and international justice and ending impunity. Third, we must leave no one behind—and we must reach those who are furthest behind, first. This means transforming the lives of the most vulnerable, including those living in conflict and in chronic poverty, and those living with the risk of natural hazards and rising sea levels. We must reduce forced displacement, provide more regular and lawful opportunities for migration, empower women and girls and ensure quality education for all. We cannot meet the Sustainable Development Goals, agreed by world leaders last September, if we do not reach these people. The fourth core responsibility is to move from delivering aid to ending need. We need to close the
so that anytime a disaster strikes, the misfortune will not furthermore be accompanied by divine judgment. The parable Jesus adds underlines the mercy of God. The fig tree’s owner has the right to expect his tree to bear fruit. Concluding that the tree would never produce fruits and is only wasting the space it stands on, the order was to cut it down. Happily the tree is given more time to produce. Alálaong bagá, in God’s mercy we are given the time necessary to repent of our offenses against God and to bear fruit. God, in His lovingkindness, has been always ready to forgive us our iniquities and to heal our ills. We should not forget all He has done for us, treating us not in anger, but in abounding kindness. Lent is the grace-filled season for us to do what we should do. This is the time for prayer and thankful reflection on the divine mercy for all those who fear Him and would do everything to maintain a fruitful relationship with Him. Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on dwIZ 882, or by audio-streaming on www.dwiz882.com.
humanitarian-development divide for good. We must also anticipate crises, not wait for them to happen. We must strengthen local leadership and capacity, reduce vulnerability, and increase the resilience of people and communities, who will always be the first and last responders in crises. Fifth, we must find smart and innovative ways of mobilizing funds. This will require diversifying and expanding the resource base and using a wider variety of financing tools. I have proposed a new international financing platform with the World Bank to identify mechanisms to finance our response to protracted crises. The Agenda for Humanity provides key actions and strategic shifts which the world requires to reduce humanitarian needs and contribute to achieving the Sustainable Development Goals. I urge world leaders to come to the World Humanitarian Summit committed to promote sustainable human progress and a life of dignity and security for all. The writer’s report “One Humanity: Shared Responsibility” was published on February 9.
Regular guy Jeb Bush lost to gladiators B L B Bloomberg View
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EB BUSH did everything wrong in this presidential campaign, but I’m sorry to see him go. He was, for want of a better word, the most human of the Republicans in the race. I saw him campaign in Iowa, New Hampshire and South Carolina. He was clearly undergoing a difficult learning process. In Iowa, despite having sunk low in the polls, he was trying to sound confident, being a little more forceful than his quiet personality and coming off nervous, even a little scared of his audiences. He was also trying to talk as little as he could about his family, trying too hard to show he was his own man. Conservative talk-show hosts were laughing at his posters, which just said “Jeb!”: He was the only candidate without a last name, when everyone knew he had the most famous one. And then there were the debates, in which Donald Trump pummeled him with the ease of a champion boxer taking on a shy, bespectacled novice. He overspent crazily on ads, clearly believing in the power of this old-time blunt instrument—but it just gave more ammunition to Trump, who kept telling his fans that pathetic Bush was just burning money without any visible result. In the end, Bush lost so badly in Iowa that each vote cost him $626, according to my calculations based on data from Kantar Media’s Campaign Media Analysis Group. In New Hampshire, the attempts at aggressiveness were gone. Bush embraced his normcore style and he listened to voters more than he talked at them. He sounded concerned and compassionate as he gave
substantive answers to voters’ questions, whether they dealt with allowing women to be drafted into the military, specific plans for replacing Obamacare or his plans for education reform. New Hampshire’s heroin epidemic was the biggest issue in that state’s campaign. Melissa Crews, who runs a recovery center for addicts in Manchester, told me how Bush —whose daughter Noelle had struggled with substance abuse—showed up at the center without cameras or much of an entourage, made a donation and had an intelligent discussion of what could be done to help people trying to kick a drug habit. It was in New Hampshire that Bush realized it was OK to bring his family into the campaign. He welcomed his mother, Barbara Bush, and started off his campaign appearances by talking at length about his love for his wife. He actually started sounding unashamed of his last name and the dynasty he represented. Before one town hall I attended, his son, George P. Bush, introduced him as a “grinder” who would stay in the race to the bitter end and never give up. On February 6, Bush actually performed well against Trump in a debate. He scored some points against him on eminent domain, and when Trump tried to shush him, the audience booed—one of the most uncomfortable moments for Trump in the televised part of this campaign. When the vote count showed he had improved his performance —though a vote still cost him $293, second only to Chris Christie’s $295—it seemed to me well-deserved. His learning curve was so steep that if his performance curve matched it, he’d soon have a fighting chance. What I saw in South Carolina was anticlimactic. Jeb brought in the heavy artillery
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—his brother George W. Bush, still well liked by Republican voters—but he couldn’t match the ex-president’s charisma and warmth. By contrast, he sounded desperate, pleading. He’d found out that Republicans weren’t allergic to the Bush name after all, but also that they doubted whether he was worthy of it. He lacked the aura of victory, he was too soft, too easy to mock and dismiss. At a church service I attended on Saturday, as voting in South Carolina’s primary was winding down, the preacher was referring to King Nebuchadnezzar as “Neb Exclamation Point.” It didn’t even elicit many laughs: Bush was gone, performing worse than polls had predicted, failing even to get into the double digits as he had done in New Hampshire. He lost out to candidates whose human frailties are far less obvious. Trump only pretends to be offended when someone—be it Ted Cruz or the pope himself—attacks him: He has the most fun when that happens. Cruz still grinds out seven campaign stops per day, as he did in Iowa, without breaking a sweat or cutting corners on his oratory and he seems made of steel. Marco Rubio does his perfectly rehearsed charming boyish act and works feverishly behind the scenes, picking up endorsements and money that would have gone to Bush had he looked a winner. They are gladiators of the highest caliber. Bush, despite his family history, is just a regular guy. He’s not necessarily weak— he’s normal, in the sense of being able to carry on a normal conversation where the others perform. Clearly, Republican voters don’t want normality, though they flirted with it in New Hampshire. They want a show and a sword fight. They may not like it when the winner claims his spoils, though.