F 20110124 083714 jfc final letter to sec teves shell bir feb 1 2010

Joint Foreign Chambers of the Philippines

American Chamber of Commerce of the Phils., Inc. Australian-New Zealand Chamber of Commerce (Phils.), Inc. Canadian Chamber of Commerce of the Phils., Inc. European Chamber of Commerce of the Phils., Inc. Japanese Chamber of Commerce & Industry of the Phils., Inc. Korean Chamber of Commerce of the Phils., Inc. Philippine Association of Multinational Companies Regional Headquarters, Inc.

AMERICAN

1 February 2010

AUSTRALIAN-NEW ZEALAND

Hon. Margarito B. Teves Secretary Department of Finance 6th Floor, Department of Finance Building Roxas Boulevard cor. Pablo Ocampo Sr. Street Manila 1004 Dear Secretary Teves:

CANADIAN

EUROPEAN

JAPANESE

KOREAN

The Joint Foreign Chambers (JFC) represent a substantial share of investors operating in the Philippines and are almost always the first point of contact of new investors. In our efforts to achieve a level playing field for investors and continue to bring new investors to the country, especially in manufacturing, we are watching the dispute between government agencies and Pilipinas Shell with deep concern – for three reasons: 1. Double taxation, taxing both intermediates and the final product, undermines the JFC’s efforts to encourage manufacturing investments in the Philippines. Double taxation favors trading over manufacturing which cannot be in the interest of Philippine economic policy makers. We suggest that this policy be urgently addressed as it is detrimental to the vision of growth in manufacturing.

2. While we understand that government may have to change rules and regulations, we have always reiterated that the following principles are important for business: a. b. c. d. e.

consistency predictability fairness due process no retroactive changes.

Given the Shell / BIR / BOC debate, some of these principles are severely compromised and will discourage future investments. Again we request government to review this case in this light.

PAMURI

3. The JFC members are concerned about the heavy hand of government in this case, threatening to confiscate future shipments, endangering the supply of vital products to the economy, on the basis of retroactive changes in government regulations. In our view, government should also review this part of the BIR/BOC/Shell issue.

The JFC organizations and their members trust that this severe issue - affecting the environment in which business is done in this country – can be resolved fairly.

Again we request government to review this case in the light of the above.

Sincerely yours,

AUSTEN CHAMBERLAIN President American Chamber of Commerce of the Philippines, Inc.

RICHARD BARCLAY President Australian-New Zealand Chamber of Commerce of the Philippines, Inc.

JULIAN PAYNE President Canadian Chamber of Commerce of the Philippines, Inc.

HUBERT D’ABOVILLE President European Chamber of Commerce of the Philippines, Inc.

YASUHIKO ARIMITSU President Japanese Chamber of Commerce & Industry of the Philippines, Inc.

EUN GAP CHANG President Korean Chamber of Commerce of the Philippines, Inc.

SHAMEEM QURASHI President Philippine Association of Multinational Companies Regional Headquarters, Inc.

Cc: Department of Trade and Industry, Sec. Peter Favila Bureau of Internal Revenue, Commissioner Joel Tan-Torres Bureau of Customs, Commissioner Napoleon Morales