RP to shoulder P2.3-B vat in Subic-Clark-Tarlac Road
By LAWRENCE AGCAOILI, TODAY Reporter
The Bases Conversion Development Authority (BCDA) on Friday assured the Japan Bank for International Cooperation (JBIC) that the Philippine government would shoulder the value-added tax (VAT) and import duties of the contractors of the proposed P26-billion Subic-Clark-Tarlac Expressway.
BCDA said in a statement that the VAT and import duties amounting to about P2.3 billion would not be levied on the Japanese contractors of the proposed 94-kilometer (km) expressway that is being funded by the Japanese government through JBIC.
The BCDA said it has already applied for tax subsidy from the national government through the Department of Budget and Management and the Fiscal Incentives Review Board (FIRB). Its application has favorably been endorsed by the Department of Finance and has been included in the 2005 General Appropriations Act.
The provision under the law automatically appropriates “tax expenditure subsidies granted by the [FIRB] to government-owned and -controlled corporations (GOCCs), including those for tax obligations assumed by GOCCs pursuant to a valid agreement.”
As soon as the Senate ratifies the 2005 GAA, the BCDA said that it would automatically be granted tax subsidy for the project.
Of the total project cost, JBIC would finance 85 percent, or P21 billion, while BCDA would shoulder the counterpart fund of 15 percent, or P5.15 billion, for the right-of-way acquisition, administration cost, physical contingency, as well as taxes and duties.
JBIC provides the 40-year loan with an interest rate of 0.95 percent and 10-year grace period on principal.
The BCDA said the construction of the Subic-Clark Tarlac Expressway project would start within the first quarter of the year.
The Japanese consortia of Kajima Corp., Obayashi Corp., JFE Engineering Corp. and Mitsubishi Heavy Industries Ltd. agreed to the contract amount of P12.7 billion for package 1 (50.5 km from Subic to Clark) and Hazama Corp., Taisei Corp., and Nippon Steel Corp. agreed to P8.2 billion for Package 2 (44 km from Clark to Tarlac).
JBIC has expressed concern over the delay in the reimbursement of the VAT and duties paid by Japanese contractors of major projects funded by the Japanese government.
By virtue of the agreement between the Japanese and the Philippine governments, the Japanese contractors of projects funded under Japan’s Official Development Assistance (ODA) fund could not assume the VAT and other taxes.
To date, the outstanding VAT claims of Japanese contractors amounted to P344 million because the government, through the Bureau of Internal Revenue, continued to collect the 10-percent VAT on the contractors.
As of 2003, the outstanding debt obligation of the Philippine government to JBIC has reached P475 billion. The bank has approved 263 ODA projects worth P1 trillion since it began operation in the Philippines in 1971.
The Bases Conversion Development Authority (BCDA) on Friday assured the Japan Bank for International Cooperation (JBIC) that the Philippine government would shoulder the value-added tax (VAT) and import duties of the contractors of the proposed P26-billion Subic-Clark-Tarlac Expressway.
BCDA said in a statement that the VAT and import duties amounting to about P2.3 billion would not be levied on the Japanese contractors of the proposed 94-kilometer (km) expressway that is being funded by the Japanese government through JBIC.
The BCDA said it has already applied for tax subsidy from the national government through the Department of Budget and Management and the Fiscal Incentives Review Board (FIRB). Its application has favorably been endorsed by the Department of Finance and has been included in the 2005 General Appropriations Act.
The provision under the law automatically appropriates “tax expenditure subsidies granted by the [FIRB] to government-owned and -controlled corporations (GOCCs), including those for tax obligations assumed by GOCCs pursuant to a valid agreement.”
As soon as the Senate ratifies the 2005 GAA, the BCDA said that it would automatically be granted tax subsidy for the project.
Of the total project cost, JBIC would finance 85 percent, or P21 billion, while BCDA would shoulder the counterpart fund of 15 percent, or P5.15 billion, for the right-of-way acquisition, administration cost, physical contingency, as well as taxes and duties.
JBIC provides the 40-year loan with an interest rate of 0.95 percent and 10-year grace period on principal.
The BCDA said the construction of the Subic-Clark Tarlac Expressway project would start within the first quarter of the year.
The Japanese consortia of Kajima Corp., Obayashi Corp., JFE Engineering Corp. and Mitsubishi Heavy Industries Ltd. agreed to the contract amount of P12.7 billion for package 1 (50.5 km from Subic to Clark) and Hazama Corp., Taisei Corp., and Nippon Steel Corp. agreed to P8.2 billion for Package 2 (44 km from Clark to Tarlac).
JBIC has expressed concern over the delay in the reimbursement of the VAT and duties paid by Japanese contractors of major projects funded by the Japanese government.
By virtue of the agreement between the Japanese and the Philippine governments, the Japanese contractors of projects funded under Japan’s Official Development Assistance (ODA) fund could not assume the VAT and other taxes.
To date, the outstanding VAT claims of Japanese contractors amounted to P344 million because the government, through the Bureau of Internal Revenue, continued to collect the 10-percent VAT on the contractors.
As of 2003, the outstanding debt obligation of the Philippine government to JBIC has reached P475 billion. The bank has approved 263 ODA projects worth P1 trillion since it began operation in the Philippines in 1971.
posted by OlongapoCity Zambales at
2:08 PM
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