SBMA: Tax ruling doesn’t cover Philip Morris project
The Subic Bay Metropolitan Authory (SBMA) said a $20-million tobacco leaf warehouse project of Philip Morris International in the Subic Bay Freeport, northwest of Manila, would not be covered by a Supreme Court decision allowing collection of tobacco and alcohol taxes in the free port area.
The tax will not apply to the Philip Morris facility because the warehouse will be used only to store tobacco leaf for use in the company’s cigarette factory in Batangas province or for export to Philip Morris plants abroad, the SBMA said in a statement.
Under Republic Act No. 9334, which increased excise tax rates on alcohol and tobacco products, importation of these products -- even if destined for duty-free shops -- is subject to all applicable taxes, duties and charges.
The SBMA said the law also provides that tobacco products may be exempt from prepayment of excise tax “if the same are to be exported, or used in the manufacture of other tobacco products on which the excise tax will eventually be paid.”
The SBMA expressed concern for about 30 SMBA-registered companies engaged in importation, warehousing and retailing of tobacco and alcohol products, saying these would be directly affected by imposition of the excise tax.
The SBMA described the Supreme Court ruling -- which voided a local trial court’s suspension of the excise tax’s collection in Subic -- as a “big blow” to the free port regime in Subic and to government efforts to promote Subic as an investment center and a premier logistics hub in Southeast Asia.
SBMA Administrator Armand Arreza had said the Bases Conversion and Development Act of 1992 gave SMBA-registered establishments tax exemption on the goods brought into the free port.
“If we were to slap excise taxes on the merchandise imported by Subic-registered companies, it would be like changing the rules in the middle of the game,” Arreza said. “If we would reverse our policy of giving tax-free benefits to investors in Philippine free ports, then we would risk losing entire industries in the Subic Bay Freeport Zone.” Ronnel W. Domingo; with INQUIRER.net
The tax will not apply to the Philip Morris facility because the warehouse will be used only to store tobacco leaf for use in the company’s cigarette factory in Batangas province or for export to Philip Morris plants abroad, the SBMA said in a statement.
Under Republic Act No. 9334, which increased excise tax rates on alcohol and tobacco products, importation of these products -- even if destined for duty-free shops -- is subject to all applicable taxes, duties and charges.
The SBMA said the law also provides that tobacco products may be exempt from prepayment of excise tax “if the same are to be exported, or used in the manufacture of other tobacco products on which the excise tax will eventually be paid.”
The SBMA expressed concern for about 30 SMBA-registered companies engaged in importation, warehousing and retailing of tobacco and alcohol products, saying these would be directly affected by imposition of the excise tax.
The SBMA described the Supreme Court ruling -- which voided a local trial court’s suspension of the excise tax’s collection in Subic -- as a “big blow” to the free port regime in Subic and to government efforts to promote Subic as an investment center and a premier logistics hub in Southeast Asia.
SBMA Administrator Armand Arreza had said the Bases Conversion and Development Act of 1992 gave SMBA-registered establishments tax exemption on the goods brought into the free port.
“If we were to slap excise taxes on the merchandise imported by Subic-registered companies, it would be like changing the rules in the middle of the game,” Arreza said. “If we would reverse our policy of giving tax-free benefits to investors in Philippine free ports, then we would risk losing entire industries in the Subic Bay Freeport Zone.” Ronnel W. Domingo; with INQUIRER.net
Labels: Philip Morris, sbma
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