More benefits sought for barangay officials

Benefits that barangay (village) officials are getting under pro-visions of the Local Government Code are not commensurate to their duties and functions, according to a lawmaker.

The provisions enumerating benefits and privileges for the barangay officials “leave much to be desired,” Rep. Sherwin Gatchalian of Valenzuela City (Metro Manila) on Sunday said, adding that their political jurisdiction may be small but their duties are expansive.

Under the law, village officials including village watchmen and members of the peace board are entitled to honoraria, allowances and other emoluments as may be authorized by law or village, municipal or city ordinance “but in no case shall it be less than one thousand pesos per month for the [village chief] and six hundred pesos per month for the [council] members, [treasurer] and [secretary].”

During incumbency, they are also entitled to insurance coverage and free medical care in any government hospital or institution provided that such includes surgery or surgical expenses, medicines, X-rays, laboratory fees and other hospital expenses.

In case of emergency where there is no available government hospital or institution, the village official concerned may submit himself for immediate medical attendance to the nearest private clinic, hospital or institution and expenses not exceeding P5,000 that may be incurred are chargeable against village funds.

They are also exempted from paying tuition and matriculation fees for their children who attend state colleges or universities, and may also avail of such educational benefits in a state college or university within the province or city where the barangay is.

Gatchalian proposed an increase in the emoluments that village chiefs receive that shall be not less than P5,000 a month under House Bill (HB) 5245.

Village council members, village youth council chairman, village treasurer and village secretary shall receive not less than P3,000 a month and village watchmen and members of the peace board shall receive not less than P2,000 per month in benefits, under the proposed measure.

HB 5245 also aims to change the at least P1,000 in Christmas bonus provided by law for the village chief, village council members, village treasurer and village secretary.

The measure provides that the Christmas bonus shall be at least P2,000 each for village chiefs, village treasurer, village secretary and members of the peace board.

Barangay officials shall also have a P1,000-each hazard duty pay during incumbency; another P1,000 for representation and transportation allowances; productivity incentive bonus of the same amount and; clothing allowance of P1,000 per year.

“A microcosm of the government, which by itself is authorized to enact laws, enforce them…, the barangay officials are on-call 24/7 for the welfare of their constituencies,” Gatchalian said.

“If we are to effectively give to local government units the self-sufficiency that the government envisions, we must be able to provide the conditions conducive to a productive leadership,” he added.

source:  Manila Times

All about LBT

LIKE IT OR NOT, the Christmas rush is upon us. The harried nature of the season is often characterized by inexplicable traffic, overcrowded shopping centers, work deadlines before the end of the year and calendars marked by this or that party or reunion.

After the Christmas season and just when we are about to heave a sigh of collective relief -- another equally busy season comes rushing in and this is the period for the renewal of business permits.

The Local Government Code requires all business entities to renew their business permits and pay their local business taxes (LBT) on or before the 20th of January of each year. The deadline applies to all cities and municipalities in the country. The Code, however, allows local government units (LGUs) to extend the time of payment but only for a justifiable reason or cause.

Note that the extended deadline only pertains to the payment date, which means that applicants for business permit renewal should still submit and file all the necessary documents beginning the first working day of January and only until the 20th thereof.

Some LGUs usually extend the payment date until the end of January. Quarterly payments of LBT may be allowed in some cases but some LGUs give discounts to businesses that opt to pay the full amount in a single payment.

Based on experience, applications for renewal of business permits with complete supporting documents submitted a day or a few days after the 20th of January, particularly in LGUs within the Metro Manila area, are considered as late filing, and will trigger penalties and surcharges based on the amount of LBT assessed.

Businesses that are liable to pay a large amount of business tax must ensure that applications are duly filed and LBT paid within the deadline; otherwise, the penalties and surcharges will likewise be great.

Most, if not all, LGUs only start accepting applications on the first working day of January, and not a day earlier. Given the tight deadline, prudence dictates that businesses start preparing and gathering all the required documents for renewal as early as October or November. Such documents include the audited financial statements, if applicable, and statements of gross receipts and value-added tax (VAT) returns filed -in the preceding year. If not earning income, such as in the case of a representative office, an Affidavit of No Income is normally required by some LGUs aside from other documentation.

The procedures for renewal and payment may vary from one LGU to another so it pays to know the specific steps and processes early on to avoid the risk of mistakes and having to start all over again with the January 20th deadline looming near.

Another thing to consider is the Papal Visit of Pope Francis which coincides with the renewal season. The City of Manila has declared January 16 to 19, 2015 as holidays, thereby reducing the available dates for filing applications in Manila. LGUs where the Pope is scheduled to visit may likewise declare holidays in the coming days. It is hoped that deadline extensions in these areas are declared as well.

Before the renewal period starts, concerned businesses must also take heed of certain policies of some LGUs when it comes to the assessment and collection of LBT. Some impose LBT on PEZA-registered entities based on the gross receipts generated by their non-PEZA registered activities.

By law, PEZA-registered entities are exempt from paying LBT regardless of whether they are enjoying income tax holiday or are under the 5% gross income tax regime. However some LGUs insist that the tax incentives apply only to PEZA-registered activities and not to “unregistered” ones. This reasoning may perhaps be the result of a BIR ruling which imposed regular income tax on income generated by PEZA-registered enterprises from activities which are not covered by their PEZA registration.

Another issue that commonly arises in the payment of LBT is the proper situs of the tax where the business entity has branches, sales offices, project offices, and plants scattered in different cities and provinces but maintains a head or principal office in a different area.

In one fairly recent decision, the Court of Tax Appeals (CTA) ruled that the City of Makati should not be allocated any LBT by virtue of a so-called project office as declared by a taxpayer. In that case, the taxpayer treated its office in Makati City as one of three project offices and/or plants, and allocated a portion of its LBT payment thereto. The court ruled that since said office in Makati is not indispensable to the main purpose of the company, it cannot be treated as a project office, hence the allocation of LBT to that Makati office was held to be improper and without basis.

Holders of government or legislative franchises must also take note of a recent CTA decision which declared that an LGU may impose both the LBT and the local franchise tax on the gross receipts and sale of the same taxpayer in the same year. A prominent cable company called this imposition double taxation and questioned the legality of such a move. The CTA then ruled that there is no double taxation if the franchise holders pay both the LBT and franchise tax in the same year because the two taxes are different in nature -- LBT is based on the privilege of engaging in business while franchise tax is imposed on the exercise of enjoying a franchise.

In sum, I advise all applicants for business permit renewals to start and prepare early, determine the procedures and requirements adopted by your concerned LGUs before the renewal period, know your rights and remedies in case of erroneous LBT assessments and most important, have a merry renewal season. Happy Holidays!

Susan M. Aquino is a senior manager at the tax services department of Isla Lipana & Co., the Philippine member firm of the PwC network.

(02) 845-2728

susan.m.aquino@ph.pwc.com

source:  Businessworld

Experts flag depot site’s dev’t needs

EVEN with a relatively cheap price tag of just P30,000-40,000 per square meter (/sq.m.), the 30-hectare site which the Pandacan oil depot now occupies will need more than a mere face-lift to turn into a business district, property experts said when asked on the Manila City government’s plan for the area.

“[M]uch infrastructure work needs to be done to transform this area. The roads are too narrow and traffic congestion will be an issue,” Julius M. Guevara, director of Research and Advisory Services of Colliers International Philippines, said in a text message last Sunday.

David T. Leechiu, country head of Jones Lang Lasalle Leechiu, Inc., said separately that Manila “badly needs” the planned redevelopment because urban decay is already setting in. “The conversion is easy; what is hard is who will build the infrastructure,” he said by phone on Sunday.

Infrastructure required includes roads, water treatment, sewage treatment, electricity, parking, and storm drainage facilities, Mr. Leechiu said.

While he described the city government’s land valuation of P30,000-40,000/sq.m. as “fair,” he noted the area’s problem with persistent flooding.

“Pandacan is a central area, with access to Quezon City, Mandaluyong, and San Juan, so a business district may work,” Mr. Guevara said.

He noted that Manila, being “one of the densest cities in the metropolis,” has a “high labor base” that could be tapped.

“We’ve had a lot of discussions with major developers, I’m sure they’re looking at it already,” Jose Carmelo J. Porciuncula, head of Capital Markets and Investments at KMC MAG Group, Inc., said in an interview on Nov. 26.

Mr. Porciuncula also cited the site’s attractiveness, noting “limited access to large chunks of land” in Metro Manila. “And of course the more land you have, the more flexibility you have in terms of development,” he said.

However, Mr. Leechiu warned that interested developers should conduct “due diligence” on the property and be aware of possible environmental problems.

“That site has been an oil depot for 20-30 years. I’m sure the oil firms took care of the site, but you’ll never know; so the developers have to do their checks,” Mr. Leechiu said.

On Nov. 27, Manila Vice-Mayor Francisco “Isko Moreno” Domagoso said the City of Manila plans to talk to major developers for conversion of the site into a business hub, particularly Ayala Land,Inc., Megaworld Corp., Robinsons Land, Inc., SM Prime Holdings, Inc., and Federal Land, Inc.

On Nov. 25, the Supreme Court, sitting en banc, voted 10-2 against Manila City Ordinance No. 8187, enacted under former mayor Alfredo S. Lim, saying it was “unconstitutional and invalid with respect to the continuing stay of the Pandacan oil terminals.” That 2009 ordinance had repealed a November 2001 precedent, Ordinance No. 8027 enacted during the administration of former mayor Jose L. Atienza, Jr., that reclassified parts of Pandacan and Sta. Ana districts as commercial from industrial on grounds of safety.

On the same day, the high court also ordered Chevron Philippines, Inc; Pilipinas Shell Petroleum Corp.; and Petron Corp. to submit to Manila Regional Trial Court Branch 39 updated comprehensive relocation plans and schedules within 45 days. Relocation, in turn, should be completed not later than six months afterwards.

source:  Businessworld