By Juzel L. Danganan
MANILA, August 30 (PNA) – The Court of Appeals has rejected the motion for reconsideration (MR) filed by the Malampaya consortium for its tax case, which decided they have to pay the under-collected tax amounting to Php 53.14 billion.
In the decision, the COA said that ”wherefore, premises considered, the Consolidated Petitions for review of Shell Philippines Exploration B.V., Philippines National Oil Company-Exploration Corp. and Chevron Malampaya LLC. and Department of Energy, of National Government Sector Cluster B Decision No. 2011-009 dated August 22, 2011 is hereby DENIED.”
The COA explained that the law states that the government has the power to change the tax percentage, as it only required a minimum of 60 percent, stressing it could be increased.
”Contrary to the position of the DOE, which the other petitioners also share, the above provisions do not state, expressly or impliedly, that the government’s share, including income taxes, is only 60 percent,” it said.
The COA said the DOE bared “before the commission that the government share should be at least sixty percent of the difference between the gross income and the sum of the operating expenses and Filipino participation incentive and that this 60 percent includes the income taxes of the contractor.”
It added that it contends the decision of the secretary and the president to set the minimum percentage for the tax.
The commission further explained that the honorable commission maintains that the government’s share became less than 60 percent due to a tax assumption.
The COA added that the Filipino participation incentive and operating expenses, which is a tax incentive granted to a consortium which has a 40 percent Filipino-affiliated company, is applicable not to the 40 percent share of the contractor but the gross income.
The commission further stressed that certain provisions state that the Energy Department secretary has the power to provide other or additional terms and conditions not inconsistent with or contrary to the provisions of Presidential Decree 87 or 1459. It added the department secretary is authorized to enter or re-negotiate petroleum service contracts, with the approval of the president of the Philippines.
The COA, citing Article IX-D of the 1987 Constitution, said that it has the power and authority to examine, audit and settle all accounts pertaining to the revenue and receipts of and expenditures or uses of funds and property owned or held in trust by or pertaining to the government. Service Contract 38 is owned by the government.
It further explained it has the authority and subject to the limitations of the article to define the scope of its audit and examination.
”There is no dispute that the Honorable Commission has the power to examine, audit and settle revenue of the Government from its share in the Malampaya natural gas project,” the COA said. (PNA)