AFP Commissary wins P122M tax subsidy claim vs DBM
THE Commission on Audit has granted the petition of the Armed Forces of the Philippines Commissary and Exchange Services (AFPCES) for a P122.25-million tax subsidy entitlement for the fourth quarter of 2019 that was not released by the Department of Budget and Management (DBM).
In a seven-page decision, the COA en banc held that the claim was valid since the AFPCES was supposed to receive P449.4 million in 2019 as tax subsidy representing value-added tax it would have to pay otherwise for general merchandise and excise taxes on gasoline and diesel sold to its beneficiaries.
The subsidy entitlement was embodied in Resolution No. 4-19 of the Department of Finance – Fiscal Incentives Review Board (DOF-FIRB) issued on July 9, 2019, which approved the P449.405 tax subsidy chargeable against the 2019 national budget with a validity until Dec. 31, 2019.
The problem cropped up after the AFPCES’ request to the DBM to issue release the fourth quarter subsidy was submitted only on Jan. 22, 2020 which was beyond the validity set by the DOF-FIRB.
However, the COA en banc noted that because of the COVID-19 pandemic, then President Rodrigo Duterte extended the effectivity of all appropriations authorized under the 2019 General Appropriations Act by a full year ending on Dec. 31, 2020. This was under RA 11464 (An Act Extending the Availability 2019 Appropriations to December 31, 2020) which Duterte signed on December 20, 2019.
“When the AFPCES filed its request for the issuance of a SARO to cover the tax expenditure subsidy for the 4th quarter of CY 2019 on Jan. 22, 2020, RA No. 11464 was already effective. The DBM should have acted on the request because the appropriation for the 2019 tax expenditure subsidies was still available for release,” the COA pointed out.
At the same time, the Commission noted that all the documents required to support the AFPCES claim were submitted including the DOF-FIRB Resolution No. 4-19, a letter request of the Department of National Defense to the DBM requesting the issuance of the SARO, the DND endorsement letter of Jan. 20, 2020 also for the issuance of the SARO, the quarterly report of taxes and duties availment (QRTDA) for the 4Q of 2019,
