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THE Bangko Sentral ng Pilipinas (BSP) said not
subject to gross receipts tax, as long as the activity is part of
its monetary authority, the Bureau of Internal Revenue (BIR) said
Monday.
In a directive, BIR Commissioner
Lilian Hefti said the central bank is not subject to GRT, but if the
BSP engages in commercial business, it would be subject to
value-added tax.
The BIR cited central bank’s
business that will be subject to VAT, like leases of its several
properties like the Cultural Center of the Philippines in Pasay City
and billion worth of foreclosed assets.
“If in the performance of its
proprietary functions, BSP engages in any of the transactions
enumerated under Section 105 of the Tax Code, then it becomes liable
to [VAT],” Hefti said in her directive.
BIR said the central bank is
allowed to engage in commercial businesses to sustain its existence
as a body corporate enjoying fiscal and administrative autonomy.
The BIR issued the directive
after it clashed with the central bank over the multibillion GRTs
and withholding tax obligations from the sale of debt instruments
since 2005.
But the BIR later on admitted of
having erred when it announced that the BSP owes the national
government billions of pesos in back taxes.
Deputy Commissioner Gregorio
Cabantac earlier said the BSP informed the tax agency that it is
willing to pay P3.6 billion or 40 percent of its total GRT and
withholding tax obligations.
The official said the BIR is
likely to settle the tax problem rather than bring a case before the
Court of Tax Appeals, especially since it involves a government
institution.
--Chino S. Leyco
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