DOE's Garin welcomes SC ruling on Malampaya profit share
According to Garin, she is happy that the issue has been resolved, after the High Court ruled that the Philippine government's share in profits from the project already includes the income taxes of the contractors.
'It gives stability and security to the exploration investors natin, so it will encourage more,' she said in an interview with reporters.
'Ako, happy ako na alam na nila because before kasi, hindi nila alam. Ngayon alam na nila, and I think that will bring more investors to the Philippines for exploration,' she added.
(I am happy that they already know, because before, they didn't. Now they do, and I think it will bring more investors to the Philippines for exploration.)
In a 19-page decision, the SC En Banc reversed and set aside a decision of the Commission on Audit (COA), and lifted the charges imposed against Shell Exploration B.V., PNOC Exploration Corporation, and Chevron Malampaya LLC.
The decision, penned by Associated Justice Japar Dimaampao, was promulgated in February and made public in July.
The petition stemmed from COA's finding that P53-billion worth of income taxes were deduced from the government's share in the project, and the contractors were liable for the taxes.
According to the SC, the government signed a service contract for the project pursuant to Presidential Decree 87 or the Oil Exploration and Development Act, where contractors must remit 60% of the project's net proceeds to the government.
The High Court said that under the Presidential Decree, the contractor is liable to pay income tax, but the contractor's income tax forms part of or is counted in the government's 60% share, and that tax assumption is not tax exemption. — RF, GMA Integrated News
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