Biz Buzz: BIR vs Puregold (Round Two)
Yes, the Bureau of Internal Revenue lost its case against Puregold Duty Free Inc. of billionaire businessman Lucio Co, but this doesn’t mean tax chief Kim Henares will just take the Supreme Court’s decision lying down. Biz Buzz understands that Henares and the BIR are set to file an appeal with the high tribunal in an effort to reverse the decision on the P2.7-billion tax case against Puregold.
The BIR had been trying to collect the amount from Puregold, which it said represented value-added tax and excise tax levies on imported tobacco and alcohol products from 1998 to 2004. Puregold’s position that it was covered by a tax amnesty program was supported by a Court of Tax Appeals decision in 2012 and upheld recently by the Supreme Court.
Does the BIR have a strong case to make for a reversal of the Supreme Court’s decision? It remains unclear what the government’s motion for reconsideration will be based on, but we understand that they are banking on the fact that Puregold won this case by the slimmest of margins—a 3-2 decision by the Supreme Court’s Third Division.
Those who sided with Puregold were Associate Justices Presbitero Velasco Jr. (who also chairs the Third Division), Bienvenido Reyes and Diosdado Peralta. Those who dissented were Associate Justices Martin Villarama Sr. and Jose Catral Mendoza with the former writing the dissenting opinion for the minority.
The BIR’s appeal is expected to lean on Villarama’s dissenting opinion, which said that, should an appeal be filed by the government side, the issue could be elevated to the en banc—that is, the entire Supreme Court and not just a single division —considering the large sum involved that has a “huge financial impact on business thus affecting the country’s welfare.”
“If this is not smuggling, I don’t know what it is,” Villarama said. Ouch.–Daxim L. Lucas
Blazing ahead (of schedule)
Petron Corp.—one of only two Philippine firms in Platts’ Top 250 Global Energy Company Rankings last year—is closing in on a milestone that could further boost its performance as one of the truly world-class firms in the energy sector.
A source privy to the Bataan Refinery (RMP-2) said the facility upgrade might start full commercial operations sooner than expected. The facility, currently in the commissioning and stabilization phase, is apparently close to reaching its target 100-percent utilization. Initial estimates set full commercial production at early 2016.
The upgrade turns Petron’s refinery into one of the most advanced facilities in the Asia-Pacific region in terms of processing and energy efficiency, operational availability and complexity. More than international awards, such level of operations arms Petron as competition further tightens in the domestic market.
Company CEO Ramon S. Ang has called the refinery upgrade a “game changer,” saying it would not only benefit Petron through higher production but the domestic oil industry as well through the increased supply of world-class products.
Just how far Petron can pull away from the competition remains to be seen, but surely more competition and higher level of service can only be good for the consumer.
Incidentally, this development could also be good news for shareholders of San Miguel Corp. whose earnings have been gyrating each quarter depending on whether Petron makes good profit margins (when petroleum prices rise) or not (when prices go down). Good news for everyone, it seems.–Riza T. Olchondra
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