NCR and Calabarzon should reopen further
We should not have second thoughts on restarting the Philippine economy despite the spikes in Covid-19 cases. Limiting economic activities is no guarantee that the pandemic will slow down and go away. The virus is here to stay for a while until scientists discover a vaccine that will finally contain or eradicate it.
President Duterte himself is not against the reopening of the economy. What he wants is restarting the economy on a gradual basis, which I agree. The government is already doing that, but it can accelerate the reopening by focusing first on Metro Manila and the Cavite-lagunabatangas-rizal-quezon (Calabarzon) region to speed up the recovery process.
The gradual easing of quarantine restrictions from enhanced community quarantine to general community quarantine is a right step. We should take a further step and shift Metro Manila to a modified GCQ status, which is now being enjoyed by Batangas, Laguna and Quezon. Cavite and Rizal provinces, along
with the whole of Metro Manila, should also graduate to modified GCQ considering their proximity to each other and being the center of economic activities in Luzon and the entire Philippines.
But, first things first. Washing of hands, wearing of face masks, social distancing, contact tracing and disinfecting public and common facilities in these “liberated” provinces and regions should be the order of the day. This is the only effective way of battling and containing the virus spread.
Striking a balance between ensuring public health and restarting the economy can be done. Finance Secretary Carlos Dominguez III hit the nail on the head during last week’s pre-state of the Nation Address forum of the Cabinet’s Economic Development and Infrastructure Clusters. While the people’s health and safety remained the government’s top priority, Dominguez observed that Filipinos cannot keep retreating from the virus at the cost of their livelihoods, especially in Metro Manila and the Calabarzon region that account for a combined
Striking a balance between ensuring public health and restarting the economy can be done. Finance Secretary Carlos Dominguez III hit the nail on the head during last week’s pre-state of the Nation Address forum of the Cabinet’s Economic Development and Infrastructure Clusters. While the people’s health and safety remained the government’s top priority, Dominguez observed that Filipinos cannot keep retreating from the virus at the cost of their livelihoods, especially in Metro Manila and the Calabarzon region that account for a combined 67 percent of the country’s gross domestic product.
67 percent of the country’s gross domestic product.
Palace spokesman Harry Roque echoed Mr. Dominguez’s statement. Mr. Roque conceded that the Philippines had to partially reopen the economy or people would have died from a lack of livelihood.
Mr. Dominguez, meanwhile, stressed the importance of reopening Metro Manila and the whole of Calabarzon, from where many employees working in the capital region live. “It is vital that these regions reopen. The reality is that this virus will not go away until a vaccine is found. In the meantime, we must get back to work while staying safe,” said Mr. Dominguez in the PRE-SONA forum.
The government, he added, can never take the threat posed by Covid-19 lightly, as it must continue protecting lives in ways that do not prevent people from earning a living.
The public should stay vigilant about the virus while commuting on their way to the their workplace and manning their jobs. The government, for its part, should see to it that more aggressive localized lockdowns in Metro Manila are implemented to contain the virus spread.
Specifically with respect to inventories, a review of previous assessment cases that were elevated to the Courts would show that the BIR had been taking the position that for a deduction on account of a taxpayer’s destruction of inventories due to obsolescence to prosper, there is a mandatory substantiation requirement to be satisfied. And that is the issuance by the BIR of a document affirming the fact that the inventory was indeed destroyed. That can only happen if the BIR is notified by the taxpayer and a representative is sent on a specified date to witness and attest to the destruction of the inventory.
To justify the disallowance, it is the usual argument by the BIR that the issuance of a certificate is the only rational requirement that effectively substantiates a claim that inventory was destroyed. Otherwise, the government would be left with no recourse but to accept a regime where taxpayers substantiate self-serving claims through their own records and their own interested witnesses. Should there be no prior BIR approval or a request for a BIR representative who would witness the actual writeoff as part of the substantiation requirement, the cost of inventories
written-off is considered unreliable and cannot be allowed as deduction from taxpayer’s gross income.
Was there really a requirement for a taxpayer to have the destruction of its inventories/assets witnessed by a BIR representative and for the latter to issue certification on his observation? None. That may have been the practice, but that is not provided in the law or in any revenue issuance. In fact, while the Courts had agreed on the disallowances made by BIR examiners on a number of occasions, it was not on the absence of actual witnessing by a BIR representative and non-issuance of certification. The Court had in fact acknowledged that a certification from the BIR of the actual destruction of obsolete inventories is not necessary in order that the costs of written-off assets could be claimed as deductions. A taxpayer needs only to present competent documentary evidence to establish such destruction and the related costs. Failure to substantiate an inventory write-off would justify the disallowance of the deduction.
In essence, actual witnessing by a BIR representative of the destruction of inventories and the issuance of a certification would serve as proofs for claiming the costs of written