Ressa’s béte noire rolls back Purisima in Mercure tax row
Mining and property magnate Wilfredo Keng has rolled back the attempt of former finance secretary Cesar Purisima and then BIR commissioner Kim Jacinto-Henares to tax his pre-operating Malate hotel project.
The Court of Tax Appeals, in an en banc decision released earlier this week, agreed with Keng that a 2010-era propertyfor-share transaction between two real estate companies controlled by Keng involved a VAT-free, pre-incorporation subscription “that cannot be deemed as sale.” Keng was in the news recently for having instituted a cyber-libel complaint against Filipina-American journalist Maria Ressa and her Rappler website.
The Bureau of Internal Revenue had wanted to collect valueadded tax of 12 percent, amounting to P5.4 million, on the transfer of the two lots at the corner of Sta. Monica and Adriatico streets to Century Peak Hotel Management and Development.
Century Peak, in turn, is developing a 499-room hotel on the corner property to be operated by Mercure, a mid-scale brand owned by the French multinational AccorHotels, whose portfolio of 26 marquees include Raffles, Fairmont, Sofitel, and Novotel.
After Century Peak protested, the BIR advised Keng to appeal to the DOF, which turned it down, prompting the businessman to file a petition for certiorari with the tax court to stop Purisima.
During the trial, “only respondents (the two Keng companies) presented evidence in support of their case,” according to the minutes of the June 22, 2016 hearing. “On the other hand, petitioner (Purisima) and the CIR (Commissioner of Internal Revenue) failed to present any, despite opportunity granted.”
After being notified of the defeat, new Finance Secretary Carlos Dominguez III tried to salvage their case, with both appeals failing to dissuade the tax court.
According to earlier news reports, the Malate Mercure has a group of Thai investors owning 40 percent of the project, with Keng’s Century Peak group counting as the majority owner. It was originally scheduled to open last year, the second Mercure brand in the country after the Ortigas branch.
Keng, 53, also controls the listed Century Peak Metals Holdings, which mines ferronickel in Dinagat Island, with a market cap of P7.8 billion.
According to regulatory disclosures, Century Peak has secured nearly all the pertinent national and local government approvals for the establishment of a coking coal plant and a smelting plant in Isabel, Leyte, as well as a cement plant in Pinamungahan, Cebu, all in partnership with mainland Chinese investors.
Keng is also listed as the owner of the iconic Good Earth Emporium, now called Good Earth Plaza, by the Carriedo LRT station in Manila.
Incidentally, Jacinto-Henares now works out of her home in Parañaque as senior advisor at the Washingtonbased business strategy firm Albright Stonebridge Group where she advises clients on investment strategies and commercial issues in the Philippines.
Albright, in this instance, refers to former US secretary of state Madeleine Albright.
Purisima, on the other hand, has been keeping his head down, avoiding public political entanglements as an independent director of Ayala Land, Universal Robina, and the AIA Group, the Hong Kong-based regional life insurance powerhouse.
Money talks
• Papua New Guinea has disapproved a proposal from Philippine Air Lines and Air Niugini to forge a codesharing agreement, with PNG’s independent consumer and competition commission claiming that the planned arrangement is “anti-competitive.”
Air Niugini and PAL have a combined nine flights a week for the Manila-Port Moresby route.
• Evergreen banker Arsenio Bartolome III has been pulled out of retirement to become the chairman of the listed I-Remit, the biggest money-remittance company servicing overseas Filipino workers.
Heard through the grapevine
The legal affairs chief of the National Food Authority, Ma. Theresa Villafuerte is suing Davao City Mayor Sara Duterte-Carpio and the city government over a planned tax imposition against the government rice authority.
E-mail: moneygoround.manila@yahoo.com