BSP exempted from GRT
Posted on July 13th, 2009
The Bangko Sentral ng Pilipinas (BSP) is exempted from certain taxes such as the gross receipt tax (GRT) which is mandated on other banks, for the very simple reason that it is not classified as a bank.
Said exemption was stated in the Revenue Memorandum Circular 65-2008 which was signed by former Bureau of Internal Revenue (BIR) commissioner Lilian B. Hefti.
The BIR concluded in the memo that the BSP is not a bank or a non-bank financial intermediary performing quasi-banking functions. It hopes to clarify BSP’s taxation status and the legal basis for imposing taxes or implementing tax exemptions for BSP.
The most immediate implication for the decision is that the BSP is exempted from the gross excise tax which is a sales tax, or most commonly referred to as GRT. Armando L. Suratos said that the BIR memo is still in effect even if Hefti is no longer BIR chief.
Suratos said, “The memo was a result of almost a year of consultations between the BSP and the BIR and we agree with them that BSP is not a bank.” He added, “The circular is still in placed.”
He also said that the memo only clarified GRT status and not other taxes, such as value added tax (VAT) which the BSP still pays.
But the memo has created confusion within the central bank. While it was issued to clarify the institution’s taxation status, the clause which declared it “not a bank” has opened other arguments.
Just like other banks, the BSP is accepting deposits and regulatory body. Its responsibilities include money, banking and credit… just like any other bank. It is also engaged in banking activities as per its constitutional and statutory mandates but not for commercial or business purposes.
