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PNoy admin to heed whatever SC decides on PEACe bonds tax


President Benigno Aquino III on Thursday said his administration will heed whatever decision the Supreme Court will render on the PEACe bonds, saying Malacañang is just an implementer of the law. “Well, it’s in the court right now and the courts will decide whose interpretation is correct," Aquino told reporters during the commemoration of the 67th anniversary of the Leyte Gulf landing in Palo, Leyte. “I think it is safer for us to implement the law the way we understand it rather than to ignore implementing the law and be guilty of not fulfilling our obligations and duties," he added. The Supreme Court has stopped government from imposing BIR Ruling No. 370-2011 which seeks a 20-percnet final withholding tax on the 10-year Poverty Eradication and Alleviation Certificates or PEACe bonds. Eight of the country's major banks — namely, Banco de Oro, Bank of Commerce, Philippine National Bank, China Bank, Metrobank, Philippine Bank of Communication, Philippine Veterans Bank, and Planters Development Bank – on Monday filed a petition with the high tribunal to keep government from collecting the withholding tax. A violation of the Tax Code The 20-percent final withholding tax violates the 1997 Tax Code and the “non-impairment of contracts" clause under the Constitution, the banks said in their complaint. Caucus of Development NGO Networks (CODE-NGO) bought the bonds on Oct. 16, 2001 through Rizal Commercial Banking Corp. (RCBC) at the discounted rate of P10.17 billion and at 12.75 percent interest. It then sold the bonds for P1.83 billion. Since then, the bonds have already been resold, mostly to banks and insurance companies. The 10-year bonds matured on Tuesday, Oct. 18, and thus became redeemable. The Treasury Bureau will have to pay bondholders a total of P35 billion, including P24.3 billion in interest income or discount. President Aquino said the PEACe bonds issue was just inherited by his administration. “Yung P5-billion na tax na dapat makuha ng gobyerno, wala akong karapatan para i-waive, okay. ‘Yung taxes imposed by Congress — ‘pag magbibigay ka ng exemptions o i-a-amend, babawasan, dadagdagan puro Kongreso po ‘yan. Kami taga-implement ng batas," the President noted. — VS, GMA News