Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Fifteenth Congress
First Regular Session

COMMITTEE REPORT NO. 73}
‘Submitted by the Committee on Ways and Means on___0.9 MAR 2011
RE House BittNo, ASB 1

Recommending its approval in substitution of House Bill No. 3927
ep. Hermilando |. Mandanas

Spensor

Mr. Speaker:

The Committee on Ways and Means to which was referred House Bill No. 3927,
introduced by Rep. Hermilando |. Mandanas, entitled:

“AN ACT SIMPLIFYING THE AVAILMENT OF THE GROSS INCOME TAX FOR
CORPORATIONS AMENDING FOR THE PURPOSE SECTIONS 27(A) AND 28(A) OF THE
NATIONAL INTERNAL REVENUE CODE (NIRC)} OF 1997, AS AMENDED *

has considered the same and recommends that the attached House Bill No.

4A3EL. emitted:

“AN ACT SIMPLIFYING THE AVAILMENT OF THE GROSS INCOME TAX FOR
CORPORATIONS AMENDING FOR THE PURPOSE SECTIONS 27(A) AND 28(A) OF THE
NATIONAL INTERNAL REVENUE CODE (NIRC) OF 1997, AS AMENDED”

be approved in substitution of House Bill No. 3927 with Representative Hermilando I.
Mandanas as author thereof,

Respectfully submitted,

(RMILANDO I. MANDANAS
Chairman
Committee on Ways and Means

THE HONORABLE SPEAKER
IIOUSE OF REPRESENTATIVES,
QUEZON CITY



R=
Republic of the Philippines
House of Representatives
Quezon City, Metro Manila
FIFTEENTH CONGRESS
First Regular Session

House Bill No. 4361
(in substitution of House Bilf No. 3927)

Introduced by Representative Hermilando |. Mandanas

AN ACT
SIMPLIFYING THE AVAILMENT OF THE GROSS INCOME TAX FOR
CORPORATIONS AMENDING FOR THE PURPOSE SECTION 27 {A)
AND 28 (A} OF THE NATIONAL INTERNAL REVENUE CODE ({NIRC)
OF 1997, AS AMENDED

Be it enacted by the Senate and the House of Representatives of the

Philippines in Congress assembled:

SECTION 1. Section 27 (A) of the National Internal Revenue Code of 1997,
as amended, is hereby further amended to read as follows:
“SEC. 27. Rates of Income Tax on Domestic Corporations. —
“{A) In General, - x x x
Xxx

XxX


20
2
22
23
24
25
26

(Provided, further, That the President, upon the recommendation
of the Secretary of Finance, may, effective January 1, 2000, allow
corporations the option ta be taxed at fifteen percent (15%) of gross
income as defined herein, after the following conditions have been

Satisfied:

“(1) A tax effort of twenty percent (20%) of Gross National Product
(GNP);

“(2) A ratio of forty percent (40%) af income tax collection to total

tax revenues;

“(3} A VAT tax effort of four percent (4%) of GNP; and

"(4) A0.9 percent (0.9%) ratio of the Consolidated Public Sector
Financial Position (CPSFP) to GNP.]

PROVIDED FURTHER, THAT CORPORATIONS HAVE THE OPTION
TO BE TAXED AT EIGHTEEN PERCENT (18%) OF GROSS
INCOME. SUCH ELECTION SHALL BE MADE IN THE BEGINNING
OF THE TAXABLE YEAR BY INFORMATION TO THE
COMMISSIONER OF THE TAXPAYER'S DECISION TO AVAIL OF
THE GROSS INCOME TAXATION. ONCE THE DECISION HAS BEEN
MADE, THE SAME SHALL BE IRREVOCABLE WITHIN THE
TAXABLE YEAR. PROVIDED FURTHERMORE, THAT A
CORPORATION WHICH IS ENTITLED TO AND IS OPTING FOR
GROSS INCOME TAXATION SHALL NOT BE REQUIRED TO
SUBMIT WITH ITS TAX RETURN SUCH FINANCIAL STATEMENTS
OTHERWISE REQUIRED UNDER THIS CODE. SUCH CORPORATE
TAXPAYER SHALL LIKEWISE ENJOY THE BENEFIT OF LAST

2


2

23
24

25

PRIORITY AUDIT. PROVIDED FINALLY, THAT EXCEPT WHEN THE
COMMISSIONER OTHERWISE PERMITS, THE SAID
CORPORATION SHALL KEEP SUCH RECORDS PERTAINING TO
ITS GROSS INCOME AS DEFINED HEREIN DURING THE TAXABLE
YEAR, AS MAY BE REQUIRED BY THE RULES AND REGULATIONS
PROMULGATED BY THE SECRETARY OF FINANCE, UPON
RECOMMENDATION OF THE COMMISSIONER.

[The option to be taxed based on gross income shall be available only
to firms whose ratio of cost of sales to gross sales or receipts from all
sources does not exceed fifly-five percent (55%).}

[The election of the gross income tax option by the corporation shail be
irrevocable for three (3) consecutive taxable years during which the
corporation is qualified under the scheme.}

“For purposes of this Section, the term ‘gross income’ derived from
business shall be equivalent to gross sales iess sales retums,
discounts and allowances and cost of goods sold. 'Cost af goods sold’
shall include all business expenses directly incurred to produce the
merchandise to bring them to their present location and use.

“For a trading or merchandising concem, ‘cost of goods sold’ shalll
include the invoice cost of the goods sold, plus import duties, freight in
transporting the goods to the place where the goods are actually sold,
including insurance while the goods are in transit.

“For a manufacturing concem, ‘cost of goods manufactured and sold’
shall include all costs of production of finished goods, such as raw

materials used, direct labor and manufacturing overhead, freight cost,


20

ai

insurance premiums and other costs incurred to bring the raw materials

to the factory or warehouse.

“In the case of taxpayers engaged in the sale of service, ‘gross income’
means gross receipts less sales retums, allowances [andj discounts
AND COST OF SERVICES. ‘COST OF SERVICES’ SHALL MEAN
Att DIRECT COSTS AND EXPENSES NECESSARILY INCURRED
TO PROVIDE THE SERVICES REQUIRED BY THE CUSTOMERS
AND CLIENTS INCLUDING (A) SALARIES AND EMPLOYEE
BENEFITS OF PERSONNEL CONSULTANTS AND SPECIALISTS
DIRECTLY RENDERING THE SERVICE AND (B) COST oF
FACILITIES DIRECTLY UTILIZED IN PROVIDING THE SERVICE
SUCH AS DEPRECIATION OR RENTAL OF EQUIPMENT USED AND
COST OF SUPPLIES; PROVIDED, HOWEVER, THAT IN THE CASE
OF BANKS, ‘COST OF SERVICES’ SHALL INCLUDE INTEREST

EXPENSE.”

SEC. 2. Section 28(A) of the National Intema] Revenue Code of 1997, as

amended, is hereby further amended to read as follows:

“SEC. 28. Rates of Income Tax on Foreign Corporations. —

“(A) Tax on Resident Foreign Corporations. —

(1) In General, — x x x

Xxx


Provided, however, That a resident foreign corporation shall be granted
the option to be taxed at [fifteen] EIGHTEEN percent [(15%)] (18%) on
gross income under the same conditions, as provided in Section 27

A."

SEC. 3. The Secretary of Finance shall, upon the recommendation of the
Commissioner of Interal Revenue, promulgate the necessary rules and regulations

for the effective implementation of this Act.

SEC. 4. All laws, decrees, executive orders, rules and regulations or parts
hereof which are contrary to or inconsistent with this Act are hereby repealed,

amended or modified accordingly.

SEC. 5. This Act shall take effect fifteen (15) days after its publication in the

Official Gazette or in any two newspapers of general circulation

Approved,


FACT SHEET

4361
HOUSE BILLNO.__* ©
(in substitution of House Bill No. 3927)

AN ACT SIMPLIFYING THE AVAILMENT OF THE GROSS INCOME TAX FOR
CORPORATIONS: AMENDING FOR THE PURPOSE SEC. 27(A) AND 28 (A) OF THE

NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
Introduced by: REP. HERMILANDO |, MANDANAS.

Committee Referral: WAYS AND MEANS
Committee Chairperson: REP, HERMILANDO |, MANDANAS

OBJECTIVES;

To increase revenue collection by Providing additional Option of gross income
taxation for corporate taxpayers,

To simplify the computation of the taxable corporate income.

To reduce the tax examiner's discretion in the determination of the Net taxable
income.

KEY PROVISIONS:

Deletes the conditions before a Corporation can be taxed based on gross income.

Provides corporations the option to avail of gross income taxation regardiess of
their ratio on cost of sales to gross sales or Teceipts.

Deletes the condition for the corporations who wish to avail the gross income for
three (3) consecutive taxable years.

Clarifies the definition of the cost of services in relation to the computation of the
gross income.

Aligns the gross income tax rates with the resident foreign corporation

Dispenses the fequirement of the Submission of tax feturn like financial
statements.

Grants the Privilege of last Priority audit.

RELATED LAW:

Republic Act No. 8424, as amended,


of the Phifippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
First Reguler Session

HOUSE BULL NO. 3927

a nn ae

Introduced by Representative Hermilando |. Mandanas
mm

} : EXPLANATORY NOTE

“This bil seeks to’ amend Section 27 (A) of the National internal Revenue
Code (NIRC) of 1997, as amended, ‘which provides for income tax fates on
domestic corporations. Under the present law, the President may allow the option
fo be taxed based on the gross income upon the recommendation, of te

tax effort of four percent (4%) of GNP; and (4) A 0.9 percent (0.9%) ratio of the
Consolidated Public Sector Financial Position (CPSFP) to GNP. However, the
concurrence of these conditions are hardly attainable.

‘The proposal simplifies comorate income taxation by removing.all of these
unattainable requisites in taxing corporation based. on gross income. This bilt
provides another option on the part of co! rate taxpayers in paying their
jncome. Taxpayers need not substantiate specify all of the allowable
deductions which entail tedious compliance and administration process and is
perceived to be susceptible to abuse or manipulation by both taxpayers and tax
examiners. Every item of expense can be subjected to scrutiny as to whether or
not such is really a necessary or legitimate expense. This situation greatly erodes:
the tax base and consequently reduces the tax take of the goverment.


In consistency with one of the principles of a sound tax system, proper

and efficient administration of the government and its enforcement with the ieest

“inconvenience to the taxpayer will be achieved. With this measure, tax
administratior ‘will be much easier.

Further, areas of discretion are minimized as the tax examiners shail
validate only the accuracy of the taxpayer's declared gross sales/receipts and
cost of goods cold or cost of services. Cost of goods sold are business expenses:
directly incurred to produce merchandise. On the other hand, cost of services are
all direct cost and expenses necessariy incurred to provide services required by
the customers and clients.

Kt would lessen paper work for both the taxpayer and tax examiner a&
substantiation requirement will be significantly reduced. More taxpayers wilt be
encoureged to file their returms. And with more taxpayers, tax collection will
consequently increase. 2

' The gain in terms of improved tax compliance and collection will definitely
contribute to the country’s economic stability.

Hence, approval of this bill is eameatly recommended.

|. HERMILANDO 1. MANDANAS
Second District of Batangas


+ Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session
3327

HOUSE BELNO.

Introduced by Representative Hermitando |. Mandanas

AN ACT
: SIMPLIFYING THE AVAILMENT ‘OF THE GROSS INCOME TAX FOR
i COR MRATIONS AMENOING FOR THE PURPOSE SECT ‘27 (A) OF THE
‘NATIONAL INTERNAL REVENUE CODE (NIRC) OF 1997, AS AMENDED

Be it engcted by the Senate
SECTION 1. Section 27 (A) of the National Intemal Revenue Code of
1997, as amended, is hereby further amended to read as follows:
"SEC. 27. Rates of Income Tax on Domestic Corporations. -
“(A) In General. - xx
xxx
XxX
['Provided, further, That the President, upon the recommendation
‘of the Secretary of Finance, may, effective January 1. 2000, allow
OF the etre tre option to be taxed at ftoan peroent (1570) 8 Se

income as defined herein, after the following conditions have
satisfied:


(NA tax effort ratio of twenty percent (20%) of Gross National
Product (GNP); . .

112) A rato of forty percent (40%) of Income tax collection 89 fe
tax revenues;

(3) AVAT tax effort of four percent {4%) of GNP; and :

“(4) A 0.9 percent (0.9%) ratio of the Consolidated: Public Sector
Financia! Position (CPSFP) to GNP.)

PROVIDED FURTHER, THAT CORPORATIONS HAVE THE
OPTION TO BE TAXED AT EIGHTEEN PERCENT (18%) OF
GROSS INCOME.

The option to be taxed based on gross income shall be avalos
only to firms whose ratio of cost of sales to gross sates OT i
from all ‘sources does not exceed fifty-five percent (55%).

"The election of the gross income tax option by the corporation
shall be irrevocable for three (3) consecutive taxable years during
which the corporation is qualified under the scheme.

“For purposes of this Section, the term ‘gross Income’ derived
from business hall be equivatent to gross sales fess, s8l0e retums,
discounts os llewances and ‘coat of goods sold.” Cost of good
sokd' shall include ait business expenses directly incurred fo
so uso the merchandise to bring them to their present location
and use.

“For a trading or merchandising concem, ‘coat of goods sold shail
include the invoice cost ‘of the goods sold, plus import dudes, freight
in transporting the goods to the place where the goods are actually
sold, including Insurance ‘while the goods are in transit.

“For a manufacturing concern, ‘cost of goods manufactured and
sold’ shail include all costs of production of finished goods. such as
raw materials used, direct jabor and manufacturing overhead,
freight cost, insurance premiums and other costs incurred to bring
the raw materials to the factory or warehouse.

"in the case of taxpayers engeged in the sale of service, ‘gros®
Income’ means gross receipts less sales retums, allowances. [and]
discounts AND COST OF SERVICES. ‘COST OF SERVICES’



SHALL MEAN ALL DIRECT COSTS AND EXPENSES
NECESSARILY INCURRED TO PROVIDE THE SERVICES
REQUIRED BY THE CUSTOMERS AND CLIENTS INCLUDING
(A) SALARIES AND EMPLOYEE BENEFITS OF PERSONNEL,
CONSULTANTS AND SPECIALISTS DIRECTLY RENDERING
THE SERVICE AND (8B) COST OF FACILITIES DIRECTLY
UTILIZED - IN PROVIDING THE SERVICE SUCH AS
DEPRECIATION OR RENTAL OF EQUIPMENT USED AND COST
OF SUPPLIES; PROVIDED, HOWEVER, THAT IN THE CASE OF
BANKS, ‘COST OF SERVIGES' SHAL? INCLUDE INTEREST
EXPENSE.

SEC. 2. Implementing Rules and Regulations. ~ The Secretary of
Finance shall, upon the recommendation of the Commissioner of the Bureau of
intemal Revenue, promulgate the necessary rules and regulations for the
effective implementation of this Act.

SEC. 3, Repeating Clause. — All laws, decrees, executive orders, rules
‘and regulations or parts thereof which are contrary to or inconsistent with this Act
are hereby repealed, amended or modified accordingly.

SEC. 4. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette'or in any two newspapers of general

Approved,


Republic of the Phitippines
House of Representatives
Quezon City, Metro Manila

Fifteenth Congress
First Regutlar Session

MINUTES OF THE MEETING OF THE COMMITTEE ON WAYS AND MEANS

HITED ON MARCEL 2011, 90 AML, KOEANDO ANDAYA TALL,

REPRESENTATIVES, QUEZON CLEY.

HOUSE OF

GUESTS/RESOURCE PERSONS

Mr. Nick Olino
Alty. Erwin Mendinueto

Atty. Juanito Balbastro IIT

Dep. Com'r Gregorio B. Chavez
Dir. Fitomeno Vicencio, Jr.
District Coll, Juan Tan

District Coll, Ricardo Belmonte, Sr.
Mr. Donaldo M. Boo

1. Cam's Fdgardo \taratit

10 Dir. Pstela de Gasnian

I. Asst. See. joy Aragon

12. Atty. Jessci Raci

13. Atty. Jose V. Cabrera

Ma. Victoria Villaluz

. Atty. Rufino Margate, Jr.

16. Dr. Diampo J. Lim

17. Mr, Eduardo Uy

18. Former Sec. Ernesto Ordonez
19, Mr, Mario Jose F. Sereno

20. Mr. Max Cruz

2t. Mr. Ferdie Legaspi

SPN SM Rw

H. CALLTO ORDER

ite mevtias was called te order by Charman Heanilando | Vand

NTRC
Tariff Commission

NSD

DOLE

PEZA

TBP

TMAP

FPI

Phil. Dental Association
FFCCCI

Alyansa Agrikultura

FPL

AISL

Phil. Chamber of Air Express Operators

nats al O13,

am. Upon motion of Rep. Giorgidi B. Aggabao, the roll call and the reading of the
minutes of the previous meeting were dispensed with and the latter was considered
approved. The Committee Secretary proceeded to acknowledge the presence of the

guests and resource persons.


ML CONSIDERATION OF SUBCOMMITTEE REPORT NO. 1 RE: HIB NO, 3992
ied: AN ACE ADOPLING FE SRIPLILIED NEE ENC ONT UAANVHON
ENGAGED IN TRADE/BUSINESS AND/OR
AMENDING FOR THE PURPOSE THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED” by Rep.

Aggabao

AL the outset, Rep. Aggabao presented for consideration Subcommittee Report
No. 1. He manifested that the Subcommittee on Oversight had extensively conducted
three meetings and stakeholders kath from the private sector and public agencies were
Present. The Department of Finance (DOF), Bureau of Internal Revenue (BIR) and
Bureau of Customs (BOC) were also present in those meetings and expressed no
Objection; however, DOF conveyed it still has to submit its position paper. He further

<hatrman Mandanay manifested for the rdord whe Rep. yy eo concuned,
that this measure was passed already in the-14® Congress with sence Modifications
especially on the earmarking of the proceeds.

Dr. Diampo J. Lim of the Phil. Dental Association requested the inclusion of “Bad
Debts” as allowable deduction among professionals as it creates havoc in the finances of
the professionals,

On the query of Chairman Mandanas regarding the accounting method used by
the dentist, Dr. i i

If cash system is used; bad debt is not an issue. He added that legally, in computing

toca faba incon

. Atty, Juanito Balbastro of the Law Division of the BIR agreed with the statement
of the Chair and that under the cash method, income is recorded only when received
and that one has no obligation to record itif income is not received.

The Chair added, on the issue raised bw Dr. Lim, that there is no bad debt and
considering that the dentist used cash basis, the issue of bad debts is irrelevant.

Rep. Aggabao added his thoughts on the issue of bad debts as a deductible item.
He said, bad debts is a gray area normally encountered by the BIR and tax accountants

fan no longer be collected and a judgment call, an area where a lot of abuses come in.
He then added that these are the reasons why the Committes Proposed to simplify the
asation of those individuals engaged in tade/twsiness and/or Practice 6f profession

(odheaman ill the gray areas by listing onl, these that ate allow able dedlac tions,

2


Upon motion of Rep. Aggabao, Chairman Mandanas deferred the consideration
of the Subcommittee Report pending submission of the position paper by. the
Department of Finance,
WR CONSIDERATION OF HB NO. %27 entitled: “AN ACT SIMPI IBVING. THE

AVAILMENT OF THE GROSS INCOME TAX FOR CORPORATIONS
AMENDING FOR THE PURPOSE SECTION 27 (A) ‘OF THE NATIONAL
INTERNAL REVENUE CODE (NIRQ) OF 1997, AS AMENDED” by Rep.
Mandanas

Chairmar Mandanas manifested that the essence of the bill is to give the
Corporate taxpayers the option to pay income tax equivalent to 18% of their gross
income. . :

On the clarificatory question of Mr. Eduardo Uy of the Federation of Filipino
Chinese Chamber of Commerce and Industries, Inc. (FFCCCI), the Chairman replied
that upon the suggestion of the Federation, the Committee took out the limitation on
the ratio of cost of sales to grass sales or grass receipts from all sources and the election
ress Income lay option by the corp nowhich shall be irrevocable fer three (3)
seule taxtble years. -

The Chair added that if it's a corporation engaged in trading business, gross sales
less cost of sales is equal to gross profit x 18%; if it is a corporation in manufacturing,
gross sales less direct cost is equal to gross profit x 18%. If the corporation avails of this
option, said corporation will be last in the priority audit. :

On the query of Rep. Godofredo V. Arquiza, Chairman Mandanas replied that it
is not a revenue generating measure but rather a measure to simplify the availment of
the gross income tax for corporations to avoid areas for corruption.

Given the floor, Atty. Ma. Victoria Villaluz of the Tax Management Association
of the Philippines (TMAP) manifested for the recont that they had submitted to
Pchamiiy Tomes Apacilie tion position paper last Feb. 2.0L. She

+ neutral and in the compilation prescotet, the present
optional standard deduction (OSD) scheme will show that the 30% on the 60% after the
%® OSD is equivalent to 18% of gross income after the cost of goods and cost of sales,
She added that the incentive for the corporation to take this 13% option other than
simplification of tax examination Process is the adoption of a provision “on the last
priority audit”.

The manifestation of Atty. Villaluz that between the OSD and the 18%, the tax is
heutral on the part of the corporation so whether the corporation chooses the OSD os
the 18%, the corporation pays the same amount of tax, brought to Rep. Aggabao’s poiat
which Atty. Villaluz agreed that for a corporate taxpayer to avail of the 18% gross
income taxation inclusion of a provision in the bill that states that corporations whe opt
to avail of the 18% GIT will be audited last.


Rep. Aggabao then echoed that assuming the HB No. 3927 is approved, a
corporation has three options (1) to file income tax using the itemized deduction; (2) to
avail the OSD; and (3) to be taxed at 18% of gross income. .

Or the issue of Jast priority in the audil, Atty. Erwin Mendinueto of BIR
manifested that it is already provided in the law-that the Commissioner of Internal
Pe mas insite Memorantam: Cireetur that vill hetp in the administration,
ssment aad collec Hon of hives whi hile bin aay be sclticient lot ise pany ose,

Rep. Apacible concurred that to avoid areas of discretion that will not benefit
both the government and the taxpayer but only the examiner, it is better that a
provision be put in the. law than in a Memorandum: Circular as an incentive to
corporation. Such a provision will not persuade unscrupulous examiners to examine
corporations who av; of this option. He added that if there is fraud in the
implementation in the availment of the gross income taxation then the BIR can still
question the same considering that it is within the ambit of the authority of the
Commissioner and that the powers of the Commissioner is not unnecessarily hampered
by this provision,

Rep. Aggabao stressed that the taxpayers will still be audited, not a case of no
audit, but just last in the priority audit’ The power of the BIR to investigate the

sorporite fa\pavers with the insertion of sue ht pim isin ty not emasculated

Rep. Apacible as Chairman of the Subcommittee on Oversight duly seconded by
Rep. Aggabao, moved to include a provision that corporations who avail of this option
4s proposed in HB No, 3927 be last in the priority audit. The Chair, there being no
objection, approved the motion.

Chairman Mandanas, upon motion of Rep. Apacible to approve HB No. 3927
duly seconded by Rep. Aggabao, approved the bill with amendments and subject to
style. He then instructed that a Committee Report be prepared and filed accordingly.

V. UPDATE ON HB NO. 3224 AND 3760 re: CUSTOMS & TARIFF
MODERNIZATION ACT by Rep. Reynaldo V. Umali

dhe Chan miantestedl that Uhe Chyir the TWO. Rep. Umalé sas net around
But he bad talked aligady wath tim. Hee hocd that there is argency a peostny, the
amendment with the Tariff and Customs Code; however, considering the House Bills
filed regarding the matter and the consequences of the amendments being proposed
there is really a need for ful: deliberation and an in-depth study. He said, he had
advised the TWG and the Subcom to divide the issues by: 1. amending the Tariff and
Customs Code to compry with the Revised Kioto Convention; and 2. coming-up with a
separate bill on anti-smuggting.



Former Secretary Emesto Ordonez manifested that he had just submitted the
position paper of the Alyansa Agrikultura hich is backed by the Federation af Pilipino
Industries (FPD. He then expressed his concerns on the passage of the bill on CEMA
and support to the manifestation of the Chair that the bill on Anti-smaggling be given
top priority

Mr. Mario Jose E. Sereno of the FPL supported the position mentioned and
emphasized that to address the P300 billion deficit, the bill on anti-smuggling will
adress the deficit and plug the leakages in tax collection. He then requested the
Prmorittes te approve the bilhee anti sane

Ihe Chair then informed the body that the merits and demerits of the bill will be
discussed in a separate meeting,

Vi. AUTOMATIC REFERRALS from the Commitiee on Higher and Technical
Education:

1. Unnumbered Substitute to HB No, 1504 re: Granting Discounts on Basic
and Education Servives to Underprivileged Students in the Post-Secondary
and Tertiary Levels - Upon motion of Rep. Arnaiz duly seconded by Rep.
Aggabao, there being no objection, Chairman Mandanas approved the tax
provision of the unnumbered substitute bill.

2. Unnumbcred Substitute to HB No. 835, 1660 & 400 re: Open Lea ng, and
Distance Tducation Actoot 21H - | Aretion Of Rep. Sie duly
seconded by Rep. \jaeible, thers bung ae objection, Chanmian ‘slandanas

approved the tax provision of the unnumbered substitute bill with
amendments and subject to style.

VIL ADJOURNMENT

The Chairman, upon motion of Rep. George P. Arnaiz, adjourned the meeting at
10:37 am.

Fommilice Secretary
Approved by
HERMILANDO I MANDANAS

Chairman
Committee on Ways and Means

os