Aquino to look into tax on ‘peace bonds’

MANILA, Philippines—President Benigno Aquino said Tuesday he will look into the request of  some banks to stop the Bureau of Internal Revenue  from imposing a 20-percent withholding tax on the maturing and supposedly tax-free “PEACe bonds.”

The President said he would meet with Finance Secretary Cesar Purisima and Revenue Commissioner Kim Henares to discuss the request of several of the country’s top banks to stop the BIR’s collection of as much as P5 billion in taxes from the Poverty Eradication and Alleviation Certificate (PEACe bonds).

“We will then review this specifically to address the complaints of those who undertook the PEACe bonds,” Aquino told reporters.

Aquino  said he would also meet with members of the nongovernmental organization community “who benefited” from the PEACe bonds and that he would talk  to some of them “within the week.”

But the President said that  there were rulings by the BIR in 2004 that the PEACe bonds were subject to the withholding tax.

The banks have asked the Supreme Court to issue a temporary restraining order as well as a permanent injunction on the withholding tax on the PEACe bonds.

They accused the BIR of “grave abuse of discretion amounting to lack or excess of jurisdiction” when it issued a ruling last October 7 which said the PEACe bonds maturing on Tuesday  were subject to a 20-percent withholding tax.