With all due respect and in deference to the Honorable Commission [COA], we keep that the availability in SC [Service Contract] 38 pointing out that the income tax of the contractor shall form a part of the authorities percentage is in accordance with the express provision of PD 87, as amended by means of PD 1459,” Cusi stated.
DOE director for legal department Arthus Tenazas, for his component, said the COA’s choice “is an undue interference [on] the powers of the DOE to administer and enforce Presidential Decree 87 and Presidential Decree 1459 and definitely overstepped and surpassed the criminal bounds of COA’s constitutionally mandated functions tantamount to a gross abuse of discretion.”
He said the DOE asserts that the 60 percentage share of the authorities inclusive of income tax has legal foundation in the following provisions of the law: Section 12 of PD 87 (a) which states that “the contractor is exempt from all taxes except profits tax.”
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