It also has criminal basis beneath Section 18 (b) of PD 87, which states that: “Provided, finally,” to quote: “That in no case shall the annual net sales proportion of the authorities, which include all taxes paid through or on behalf of the contractor, be less than 60 percentage of the difference among the gross income and the sum of the operating cost and Filipino participation incentive.”
“So it’s far very clear in the law that the 60 percentage share of the authorities may also consist of all income paid by way of the contractor. Considering that the contractor is exempt from all taxes except profits tax, the taxes that [are] cited under Section 18 of the law, PD 87, refers to income tax,” Tenezas said.
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