GMA's Annette Gozon Wants to Copy ABS-CBN Tax Strategy
Sometimes, stories don’t come from the social media posts themselves, but from the comments section.
On Saturday (May 9), Facebook user Willy Ramasola posted a lengthy status on his Facebook wall detailing his “discovery” of what he believes is a way for ABS-CBN to have saved on paying its taxes.
According to Ramasola, who cited ABS-CBN’s financial statements submitted to the Securities and Exchange Commission, the broadcast network declared a net loss of P432 million against revenues of P22.7 billion in 2018. However, the network was still able to report a net income in P1.9 billion thanks to dividends from a little-known subsidiary called Big Dipper.
One hundred percent owned by ABS-CBN, Big Dipper Digital Content and Design is an information technology (IT) enterprise registered with the Philippine Economic Zone Authority (PEZA), and as such, is entitled to an income tax rate of five percent.
But according to Ramasola, the P2.2 billion in dividend income Big Dipper contributed to ABS-CBN’s total dividend income for 2018 of P2.9 billion is tax free because “based on our National Internal Revenue Code, inter-corporate dividends, or dividends received by a domestic corporation from another domestic corporation shall not be subject to tax.”
All this attracted the attention of Annette Gozon-Valdes, who couldn’t help posting in the comments section, “Oh, baka GMA can copy this too to avoid paying taxes hehe.”
She later on followed-up her reply with “Seriously though. Maybe you have some auditor fb friends that can give their opinion? Pasado naman kasi ang scheme na ito sa auditor nila (This scheme seems like it’s okay with their auditor).”
Valdes also posted screenshots of an article entitled How A PEZA-Accreditation Can Benefit Your Business in the comments.
Whether Valdes’s comment was intended to be just a joke is anybody’s guess, but it’s worth noting that her father’s network paid significantly higher taxes than ABS-CBN, at least in the last couple of years.
Based on available financial records, the Kapuso network paid just a little over P1 billion in taxes compared to ABS-CBN’s P421 million in 2017.
In 2018, GMA remitted P928 million in taxes compared to ABS-CBN’s P84 million.
ABS-CBN was forced to stop broadcasting last week after a cease-and-desist order from the National Telecommunications Commission. The NTC cited the expiration of the network's congressional license to operate for the order.