GOCCs asked to hike dividend remittance

MANILA, Philippines – The National Government wants more revenues from state corporations.

The Department of Finance said yesterday it revised the implementing rules and regulations (IRR) of Republic Act 7656 regulating dividends remitted by government-owned and -controlled corporations (GOCCs).

Included in the revisions is the raising to “more than 50 percent” of annual net earnings the dividends GOCCs should contribute to the government.

This will apply “in the event the GOCC has excess cash or windfall earnings,” provided its viability will not be eroded once it makes higher remittances.

Previously, GOCCs and government financial institutions remit half of their yearly earnings as cash, stock, or property dividends to state coffers.

Sought for details, Finance Assistant Secretary Ma. Teresa Habitan said revenue windfall would be determined through the GOCCs’ corporate income tax returns filed with the Bureau of Internal Revenue (BIR).

“The real concept of windfall is it is a one-off event. So, for instance, a GOCC which bid out a property will have additional revenues on its books,” Habitan said in a phone interview.

“The 50-percent is just the minimum. Under the law, we can actually ask them to increase it,” she added.

The revised IRR also mandates GOCCs to make full payments to the government “on or before May 15 of each year” or a month after the deadline of income tax filing.

Prior to this, Habitan said GOCCs are just required to make settlements “within the first quarter.”

“There was confusion before as to where dividend computations will be based. This only simplifies it,” she clarified.

The DOF regulates GOCCs’ financial operations. The Governance Commission on GOCCs (GCG), meanwhile, oversees the over-all management of state firms.

The GCG was created under RA 10149, enacted in 2011, after President Aquino blasted some GOCC officials for their huge bonuses despite poor performance.