Philam Life tax issues stall Philplans expansion

Ted P. Torres (The Philippine Star) - November 9, 2014 - 12:00am

MANILA, Philippines - The unresolved tax issues involving Philippine American Life and General Insurance Co. have been affecting the expansion plans of Philplans First Inc., a top company official said.

Philplans chairman Monico Jacob said without the resolution and subsequent tax payments by Philam Life to the Bureau of Internal Revenue (BIR), the tax clearances needed to register the sale of Philam Plans and Philhealthcare could not be obtained.

The Tanco Groups’ Philplans acquired Philam Plans and Philhealthcare from Philam Life in 2009.

However, the BIR has not released the certificate authorizing registration (CAR) due to certain tax issue. Without the CAR, interested local and foreign investors of Philplans have remained on the sidelines.

All business arrangements and payments between Philam Life and the Tanco Group in relation to the sale through an auction have been long resolved, except for the CAR issue.

In fact, Philplans, now the leading pre-need company, was formed from the acquisition exercise.

“The Tanco Group has suffered due to the five-year delay. Corporate integrity is an issue here,” Jacob said in a statement.

Meanwhile, the AIA Group Ltd. and subsidiary Philam Life said in a joint statement that the issue of tax obligations “is a matter we have presented to the courts following advice from our legal counsel.”

“The matter before the courts is the amount of the BIR assessment related to that transaction.  Since this is a matter before the court, we are not able to go into the basis for that appeal, but we can say that we will fully abide by the decision of the court regarding that action.  This is an action that is not uncommon in such transactions and one that is consistent with our fiduciary responsibility to our shareholders,” the AIA/Philam Life statement said.

Philam Life has appealed its tax case to the pertinent courts and is still subject to deliberations. The insurer, however, refused to discuss the matter beyond the statement as it is in the sala of the jurisprudence.

The statement further read: “This is a matter that will be resolved as soon as the court has made a decision on the appeal.  In the meantime, as always, we will continue to honor all obligations to all of our stakeholders and to comply fully with our fiscal obligations.”

On the sale of its subsidiaries in 2009, it said: “Philplans First Inc. is aware of the status of this matter because the management of that company and their legal counsel have been kept apprised of these developments as the discussions with the BIR have been carried out.”

“The discussions between our company and BIR have no impact on the sale of our subsidiaries or their ability to operate them as they see fit as the full beneficial owner.”

The Tanco conglomerate includes the STI Education Systems Holdings (STI Education Services group, STI Colleges and Education Centers, iAcademy, and De Los Santos College-STI College of Health Professionals); and STI Investments (PhilPlans, PhilCare and Philippine Life Financial Assurance Corp.). Its other major business interests are Asian Terminals Inc., Philippine Women’s University (PWU) and Jose Abad Santos Memorial School (JASMS).

Philam Life is one of the largest life insurance and financial institutions in the country, while AIA Inc. is one of the largest financial and insurance institutions in the Asia Pacific region.

 

ASIA PACIFIC ASIAN TERMINALS INC BUREAU OF INTERNAL REVENUE COLLEGE OF HEALTH PROFESSIONALS LIFE PHILAM PHILAM LIFE PHILAM PLANS AND PHILHEALTHCARE PHILPLANS PHILPLANS FIRST INC
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