Thread by @ANCALERTS

ABS-CBN Chairman Mark Lopez, COO for Broadcast Cory Vidanes present at the House hearing on the #ABSCBNfranchise. President & CEO Carlo Katigbak is present via Zoom.

Rep. Micaela Violago makes a manifestation: 15 broadcast companies continue to operate in the country even though their franchises have expired. #ABSCBNfranchise

Lani Caimol, ABS-CBN Holdings: Documents submitted to Congress are authentic, true & correct. #ABSCBNfranchise

Rep. Elpidio Barzaga questions ABS-CBN representatives about the company's alleged tax violations. #ABSCBNfranchise

Caimol: Dividend income lang po ang income ng ABS-CBN Holdings. #ABSCBNfranchise

Barzaga: Pero meron kayong net loss?

Caimol: Opo.

Barzaga: Ito lang ang company na walang income pero may net loss. #ABSCBNfranchise

BIR: May transaction tax po siya 'pag dumaan sa Philippine Stock Exchange. #ABSCBNfranchise

Taxes paid and remitted by ABS-CBN for 2016-2019 being presented at the House panel hearing on #ABSCBNfranchise

Rep. Barzaga: Kayo ba ay nagbabayad ng local franchise tax based on city ordinance and SC decision?

ABS-CBN legal: Nagbabayad po.
#ABSCBNfranchise

Rep. Rolando Valeriano inquires about Big Dipper, an ABS-CBN subsidiary #ABSCBNfranchise

Valeriano asks if ABS-CBN enjoys tax-free imported equipment by using imported equipment by Big Dipper which is exempt from duties and taxes because it is accredited by PEZA.#ABSCBNfranchise

ABS-CBN's Atty. Cerrado: The equipment of Big Dipper is used solely for services offered by Big Dipper to its clients. It so happened that ABS-CBN is a client of Big Dipper. But none of Big Dipper assets are actually used by ABS-CBN on any of its production of content.

Valeriano: Unconditional po ba ang pagiging tax- and duty-free ng imported equipment?

PEZA: As long as equipment are used inside the economic zone. We have zone managers, who visits and inspects regularly the on-goings of out IT enterprises and other export companies

Rep. France Castro: Mismong BIR ang nagsasabing ang ABS-CBN ay hindi naman deliquent at sila ay nagbabayad ng buwis nang tama. Bukod dito, nakakatulong pa sila sa mga mamamayan through the foundation #ABSCBNfranchise

ABS-CBN's Atty. Aldrin Cerrado: Walang transaction na ginagamit ng ABS-CBN Corp. ang Foundation.

Rep. Carlos Zarate: So yung transaction between ABS-CBN Corp at yung ABS-CBN Foundation ay purely nagdo-donate ang korporasyon sa foundation. At itong donations is treated as taxable or exempt from taxes?

ABS-CBN's Cerrado: Donations made by ABS-CBN Corp to the Foundation is not subject to the donor's tax by virtue of the foundation being accredited by the Philippine Council for NGO Certification and registered by BIR

Zarate on ABS-CBN's looming retrenchment by August: Hindi lang ito kawalan ng trabaho, dagdag-kawalan din ng buwis ito dahil ang mga manggagawa na matatanggal ay di na rin makakabayad ng income tax. So hindi lang taxes mula sa ABS-CBN, kundi taxes din ng mga apektadong manggagawa

Zarate: BIR na ang nagsabi na sa kasalukuyan, walang delinquency ang ABS-CBN. There were investigations in the past, there were compromises made, and out of those compromises ay nabayaran na ang mga dapat bayaran. #ABSCBNfranchise

Zarate: Pinapayagan naman sa batas na i-contest ang pagbabayad ng buwis hanggang magkaroon ng compromise. #ABSCBNfranchise

Zarate: Hindi rin ipinagbabawal sa kaayusan ngayon na magkaroon ng subsidiaries #ABSCBNfranchise

Rep. Marcoleta: Ano po ang pinroduce ng Big Dipper na for export?

PEZA: Big Dipper is essentialy producing services, which is the same case for other PEZA-registered IT and BPO companies
#ABSCBNfranchise

Marcoleta: Are you sure Big Dipper is producing services for export? Did you bother to check what they do?

PEZA: Based on their registered activity, they are engaged in digital archiving.
#ABSCBNfranchise

Marcoleta: Ano pong produktong ine-export niya?

PEZA: The export is in the payment of services in converting analog material into digital format
#ABSCBNfranchise

PEZA earlier said to be PEZA-accredited the company must be export-oriented.

Marcoleta points out that Big Dipper only has one foreign client, ABS-CBN Global Hungary, which is also a 100% ABS-CBN subsidiary

PEZA said it is foreign company because it is registered overseas

Citing discrepancy in ABS-CBN's year to year consolidate financial statements and parent company financial statement, Rep. Marcoleta claims the network got away with some P186-B worth of taxes for years by using subsidiaries such as Big Dipper, and other tax shields.

ABS-CBN legal: Each company in the consolidated financial statement prepare their own standalone financial statements, own standalone income tax return and paid their respective taxes based on the financial statement and ITR prepared.
#ABSCBNfranchise

ABS-CBN legal: ...yung taxes po sa consolidated financial statements cannot be based on consolidated net income because this is a combination of independent operations of each company that prepare their own financial statements and income tax return.
#ABSCBNfranchise

Marcoleta questions why Studio 23 used ABS-CBN logo, when it was airing on AMCARA frequency.

Marcoleta cites TAPE's "Eat Bulaga" which uses GMA logo because it is broadcasting on GMA frequency

Rep. Alfredo Garbin Jr.: Mayroon ba kayo base sa inyong imbestigasyon or any findings na magsasabi na yung Big Dipper is being used as element for tax evasion that favors ABS-CBN

BIR:As far as tax payments by Big Dipper, I think they are more or less paying their taxes correctly

PEZA says Big Dipper has reported US$27.7-M in export revenues for 2016 alone

Garbin: Ano ang social contribution ng Big Dipper as locator sa ating bansa at sa PEZA?

PEZA: We consider them as pioneer because of the technology. They are among those who introduced the new technology in digital platform

Garbin asks BIR: In all those instances na in-audit at chineck niyo ang ABS-CBN, sila po ba ay nakasuhan na o na-convict na of tax evasion?
#ABSCBNfranchise

BIR: During the course of our investigations, several violations or wrong interpretations of laws were committed by ABS-CBN Corp. But those violations were all settled and paid by ABS-CBN Corp.
#ABSCBNfranchise

Big Dipper total revenues and percentage of foreign revenues, according to ABS-CBN legal:
2016 - P2.62 B - 51%
2017 - P2.67 B -54%
2018 - 2.68 B - 54%

PEZA requires its accredited companies to earn at least 50% from exports
#ABSCBNfranchise

Rep. Remulla before beginning interpellation: I'd like to apologize for earlier incident na ako po ay may isinusulat na note habang naka-flag ceremony tayo. As usual, ABS-CBN people are playing it up now on social media, but I will forgive them.

Remulla: Hindi po excuse ito but something went into my mind for the questions I will ask tonight. Ako ay humihingi ng dispensa sa ating mga kababayan.

Remulla asks if ABS-CBN Foundation issues tax credits to its donor

ABS-CBN Foundation clarifies that it issues certificates of donation to donors which they may use as a tax deductible

ABS-CBN Foundation says it owns 780,995 ABS-CBN Corp. shares equivalent to P11-M

ABS-CBN legal says ABS-CBN Corp. has donated P129-M from 2015-2019
#ABSCBNfranchise

Remulla: So kapag nagdo-donate po kayo sa Foundation or sa charity, 'yan po ay deductible expense?

ABS-CBN: Tama po

Remulla: Hindi po totoong puso-puso lang yan, yan ay may business sense na nakakatulong sa inyong kumpanya kapag kayo ay nagdo-donate ng pera sa mga foundation

ABS-CBN Chairman Mark Lopez: On our donations, tax credit is not the motivation... And it is also allowed.

Remulla on business between Big Dipper and other ABS-CBN subsidiaries: This is a transaction between one ABS-CBN corporation to the other ABS-CBN corporation for P15-B for the past 10 years

ABS-CBN CFO: Yes, your honor. And it's not illegal or unusual

Remulla: Wala naman akong sinabi na illegal. Baket mo sinabing not illegal and unusual?

ABS-CBN CFO: Just to clarify, because some people might think otherwise

Remulla: Although it sounds that way, I didn't do anything, pero kung ganoon ang tunog sa Pilipino kung tatanungin, baket yung laman ng kaliwang bulsa ay inililipat sa kabilang bulsa?

ABS-CBN President and CEO Carlo Katigbak: I got a message from our all cameramen insisting that none of them were responsible for taking the video you referred to earlier. (1/2)

Katigbak: And I also checked with our news team, they have all said that we have not run that video on any of our platforms po. (2/2)

Katigbak: We decided to divest from Amcara because we didn't feel there was any value to owning 49%. The relationship between ABS-CBN and Amcara is a block time relationship and as a block timer, there's no point in having 49% stake in the company we are blocktiming from

Remulla: Ito ba ang backup plan para kung kayo ay hindi makakuha ng prangkisa ay makakaere pa rin kayo? Itong Amcara ang backup plan?

Katigbak: It's just another way to reach more areas using TVplus

[Amcara's 25-yr broadcast franchise will be expiring this month, July 2020]

Rep. Zarate interjects, says House hearing is now on alleged tax violations and discussion on TV plus, which covers blocktime agreement, has ended already

Remulla: Ang Amcara ang ginagawang lifeline ngayon ng ABS-CBN at ang claim nila ay blocktime agreement. They are suspected to be lying under oath to this committee... (1/2)
#ABSCBNfranchise

Remulla on blocktime agreement between Amcara and ABS-CBN: This is a violation of Amcara's franchise and it is affront to Congress that ABS-CBN did not even seek the House's permission to utilize Amcara as usufruct, yan po ang ating impression (2/2)
#ABSCBNfranchise

"Parang nabudol-budol ang Republika," says Rep. Defensor as he asks how come ABS-CBN only paid some P1.4-B income tax from 2016-2019, when GMA paid almost the same amount in 2018 alone.

ABS-CBN legal clarifies that Big Dipper is not in the business of distribution, it specializes in digitization and repurposing of content

ABS-CBN legal on allegation that Big Dipper was created as the network's tax shield: ABS-CBN does not need to create Big Dipper in order to register its activities in the eco-zone. The business (that Big Dipper is engaged with) may be pursued as a unit under the ABS-CBN ... (1/2)

ABS-CBN legal: ... and that particular activity may be registered under PEZA, and after approval, it can avail of tax incentives (2/2)

Rep. Defensor asks why not just do that, why create Big Dipper.

ABS-CBN legal explains it was largely because of "administrative convenience"

Defensor: Meaning to say... baka magkaproblema kayo sa pagbabayad ng tax?

ABS-CBN legal: Hindi naman, your honor.

Defensor: Eh bakit hindi niyo ginawa?

ABS-CBN legal: It's an option given to us under the law. Teh choice of business structure is given to the businesses.

Defensor: ABS-CBN ay hindi lang isang station, may pagtingin po sa inyo, may pagkilala. Kayo po mismo ang nagsabi na "in the service of the Filipino people," the thinking is "we will pursue this even if it's a higher tax for the country, sige tulong na lang kami."

Defensor: But I understand na from the point of business, you get the best lawyers, the best finance managers to lessen the costs. Sana nga lang, in the future, baka pwedeng ayusin natin ng kaunti para yung bulk mapunta naman sa bansa.

Defensor: Kasi malaki naman ang binabarayan niyo, pero malaki rin kayong korporasyon. So yun ang aking binabanggit sa budol-budol. Wala namang iligal, pero mukhang nabudol-budol lang po.

House panel hearing on #ABSCBNfranchise application suspended until 1 p.m., Thursday, July 2.

House to tackle ABS-CBN's alleged violations of its public duty by engaging on biased reporting and meddling in politics.