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News Report

Auxtero, Clark

Castillo, Mannelie

Misa, Rica Jane

Ortega, Christian Jay

Rapsing, Sherry Joy

Sabandal, Shimena Mae

9:00-10:30 am TTH
Cebu City seeks service provider for garbage collection
Augist 27, 2018

AS soon as it can publish its invitation to bid, the Cebu City Government can start accepting interested
service providers from whom it can lease the heavy equipment needed for garbage collection.

The City has allocated some P47 million to rent 21 heavy equipment that will be used to collect trash
from Sept. 8 to Dec. 31.

The amount forms part of the recently approved second 2018 supplemental budget of P66.4 million.

In an interview, Department of General Services head Ronald Malacora said the invitation to bid will be
published within the week. “Open to interested bidders na within the week. Otherwise, di mahuman og
dali (it might not get done right away),” he said.

The public bidding will be conducted through open competitive bidding procedures using a non-
discretionary “pass/fail” criterion as specified in the Revised Implementing Rules and Regulations (IRR)
of Republic Act 9184, otherwise known as the Government Procurement Reform Act.

Since last January, the City Government has been paying Pasajero Motors Corp. (Pamocor) around P65.5
million for the rental of trucks that are operating for 24 hours. The trucks are leased to haul garbage and
deliver it to the transfer station.

The City is paying P678 an hour for every truck. This includes fuel, driver’s salary and vehicle
maintenance.

Since Pamocor’s contract will end this month, the City Government will have to look for another service
provider.

But after the election of Kasambagan Barangay Captain Franklyn Ong as president of the Association of
Barangay Councils, Pamocor might no longer join the City’s public bidding. AS soon as it can publish its
invitation to bid, the Cebu City Government can start accepting interested service providers from whom
it can lease the heavy equipment needed for garbage collection.

The City has allocated some P47 million to rent 21 heavy equipment that will be used to collect trash
from Sept. 8 to Dec. 31.

The amount forms part of the recently approved second 2018 supplemental budget of P66.4 million.

In an interview, Department of General Services head Ronald Malacora said the invitation to bid will be
published within the week. “Open to interested bidders na within the week. Otherwise, di mahuman og
dali (it might not get done right away),” he said.

The public bidding will be conducted through open competitive bidding procedures using a non-
discretionary “pass/fail” criterion as specified in the Revised Implementing Rules and Regulations (IRR)
of Republic Act 9184, otherwise known as the Government Procurement Reform Act.

Since last January, the City Government has been paying Pasajero Motors Corp. (Pamocor) around P65.5
million for the rental of trucks that are operating for 24 hours. The trucks are leased to haul garbage and
deliver it to the transfer station.

The City is paying P678 an hour for every truck. This includes fuel, driver’s salary and vehicle
maintenance.

Since Pamocor’s contract will end this month, the City Government will have to look for another service
provider.

But after the election of Kasambagan Barangay Captain Franklyn Ong as president of the Association of
Barangay Councils, Pamocor might no longer join the City’s public bidding. (RTF)

https://www.sunstar.com.ph/article/1760084/Cebu/Local-News/Cebu-City-seeks-service-provider-for-
garbage-collection
TESDA chief grateful for COA report on 'ghost
scholars'
By Ma. Cristina Arayata August 24, 2018

MANILA -- Technical Education and Skills Development Authority (TESDA) Secretary Guiling
Mamondiong said he is grateful for the Commission on Audit (COA) report that says the agency had
spent millions for "ghost scholars."

"I am thankful for this report, because this serves as warning to our officials and partners against
corruption and other wrongdoings," Mamondiong told the Philippine News Agency (PNA) on Friday.

The supposed "ghost scholars" anomalies occurred in the past administration.

This week, reports on the COA audit report involving TESDA scholars surfaced.

According to the audit report, TESDA paid PHP9.3 million for JAVA and Software Development NC IV
training for 310 scholars, and PHP1.47 million for 270 scholars enrolled in Barista NC ll and Bartending
NC ll courses at the AMA Computer College (AMACC) Manila Campus and Technivoc Institute Corp. (TIC).

Mamondiong said AMACC had already refunded the money, amounting to about PHP10 million.

"AMACC refunded this a day before I assumed the office last July 13, 2016. They (AMACC) have already
returned the last centavo," he clarified.

The COA is aware about the refund, he said, and added that TESDA is still investigating the incident
involving the TIC.

The TESDA chief noted that his office has been doing different ways to fight corruption and avoid "ghost
scholars."

"Before I assumed office, there were many people who told me that TESDA has lots of problems. I sent a
National Technical Audit team to all our training centers," he said.

Since the COA report involved incidents that happened during the past administration, Mamondiong
said he has no plan to question former TESDA chief Irene Isaac.

"She was a presidential appointee. I think it would be improper for me to question her regarding this
matter," Mamondiong said. (PNA)

http://www.pna.gov.ph/articles/1045925
Proposed rules would curb avoidance of SALT
deduction limit
By Sally P. Schreiber, J.D.
August 25, 2018

Under proposed regulations issued by the IRS on Thursday, transfers to a state agency or charitable
organization in lieu of paying state and local taxes would be deductible as a charitable contribution
only to the extent that the taxpayer making the donation did not receive a quid pro quo (REG-
112176-18). Contributions that result in a state or local tax credit in return for the contribution
would not be deductible for federal tax purposes to the extent of the credit; however, contributions
that result in a state or local tax deduction may be deductible for federal tax purposes.

A number of states have enacted or are considering enacting programs that allow residents to make
contributions to state agencies or charitable organizations in exchange for state and local tax
credits. These programs are designed to allow individual taxpayers to claim charitable contribution
deductions that are not subject to the new $10,000 limit on the deductibility of state and local taxes
under P.L. 115-97, the law known as the Tax Cuts and Jobs Act (TCJA). In New York, for example,
local governments and school districts can create charitable funds and offer donors a property tax
credit. New York has also created a state charitable gifts trust fund, which permits taxpayers to
make contributions for health care or education in return for a state tax credit (donors would also,
presumably, attempt to take a federal charitable contribution deduction) (2018 N.Y. S.B. 7509, ch.
59). In New Jersey, taxpayers can make donations to municipal or school charitable funds and
receive property tax credits (2018 N.J. S.B. 1893).

The proposed rules outline the history of the IRS’s and courts’ positions on whether a donor has
received something of value in return for the charitable contribution, in which case the deduction
under Sec. 170 must be reduced or eliminated. The IRS also discusses the rulings it has issued in this
area permitting these deductions in certain cases (see, e.g., Chief Counsel Advice 201105010) and
explains that the fact that taxpayers making these donations can now reduce their federal tax
liability requires it to revisit the issue. The Service also notes that permitting the deduction would
greatly reduce the amount of revenue the federal government would collect from taxpayers
avoiding the $10,000 limitation.

To achieve the goals of prohibiting charitable contribution deductions when a taxpayer is receiving
a benefit in return, the proposed regulations provide that if a taxpayer makes a payment or
transfers property to or for the use of an entity listed in Sec. 170(c), and the taxpayer receives or
expects to receive a state or local tax credit in return for that payment, then the tax credit
constitutes a benefit, or quid pro quo, to the taxpayer, and the taxpayer must reduce his or her
deduction for the charitable contribution by the amount of the state or local tax credit received or
expected to be received.

However, the proposed rules allow a charitable contribution deduction if the state program allows
dollar-for-dollar state or local tax deductions instead of credits. The IRS reasoned that even though
deductions could also be considered quid pro quo benefits, sound policy considerations and
efficient tax administration support making an exception to quid pro quo principles for dollar-for-
dollar state or local tax deductions. Because the benefit of a dollar-for-dollar deduction is limited to
the taxpayer’s state and local marginal rate, the risk of deductions being used to circumvent the
$10,000 limitation is comparatively low. In addition, if state and local tax deductions for charitable
contributions were treated as quid pro quo benefits, it would make it difficult for taxpayers to
accurately calculate their state and local taxes and federal taxes.

The proposed rules also contain a de minimis exception from the prohibition of a deduction for
state and local tax credits. Under this rule, a taxpayer may disregard a state or local tax credit if the
credit does not exceed 15% of the taxpayer’s payment or 15% of the fair market value of the
property the taxpayer transferred. This exception reflects that the combined value of a state and
local tax deduction, that is the combined top marginal state and local tax rate, currently does not
exceed 15%.

The proposed regulations apply to taxpayers making contributions to state tax credit program
created after the TCJA as well as preexisting state tax credit programs created before the TCJA. The
regulations are proposed to apply to contributions after Aug. 27, 2018.

The IRS is requesting comments on all aspects of the proposed rules within 45 days after their
publication in the Federal Register (scheduled for Monday, Aug. 27) and is planning to hold a public
hearing on Nov. 5 in Washington.

— Sally P. Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor.

www.journalofaccountancy.com/news/2018/aug/state-local-tax-credits-charitable-contributions-
201819604