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COCKTALES | PAL battles ex-partner Emirates for Dubai route with 50% promo fare means BUSINESS

Flag carrier Philippine Airlines will challenge its former code-share partner Emirates by slashing 50 percent off the introductory economy and business class fares for the busy Manila-Dubai route.

PAL will start daily bi-class flights to the financial capital of the United Arab Emirates on June 15, the first of the seven Middle Eastern routes that the flag carrier is relaunching with direct flights with improved economy and lie-flat business class seats.

A popular travel fare aggregator,, listed PAL's lowest roundtrip fare at about $520, against Emirates' $820, for a Manila-Dubai-Manila economy passage, leaving on June 15and returning on July 15.

That represents a remarkable 57 percent price difference.

The variance is starker in absolute amounts for the more profitable business class segment.

Skyscanner was yesterday quoting four other web-based travel agencies each offering under $1,000 for the PAL business class passage, as against the nearly $2,100 being charged by Emirates for the same route during the same travel dates.

PAL is currently fielding three flights a week to Dubai, as against the two daily and four weekly flights, or a total of 18 frequencies a week, offered by Emirates, its code-share partner for the same route until 2014.

When it switches to the reconfigured Airbus A330s for the Middle East routes, PAL's economy seat width will be increased to 17 inches while the pitch, the distance between the two rows that serves as an indication of the legroom, will be widened to 32 inches.

Those two incremental changes will shift PAL's economy seats to the same class metrics of the award-winning Emirates.

And like Emirates, PAL's economy class seats will have individual audio-video monitors, USB ports and power charges, in addition to the in-flight wifi service.

Besides PAL and Emirates, low-cost carrier Cebu Pacific also flies Manila to Dubai non-stop, offering one daily return service for the more budget-conscious market segment.

For the same travel dates, the Cebu Pacific website was yesterday quoting a P19,581.54 lowest return fare, with no check-in baggage, no-meal option for the nine-and-a-half-hour flight duration.

Two taipans overcome tax tussles with BIR

Taipans Lucio Tan and George Ty have won their little-known tax battles with former BIR Commissioner Kim Jacinto-Henares and Finance Secretary Cesar Purisima.

Ty's Toyota Motors was being pursued by the Bureau of Internal Revenue for over P242 million in alleged royalty tax deficiency, while Tan's Northern Tobacco Redrying Co. was being chased by the tax agency for P90 million in income tax.

According to court records, Henares rejected Toyota Motors' defense that it was not liable for the P242 million royalty taxes in 2009 since its automotive imports from Japan and Thailand were covered by preferential tax treaties with those two countries.

Toyota appealed to Purisima, who in turn upheld Henares, as Toyota had been late in filing the application for tax treaty relief.

But the Court of Tax Appeals, in a ruling released last week, said the finance department's denial of the tax relief just because Toyota had failed to apply within the prescribed period "would impair the value of a tax treaty."

"The obligation to comply with a tax treaty must take precedence over" additional BIR regulations, said CTA Associate Justices Juanito Castaneda Jr., Caesar Casanova and Catherine Manahan, citing a 2013 Supreme Court decision as they voted to overturn Purisima and Henares.

In Tan's case, three other justices -- Lovell Bautista, Esperanza Fabon-Victorino and Ma. Belen Ringpis-Liban -- rejected the P90 million tax imposition on a 2010 swap, where Northern Tobacco properties in Vigan, Ilocos Sur were exchanged for shares of stock of Fortune Landequities and Resources, another Tan company.

The tax appellate court ruled that the property-share swap was a tax-free transaction, contrary to the BIR position that the exchange needed a prior certification from the tax agency to enjoy the tax benefit.

"There is nothing explicitly requiring a party, in exchanging property for shares of stocks, to first secure a BIR confirmatory certification or tax ruling before it can avail itself of tax exemption," the tax court said.

Money talks

o New Land Bank president Alex Buenaventura has ordered the auction of Land Bank's minimal stake in the Philippine Airlines on March 13, instead of waiting for a planned re-IPO of PAL Holdings or until after the flag carrier shall have chosen a new foreign airline partner later this year.

It was not immediately clear if Buenaventura's decision had been cleared with the Land Bank chairman, Finance Secretary Carlos Dominguez, who incidentally was a former PAL president. 

o Retired PLDT president Napoleon Nazareno has been nominated to the board of Security Bank along with former Tourism Secretary Ramon Jimenez Jr.

o Former Philippine Stock Exchange president Jose Luis Yulo Jr. is apparently champing at the bit at the decades-reign of the so-called "three stooges" at the Philippine Chamber of Commerce and Industry that he is taking his group, the Spanish-era Chamber of Commerce of the Philippine Islands, to a higher profile outside the PCCI umbrella.

Thanks to the generous support of the Global Peace Foundation, Yulo and CCPI are hosting up to today a four-day "economic and business forum" at the Marriott, similar to the annual Philippine Business Conference organized by the PCCI.

Heard through the grapevine

Foreign Secretary Perfecto Yasay Jr. is in no hurry to return to Manila from Europe amid the smoking-gun documents that he had resorted to terminological inexactitudes when he claimed before the Commission on Appointments and a number of times before the media that he never renounced his Filipino citizenship in favor of an American passport.

From Geneva where he defended the Duterte administration's human rights record before a United Nations forum earlier this week, Yasay proceeded to Morocco and Spain on a combined official and private business trip accompanied by his wife, Cecile.

The better half will have no problem crisscrossing Europe since she herself wields a US passport.