October 27th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) reminded the Bureau of Internal Revenue’s officials “to always ensure due process in favor of the taxpayer” so that tax cases will not be dismissed by courts, after the Court of Tax Appeals made public yesterday a decision on a tax deficiency case against a condominium corporation that effectively erased P50 million in alleged tax deficiencies for failure of the Bureau to “personally inform” representatives of the firm.
“Not following due process to the very extreme leads tax cases open to litigation. When tax dues are litigated, we don’t get to collect immediately. The government already loses, even when it wins the case in the end,” Salceda said.
The decision was on a 2008 deficiency case against a Quezon City-based condominium firm. The full court sustained the resolution of its Second Division that the IBM Plaza Condominium Association, Inc. of Bagumbayan, QC was not liable to pay the P50 million tax as the Bureau did not send Notice of Informal Conference (NIC) to the taxpayer. The court explained that the notice is part of due process required by Revenue Regulations 22-44 in relation to Section 228 of the Tax Code.
“So, I strongly remind the officials of the Bureau of Internal Revenue to make sure every process is according to the law, regulations, and standards of due process. Nothing should be left to chance,” Salceda added.
Codify BIR regulations
Salceda, whose committee supervises the Committee on Ways and Means, says that he also wants the Bureau of Internal Revenue to “undertake an effort of codifying its own revenue regulations” so that “old or obscure RRs are not set aside, only to be invoked later by an erring taxpayer.”
Salceda says “it will be good for both the government and the taxpayers if we were following just one codified set of rules,” adding that he hopes to push the BIR to do this before his 2nd term as Committee on Ways and Means chair ends.
“I’m on my 3rd consecutive term as Congressman. I want this to be a legacy, along with full digitalization of the tax process. And, of course, we can simplify tax processes better if they’re all in one code, like the Manual of Regulations for Banking (MORB) of the Bangko Sentral ng Pilipinas.”
Senate could tackle Ease of Paying Taxes bill in November
Salceda says that efforts to simplify the payment of taxes all align with the goals of the “Ease of Paying Taxes Act” which Salceda principally authored, and which the House has already approved on 3rd reading.
“I think the Senate will take it up by November. We could have it by end of the year, at least in bicam if not yet as enacted law.”
The House tax chair says that “the measure will make tax procedures simpler, hopefully reducing litigation and disagreements between tax authorities and taxpayers.”
“Ease of Paying Taxes will make taxpayer rights clearer, so BIR doesn’t violate them. A BIR that is a stickler for due process to the last detail is a BIR that is more immune to tax cases. That’s good for everybody, taxpayer and government alike.”