CTA grants 11 ADB employees 14.6-M tax refund

Eleven Filipino employees of the Asian Development Bank (ADB) were granted a total of P4.6 mil-

lion in tax refund by the Court of Tax Appeals (CTA) which also declared that the Bureau of Internal Revenue (BIR) cannot collect taxes retroactively.

In a resolution, the tax court’s Second Division said “any ruling promulgated by the BIR Commissioner shall not be given retroactive application if prejudicial to taxpayers.”

Then BIR Commissioner Kim S. Jacinto-Henares issued in 2013 Revenue Memorandum Circular 31-2013 placing under income tax coverage salaries and allowances received by Filipino workers of the bank.

The CTA ruled in favor of the BIR, but said the tax cannot be imposed retroactively. Hence, the court ordered the return of the income tax remitted in 2012.

Citing Sections 246 and 338 of the Tax Code, the court said the petitioners cannot be faulted for not paying the tax in 2012 and prior years believing that they were exempted under the ADB charter.

The court instead blamed the previous BIR administrations for not enforcing the collection.

The government retained its right to collect the tax from Filipino officials and employees when then President Marcos in concurrence with the Senate ratified the ADB charter in 1965.

The tax refund petition was filed jointly by Irish Aguilar, MajellaCanzon, Arlene Cavez, Helen Gruda, AmparoDato, Marian Lagmay, VergelLatay, Princess Lubag, Ruth Mangrubang, Sheila Mariano, and Arlene Porras.