BIR to review taxes subject to court challenge
THE DEPARTMENT of Finance (DOF) is seeking a review of tax matters that may be subject to legal challenge in order to do away with “unfair” collections that may later be reversed by the courts and detract from the government’s ability to execute its ambitious spending program.
Finance Secretary Carlos G. Dominguez III said in Davao recently that he directed the Bureau of Internal Revenue (BIR) to review all tax-related issuances to head off potential legal challenges that could cost taxpayers billions of pesos in payments when the government loses in court.
“I think there are more cases of similar nature which will come up soon. So I asked the BIR to please review all the issuances so that we avoid burdening the public by collecting taxes that are not fair, that we are going to lose in court anyway and that we are going to burden our taxpayers by paying penalties and interest,” Mr. Carlos G. Dominguez III said in a statement.
Private stakeholders of public-private partnership projects have hauled the Philippine government before local and international arbitral tribunals in separate cases, to settle alleged violations of their concession agreements.
This includes the P5- billion withholding tax collected by the BIR from the Poverty Eradication and Alleviation Certificates (PEACE) Bonds, which were originally ruled to be tax-exempt before maturity.
A similar case involved the P20 million paid back to Philippine International Air Terminals Co. (PIATCO) involving the NAIA 3 project.
Recently, the Manila North Tollways Corp. ( MNTC) also demanded from the government compensation vis- a- vis forgone toll collections due to delays in regulatory approval for a toll hike.
In a statement, the DOF said “[ t] he government is liquid at this point, but paying for these pecuniary claims will mean setting aside for such possible court-ordered payments huge amounts of taxpayers’ money that should otherwise be used to augment the budget for the Duterte administration’s accelerated spending over the next six years on infrastructure, human capital and social protection for the poor and other vulnerable sectors.”
“Every time I sign a check for some mistake that has been made in the past, my hands almost bleed,” said Mr. Dominguez. —