Friday, April 10, 2015



Alarmed that investors might pull-out investments from the country because of the Bureau of Internal Revenue’s “flawed” implementation of the tax laws, AAMBIS-Owa Partylist Representative Sharon S. Garin filed House Resolution 1645 urging fellow lawmakers to investigate judicial setback of regulations the BIR issued.

Since 2010, the Supreme Court has successively issued Temporary Restraining Order (TRO) against the BIR and Department of Finance issuance of regulations in the implementation of tax laws on the grounds of unconstitutionality.

On March 3, 2014, the BIR issued Revenue Regulations (RR) No. 4-2014 requiring self-employed professionals’ to submit an affidavit indicating their rates, as well as registration of official appointment books containing the names of clients and the date and time of meetings. 

The high court blocked the implementation of the regulation stating that such issuance was not within the scope of BIR’s rule-making power under the National Internal Revenue Code.

In’s May 5, 2014 news article, BIR Commissioner Kim Henares was quoted defending the regulation saying that it “promotes transparency and eradicate tax evasion among self-employed.”

Rep. Garin, a taxation lawyer, thinks otherwise: “The BIR’s intrusion to the Congress’ power to enact taxation measures cannot be ignored as it causes chilling effect with the tax payers, stockholders, and investors which may lead to crippling effect to the economy and capital flight.”

In HR 1645, Garin cited BIR RR No. 1-2014 dated December 17, 2013 mandating for the submission of alphabetical list of employees/payees of income payments as one of BIR regulations halted by the Supreme Court on the alleged violation with the policies of due process, the Tax Code, the Securities Regulation Code and the Data Privacy Act.

In 2012, the BIR Memo Circular 65-2012 dated October 31 clarifying the taxability of association dues, membership fees, and other charges collected by condominium corporations also suffered judicial set back issued by Makati Regional Trial Court on the ground that the BIR failed to conduct public hearings before the new tax imposition was promulgated.

Other moves by the Commission that were denied by the High Court are the requirement to post P3.2 billion cash bond or P4.9 billion surety bond of Saranggani Rep. Manny Pacquiao and his wife Jinkee in connection with the P3.2 billion tax evasion case filed against them and the issuance of RR No. 2-2014 and RMC No. 9-2014 prescribing for the new BIR forms requiring supplemental information on individual and corporate income taxpayers.  /MP

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