POSTSCRIPT / December 27, 2007 / Thursday

By FEDERICO D. PASCUAL JR.

Philippine STAR Columnist

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Guarantees of tax amnesty must stick

FLIMSY TAPE: Putting tape around the muzzle of police firearms — so they cannot be fired daw during the New Year revelry – and then publishing the picture of the “taping” is ridiculous.

Why don’t they simply order all policemen not to fire their guns in merriment or under the influence of holiday cheer? Do policemen now selectively disobey orders of their superiors?

If there is a general breakdown of discipline in the service, that ceremonial taping of firearms will be ineffectual.

With the leadership qualities evinced by PNP Chief Avelino Razon, I believe that a clear order from him to everybody down the line should be enough.

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STAY ON TOP: I wince whenever I hear an officer say, in response to a reporter’s stupid question, that the police welcome the declaration of ceasefire by the New People’s Army but that they would be ready if the tigil-putukan were violated.

The police are reduced to a secondary role in peace-keeping when they just react to what the enemies of the state do or say. The police, and the armed forces for that matter, should grab the initiative and just do what they have to do.

And then, why do the police and the military have to announce their every tactical move? (Unless, of course, they are just airing false leads to confuse the enemy.)

Police and defense forces are not under obligation to answer all questions of media regarding operations.

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AMNESTY: Is the government estopped from collecting deficiency taxes from business firms and individuals that have availed themselves of tax amnesty?

The question is being raised, because some businessmen have received BIR collection letters despite their having availed themselves of tax amnesty long before the letters came.

The BIR head office or the districts should check on this as it could erode public trust in what the government or the law says.

It appears from Supreme Court and Court of Tax Appeals decisions, as well as rulings of the BIR itself, that there is a presumption of regularity in favor of those who had availed themselves of tax amnesty.

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OMNI-PARDON: Section 2 of the Tax Amnesty Act of 2007 (RA 9480) says that the taxpayer must pay the applicable amnesty tax within six months from the effectivity of BIR’s Implementing Rules and Regulations, or around six months from September 2007.

When properly paid, with all conditions of the law complied with, amnesty tax is expected to protect the taxpayer from future harassment.

In a ruling dated April 26, 1991, in the case of Marubeni Corp., the Supreme Court said that even assuming that the tax deficiency assessment were correct, the government is estopped from collecting the difference between the deficiency assessment and the amnesty tax already paid.

The reason given was that the taxpayer has already paid almost the equivalent amount to the government by way of amnesty taxes, and was granted not merely an exemption but an amnesty for past failings.

The court also said: “A tax amnesty, being a general pardon or intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law, partakes of an absolute forgiveness or waiver by the Government of its right to collect what otherwise would be due to it, and in this sense, prejudicial thereto, particularly to give tax evaders who wish to repent and are willing to reform a chance to do so.”

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APPLICABILITY: Although those decisions involve earlier tax amnesty laws, logic dictates that the effects of amnesty discussed by the SC apply to all tax amnesty laws, including RA 9480. The pronouncements apply indifferently to other amnesty laws.

Section 6 of RA 9480 (reiterated in Section 10 of Department of Finance Order No. 29-07 implementing it) provides that those who have availed themselves of amnesty under Section 5, and have fully complied with all its conditions, are entitled to the immunities and privileges provided.

The section says: “The taxpayer shall be immune from the payments of taxes as well as additions thereto, and the appurtenant civil, criminal or administrative penalties under the National Internal Revenue Code of 1997, as amended, arising from the failure to apply any and all internal revenue taxes for taxable year 2005 and prior years.”

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CASE CLOSED: Another BIR ruling, dated May 20, 1997, signed by then BIR commissioner Liwayway Vinzons-Chato, said that since the company in question “has properly availed of the tax amnesty under EO 41 as expanded by EO 64, you are relieved from the payment of the aforesaid amount of P699, 845.02 as deficiency income tax for the year 1981. You may now, therefore, consider the case closed and terminated.”

In still another case in September 1987, BIR deputy commissioner Eufracio D. Santos said that under Section 3 of EO No. 64, availment of amnesty relieved the company from any income, estate, donor’s and business tax liabilities as well as of all civil, criminal, or administrative liabilities under the National Internal Revenue Code for the years 1981 to 1985.

The company in question he said, “cannot be held liable for the payment, among others, of the aforementioned deficiency advance sales tax liability for the year 1985.”

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(First published in the Philippine STAR of December 27, 2007)

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