Henares to Congress: Let courts decide on memos

MANILA, Philippines - The embattled head of the Bureau of Internal Revenue has asked Congress to stand down and allow the judiciary to decide whether the tax collection agency’s revenue memorandum circulars are legit or not.

In a phone interview, BIR commissioner Kim Henares maintained that the agency is merely doing its job and that Congress would need to amend the law to correct what it perceives as irregular.

“If the circular is wrong, the remedy is to go to court and have it declared illegal. But if the circular is correct and the court affirms the same then the legislative body’s remedy is to pass a law to amend the law that is faulty,” Henares said.

“If the law is wrong they, the legislative body, should amend the law being interpreted,” she added.

Circulars are issued to interpret the laws passed by the executive and legislative bodies, Henares pointed out.

Henares was reacting to Marikina Rep. Miro Quimbo’s statement that he would pass a resolution setting the parameters and ground rules that the BIR must follow in implementing tax laws that emanate from Congress.

Quimbo, chairman of the House committee on ways and means, said Congress has received complaints from various business groups over a several BIR circulars which they found oppressive and a deterrent to the local economy’s growth.

He said the committee would like to sit down with the BIR and discuss on how certain tax provisions should be implemented to ensure that the interests of both the government and the private sector will be safeguarded.

One bone of contention is a new tax rule which removes the right of a taxpayer to an administrative appeals process. Sixteen local and foreign business groups have urged the government to scrap this new ruling, which they claim makes it more difficult for investors to get their value-added tax (VAT) refund.

Under the rule, if the claim for VAT refund or credit is not acted upon by the Commissioner within 120 days as required by law, such inaction shall be deemed a denial of the claim.

According to foreign business chambers, “this effectively encourages the BIR to abdicate its administrative duty to process refund claims by compelling taxpayers to pursue judicial claims with the Court of Tax Appeals.”

Another ruling that is strongly being opposed by the local business community is the disclosure of an alphabetical list of investors receiving income payments and dividends subject to creditable and final withholding tax.

The ruling is now subject of a temporary restraining order by the Supreme Court.

The BIR, however, insisted that the rule was aimed at ensuring a more accurate and efficient manner of monitoring and capturing information on all income payments made by employers.