BIR eyes fees for tax appeals

MANILA, Philippines - The Bureau of Internal Revenue (BIR) is seeking comments on the possibility of imposing fees on appeals made to tax assessments before the commissioner. 

"The (BIR) is hereby imposing a filing fee for motion for reconsideration of the partial or full denial of the protest to the final assessment notice and formal letter of demand,” BIR deputy commissioner Jesus Clint Aranas said in an advisory.

Every protest will cost one percent of the basic tax amount assessed, but should not exceed P20 million. The amount should be paid upon filing of protest.

"No motion for reconsideration shall be given due course unless the filing fee has been paid," Aranas said.

"You may send your feedback to [email protected] and/or [email protected]," he added.

The final assessment notice and formal letter of demand are documents issued during tax probe. 

They follow the preliminary assessment notice. All three can be questioned by taxpayers for free during the course of the investigation. What the current order charges is a final appeal to a denied protest.

Sought for comment, Benedict Tugonon, president of the tax industry group Tax Management Association of the Philippines (TMAP), said the group will withhold comments for now.

"It's still premature to comment," he said in a text message. 

Aranas said the imposition of fees is in line with Administrative Order 31 issued in 2012 that rationalize transaction fees with government agencies.

"The imposition of filing fee shall be part of a subsequent revenue memorandum order (RMO)," he said.

Reversal

Meanwhile, BIR also said that commissioner Caesar Dulay issued RMO 44-2016, amending his predecessor's RMO 20-2016 that provided non-stock and non-profit educational institutions to apply for their tax exemption.

The earlier order was among the issuances of former BIR chief Kim Henares suspended by Dulay after taking over last July 1.

Under RMO 44-2016, Dulay removed the power of the BIR to provide classifications on what constitutes schools which are on non-profit operations. 

He cited Section 4, Article 4 of the Constitution that grants tax exemption to schools for assets and revenues "exclusively" earned for educational purpose.

The provision was reiterated under the National Internal Revenue Code of 1997, he said.

"In this light, the constitutional conferral of tax exemption...should not be implemented or interpreted in such a manner that will defeat or diminish the intent and language of the Constitution," the order stated. 

BIR personnel charged

Dulay, in a separate statement on Thursday, also said he ordered the preventive suspension of three BIR examiners after being slapped with administrative charges.

Suspended for 90 days were revenue officers Susan Ferrer, Rogelio Jugao and Crisanto Olazo of Revenue District 40 in Cubao, Quezon City. They were accused of demanding money from taxpayers they are auditing.

"Investigators took note...of the unscrupulous practice of the respondents to meet the taxpayer/representatives outside of the BIR...where it is impracticable to do so because of the voluminous records of the taxpayer," the statement read.

"The three respondents face dismissal from the revenue service if found guilty of the charges," it added.