BIR eyes more compromises, settlements

MANILA, Philippines - Alleged tax evaders, including some personalities, are up for some reprieve as the Bureau of Internal Revenue (BIR) has started opening the gates for more compromises and court-mediated settlements.

“We have a number of cases with the Court of Tax Appeals (CTA), those where the assessments often being questioned, and my instruction...is to try to work out compromise or mediation,” BIR commissioner Caesar Dulay told reporters.

“I had a meeting with the presiding justice of CTA and we discussed quite extensively the process of mediation,” he said last week.

Of the 635 cases filed under the Run After Tax Evaders (RATE) program, 50 were pending before the CTA by the time the previous administration left office last June, Department of Finance data showed.

Including those at various stages of litigation, RATE cases were assessed to have total taxable value of 103 billion.

If realized, mediation and compromises may benefit some celebrities, including now Senator Manny Pacquiao, whose tax case had been pending with CTA for years already.

Dulay said this is exactly the reason why BIR is pushing for more settlements.

“Litigation takes a long time, and it does not help the taxpayer or the government in raising revenue, so that’s one area we are looking at,” the BIR chief said.

“We’d rather encourage tax payers to compromise as long as it’s within the law, to compromise whatever pending assessments they have,” he said.

Before it even reaches the court, taxpayers are given the option to apply for compromise with the bureau. These compromises however are subject to evaluation.

It was not clear how many cases and their corresponding revenues are generated each year from these compromises since they are confidential by law. BIR spokesperson Marissa Cabreros also did not respond to request for comment.

As for those undertaking mediation, Dulay said any agreement between the tax agency and taxpayers will need to be approved by the court.

Benedict Tugonon, president of industry group Tax Management Association of the Philippines, welcomed the “positive development.”

“We hope we can finally see tax cases resolved much faster, without the need for a full-blown litigation, which could be costly for taxpayers,” Tugonon said in a text message yesterday.

“We hope the BIR will also activate and hasten the acceptance of legal tax compromise offers and requests for abatements,” he said.

Under the Duterte administration, Dulay said BIR made it one of its pillars to promote taxpayers satisfaction by making doing business easier through process improvements.

Around 300 tax examiners are also being asked to explain for sitting on and dragging long-standing tax probes.

“We derive satisfaction from the feedback we get from taxpayers...Hopefully we can continue improving ourselves in addressing the needs of the taxpayers,” Dulay said.

From January to July, BIR, which accounts for around 80 percent of tax revenues, collected P900.9 billion, up nine percent year-on-year.

It is tasked to raise P1.62 trillion for 2016.