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Inquiry Into Overreaching Filipino Tax Regulations Sought

by Mary Swire,, Hong Kong

04 December 2014

The House of Representatives Committee on Ways and Means has been asked to conduct an inquiry into a number of cases where tax regulations issued by the Bureau of Internal Revenue (BIR) and the Department of Finance (DOF) have been judged by the Philippines Supreme Court (SC) to be outside of their authority.

Sharon Garin, a Vice-Chair of the Committee, is seeking the inquiry as she has noted that, since 2010, the SC has issued many temporary restraining orders (TROs) on the BIR and DOF for their issuance of regulations on the implementation of tax laws.

"As clearly interpreted by the SC, the rule-making power should be within the scope of the statutory authority granted by the legislature to the BIR," she said. "The BIR may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering."

She added that, "instead of effectively implementing the tax laws, the BIR has been, through such issuances, causing a chilling effect on taxpayers, stockholders, and investors."

Noting examples, Garin said BIR's revenue regulations of March 2014 that prescribed the guidelines and policies to monitor the service fees of professionals were struck down as being outside the scope of the BIR's rule-making power. In addition, regulations in December 2013 sought the submission of alphabetical lists of employees/payees. These were likewise blocked because of an alleged violation of the policies of due process.

In addition, Garin noted that problems were raised earlier this year with regard to regulations requiring the completion of new BIR forms that included requests for supplementary information on individual and corporate income taxpayers.

"The House did not hesitate to call for an inquiry on such issuances, and requested the BIR to stop the enforcement thereof on ground of violations of the right to privacy, [the] tax code, [the] Bank Secrecy Law, [a] lack of proper publication and consultation, and their administrative infeasibility," Garin said.

TAGS: individuals | court | compliance | Finance | tax | business | tax compliance | training | law | employees | Philippines | fees | enforcement | ministry of finance | tax authority | professionals | regulation

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