By Zinnia B. Dela Peña (The Philippine
Star) | Updated April 7, 2014 - 12:00am
MANILA, Philippines - Several
professional and business groups banded together to oppose the Bureau of
Internal Revenue’s rules on due process requirement in the issuance of
deficiency tax assessments.
The joint paper was signed by the Tax
Management Association of the Philippines, the American Chamber of Commerce,
the Association of Certified Public Accountants in Public Practice, the
Integrated Bar of the Philippines, the Philippine Chamber of Commerce, the
Philippine Institute of Certified Public Accountants, and the Makati Business
Club.
These groups are urging the BIR to
revisit the new rules and consider the arguments raised by taxpayers.
They said while they understand the
BIR’s need to enhance tax compliance, intensify collection efforts, and
streamline the assessment process, equal consideration must also be given to
taxpayers’ right to due process.
Under the new rules, the notice for
informal conference stage has been deleted from the procedure of issuing
deficiency tax assessment.
The BIR would issue a preliminary
assessment notice (PAN) if after its audit of the taxpayer’s books and accounts
there is sufficient basis to assess the taxpayer for any deficiency tax or
taxes.
A Formal Letter of Demand (FLD) and
Final Assessment Notice (FAN) will be issued if the assessed taxpayer fails to
respond within 15 days from the receipt of the PAN or 15 days from
filing/submission of the taxpayer’s response.
The taxpayer must file a protest
letter within 30 days from receipt of the FLD/FAN otherwise the assessment will
be final and executory. A taxpayer must state whether the protest letter is a
written request for reconsideration or written request for reinvestigation,
whichever applies.
According to these groups, the very
short period of time for analyzing the discrepancy tax assessments and
collating the supporting documents essentially deprives the taxpayer of his
constitutionally-protected right to due process.
The shortened period does not also
allow BIR officers enough time to consider and review the documents and
arguments presented to them by the taxpayers.
“The informal conference is considered
to have evolved into “best practice” since it provides the taxpayers the
opportunity to present their side of the case through submission of documents
and discussion of issues with BIR personnel,” they said.
“The 15-day period for the issuance of
the FAN/FLD after the PAN was issued does not afford the BIR ample time to
carefully consider the taxpayer’s response to the PAN. Moreover, even if the
taxpayer properly protests the tax assessment, the FAN/FLD will be
automatically issued after the lapse of the 15 days,” they said.
They likewise objected to the
imposition of 20-percent delinquency interest on top of the 20-percent
deficiency interest, saying the double imposition of interest amounts to an
unjust collection of an additional penalty, rather than compensation to the
state for delay in the payment of the tax.
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