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BIR exec sacked for ill-gotten wealth

[ manilastandardtoday.com ] July 24-25, 2010
AN official of the Bureau of Internal Revenue (BIR) was sacked from the service for unexplained wealth.
The Office of the Ombudsman dismissed from the service Amado Navarro, Revenue Officer IV at the BIR Central Office in Quezon City, for dishonesty, grave misconduct and violation of Republic Act 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees.
The Ombudsman also ordered the filing of charges against Navarro before the lower courts for four counts of perjury, and seven counts of violation of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.
A petition for forfeiture of Navarro’s ill-gotten properties will also be filed before the Regional Trial Court of Baguio City.
Navarro, who started as Revenue Officer I with an annual gross salary of only P11,904 in 1980, was found to have acquired several real properties including various residential lots in Baguio City, agricultural lands, commercial buildings, and a resort in La Union.
The charges stemmed from an investigation conducted by the Department of Finance-Revenue Protection Service (DOF-RIPS), which is tasked to conduct lifestyle checks on officials and employees of the DOF and its attached agencies.
The complaint stated that although the properties were declared in Navarro’s Statement of Assets, Liabilities and Net Worth (SALN) from 1980 to 2002, he failed to detail the acquisition costs of each property.
He also failed to disclose his business interests or financial connections, despite findings from the investigation that indicated he had several properties for lease, bikes for hire, a grocery store, and a gasoline station.
In addition, he also has several vehicles allegedly registered in the name of his relatives.
Meanwhile, in a separate case, the Ombudsman ordered the filing of charges against Victor Cerniaz Barros, Special Agent II of the Bureau of Customs.
Barros was charged with two counts of Falsification of Public Documents under Article 171 of the Revised Penal Code; five counts of violation of Sec. 7 of RA 3019; and one count of violation of Sec. 8 of RA 6713.
Barros reportedly failed to declare a housing loan of P2 million in his 1995 SALN; a property in Laguna in his 1996 SALN; a Cherokee Pioneer V6 in his SALNs from 1989 to 2006; and a Mercedes Benz, a Kawasaki motorcycle, and shares of stock in a general service enterprise in his SALNs for 2003 to 2005.
He was also indicted for failing to file his SALNs for the years 1980, 1982 to 1986, 1990, 1991, and 2006.
In a 53-page joint resolution, the Ombudsman said that “respondent, within a period of 13 years, has amassed wealth which is almost five times greater than the total annual gross compensation he had received from the government.”
The Ombudsman has ordered the forfeiture of unlawfully acquired properties of Barros and his wife.
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SC Upholds Two Tax Measures


By Jay B. Rempillo

The Supreme Court has upheld the validity of the imposition by the Bureau of Internal Revenue (BIR) of minimum corporate income tax (MCIT) on corporations and creditable withholding tax (CWT) on sales of real properties classified as ordinary assets.
In a 48-page unanimous decision penned by Justice Renato C. Corona, the Court held that petitioner Chamber of Real Estate and Builders’ Associations, Inc., an association of real estate developers and builders in the country, “has miserably failed to discharge its burden of convincing the Court that the imposition of MCIT and CWT is unconstitutional.” In particular, the petitioner assailed the constitutionality of sec. 27(e) of RA 8424 (The National Internal Revenue Code of 1997), and the revenue regulations (RRs) issued by the BIR to implement said provision and those involving creditable withholding taxes.
The Court ruled that MCIT did not violate due process. It stressed that an income tax is arbitrary and confiscatory if it taxes capital because capital is not income. MCIT, however, is imposed not on capital but on gross income which is arrived at by deducting the capital spent by a corporation in the sale of its goods, i.e. the cost of goods and other direct expenses from gross sales, the Court explained.
The Court upheld the authority of the Finance Secretary to order the collection of CWT on sales of real property considered as ordinary assets. Section 57(b) of RA 8424 grants the Finance Secretary authority to require the withholding of a tax on items of income payable to any person, national or juridical, residing in the Philippines, it ruled.
The Court also ruled that there was no deprivation of property without due process with the imposition of CWT. It said that “nothing is taken that is not due so there is no confiscation of property repugnant to the constitutional guarantee of due process.” It stressed that CWT “does not impose new taxes nor does it increase taxes” but relates entirely to the method and time of payment. (GR No. 160756, Chamber of Real Estate and Builders’ Associations, Inc. v. Executive Secretary Romulo, March 9, 2010)
[ Source: SC Benchmark Online May 2010 ]
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KNOWING YOUR BIR REGULATIONS AND ISSUANCES

Revenue Regulations (RRs) are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes

Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.
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