Henares’ legacy under scrutiny

Incoming Bureau of Internal Revenue chief Caesar Dulay said the new administration would review orders issued by the bureaus’ current head, which Tax Management Association of the Philippines (TMAP) claimed were fostering corruption and overregulation.

The tax managers had asked the Duterte administration to scrap the orders issued by BIR Commissioner Kim Henares, including Revenue Memorandum Order (RMO) No. 24-2016, which mandated the possible audit or investigation of parties in transactions involving the assignment, sale or transfer of properties.

According to TMAP, RMO 24-2016 “promotes corruption” as it “gives the BIR examiners wide latitude of discretion in determining what would constitute necessary documents to be submitted, and determine capacity to acquire.”

TMAP also lamented the RMO already presumed taxpayers have committed fraud.

The tax managers also sought to scrap Revenue Regulations (RR) 6-2013, which included the fair market valuation gain of real properties owned by corporate owners in determining the capital gains tax in case shares are sold. TMAP said this was “contrary to the Tax Code’s definition of income.”

As for RR 13-2010, TMAP said “it’s high time we remove the penalties imposed on” taxpayers who went to wrong venues for their payments such that all BIR-accredited agent-banks “should be allowed to accept tax payments regardless of [revenue] district.”

Another issuance that TMAP wanted cancelled was Revenue Memorandum Circular (RMC) 54-2014, which the group said “effectively removes the option of taxpayers to pursue a purely administrative claim for value-added tax (VAT) refund, thereby forcing taxpayers to litigate their VAT refund claims at the Court of Tax Appeals.”

For TMAP, “the BIR cannot invoke a ’deemed denial’ interpretation resulting from its own inaction” on claims allowed under RMC 54-2014. It said the order granted the revenue examiner “undue power to intimidate the taxpayer and deliberately not process such VAT claims.”