BIR to expand compromise settlement plan

The Bureau of Internal Revenue will expand its compromise settlement program for delinquent taxpayers.

“In terms of raising revenue, we are reviewing a lot of options. For example, since the mandate of the agency is to raise revenue, we’d rather encourage taxpayers to compromise, as long as it is within the law, whatever pending assessments they have,” Revenue Commissioner Caesar R. Dulay told reporters last week.

“We also have a number of cases with the Court of Tax Appeals (CTA)—those were the assessments often being questioned, and my instruction to our legal department is to try to work out compromise and mediation, because mitigation takes a long time, and it does not help the taxpayer or the government in raising revenue,” Dulay added.

Dulay said cases pending at the CTA would be enjoined to undergo court-supervised mediation.

In a presentation at a recent tax reform forum organized by the Financial Executives Institute of the Philippines, BIR Assistant Commissioner Marissa O. Cabreros said an ongoing and continuing study was being conducted to eventually adopt an expanded compromise program.

On its website, the BIR explained that the current compromise settlement program “affords delinquent taxpayers the opportunity to settle their outstanding tax liabilities and disputed tax assessments, in observance of the provisions of Section 204 of the Tax Code.”

“Implemented through Revenue Regulations No. 30-2001, the program allows for the compromise of tax liabilities using prescribed minimum compromise rates ranging from 10 percent to 40 percent, for reasons of financial incapacity on the part of the taxpayer or the doubtful validity of assessments,” the BIR said.

According to Cabreros, who is also the BIR’s spokesperson, they are revisiting the Regional Evaluation Board and the National Evaluation Board’s jurisdiction on the compromise program.

Also, the BIR was revisiting the program guidelines to allow easy and fast disposition of evaluation and the approval of applications for compromise, Cabreros said.

“We have a huge inventory of assessments that are still unpaid, and a lot of taxpayers are willing to offer compromise. The Commissioner’s (Dulay) thrust is to open all these assessments into collection, and for immediate disposition of those cases,” she said.