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Friday, October 08, 2004
BIR to fight P1B Tan refund
THE Bureau of Internal Revenue (BIR) will ask for reconsideration on the Court of Appeals ruling upholding a decision of a tax appeals court granting Lucio Tan’s Fortune Tobacco a P1 billion tax refund.
BIR Commissioner Guillermo Parayno said the bureau will either file a motion for reconsideration with the CA or elevate the matter to the Supreme Court.
“The better thing to do is to file it directly to the Supreme Court on the question of law. But I feel very strongly that there is an injustice here,” Parayno said in an ANC interview.
He explained that the intention of the law is to increase taxes and not lower it.
Parayno said the high court should make a final ruling on the questions of ambiguity relating to the tobacco excise tax.
Former BIR chair Liwayway Vinzons-Chato, in a separate interview, agreed, saying the CA decision comes as a result of ambiguities in the national internal revenue code.
She said in the case of Fortune tobacco, one of the law’s provisions allows the BIR to increase the tax on tobacco while another provision says it cannot be increased without the approval of Congress.
Meanwhile, Malaca-ñang said it respects the decision of the court, but the BIR is reviewing its legal options.
Cheats
Presidential Spokesman Ignacio Bunye said the drive against tax cheats continues without letup.
“The BIR is filing more and more tax cases every day. We will not be deterred by temporary setbacks,” Bunye said.
The Court of Appeals upheld Wednesday a ruling by the Court of Tax Appeals (CTA) granting Tan tax refunds amounting to P1.035 billion.
The case arose from excess taxes paid by Fortune Tobacco Corp. (FTC) to the BIR following the shifting of the tax system from ad valorem to specific tax five years ago covering eight brands of FTC, namely, Champion M100, Salem M100, Salem King, Camel Lights Box, Winston F Kings and Winston Lights.
In implementing the provisions for a 12 percent increase of excise tax on cigarettes packed by machines by January 2000, the finance secretary, upon the recommendation of the BIR, issued Revenue Regulations 17-99 last December 16, 1999 providing for the increase in the applicable taxes on cigars and cigarettes.
Revenue Regulations 17-99 provided that the “new specific tax rate for any existing brand of cigars, cigarettes, packed by machine, distilled spirits, wines and fermented liquor shall not be lower than the excise tax that is actually being paid prior to Jan. 1, 2000.”
FTC paid taxes according to BIR’s regulations under the new rates.
But thereafter, FTC filed with the BIR’s appellate division claims for refund.
The CTA, in its ruling, said the BIR regulation resulted in unauthorized “administrative legislation,” adding that the three-year transition period, within which it was to be operative starting Jan. 1, 1997 when the law took effect, expired on Dec. 31, 1999.
Tan has been fighting a P25 billion tax evasion case filed by the BIR.
(MVG/Sunnex)
(October 8, 2004 issue)
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