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Monday, April 25, 2005
Peñaflorida: X-rated
By Atty. Jobert Peñaflorida
On the spot
No, this isn't about the proliferation of smut materials in mobile phones and internet which has prompted many celebrities to shed crocodile tears on TV to assure everyone that those in the videos are mere look-alikes.
I simply want to put a catchy and exciting title to an otherwise bland yet complex subject matter: taxes.
The tax season is over but the agony of high profile taxpayers, who have been made public examples (of those not to emulate) by the Bureau of Internal Revenue (BIR) under its Rate (Run Against Tax Evaders) program, will surely remain way beyond the April 15 deadline.
he no-nonsense drive of the BIR, under Commissioner Guillermo Parayno, appears to be continuing and relentless.
Indeed, our actual tax collection performances have been dismal and below par. The inability of the tax bureau to meet its annual revenue targets simply indicates that there is a widening leakage in our tax pipelines.
This scenario needs to be addressed immediately considering our growing national deficit.
I have repeatedly emphasized the "lifeblood" doctrine to my students in taxation law. This doctrine, often cited by the Supreme Court, simply states that taxes are the lifeblood of the nation, without which the state would be paralyzed.
Thus, their prompt and certain availability are an imperious need. This doctrine has been used to justify the need for summary remedies in the collection of taxes.
In this regard, I wish to put in my own 10-cents worth of opinion in the recent tax evasion brouhaha that involved several celebrities, especially movie actor Richard Gomez.
While Gomez is crying political harassment and lack of due process, he may not be aware, like many of us, that the remedies available to government are entirely different when it comes to tax cases.
Richard was quoted as having said that the BIR acted hastily and unreasonably by charging him with tax evasion while the examination and review of his tax obligations (for the years when he allegedly failed to file his returns and pay the corresponding taxes) are still on-going.
Unfortunately for Mr. Gomez, there is no violation of legal procedure or due process on the part of the BIR as the 1997 National Internal Revenue Code clearly provides for more rigid procedure in tax assessment and collection.
As to the first issue of whether Mr. Gomez has committed tax evasion, it appears that the BIR has established prima facie evidence to charge him.
Under the Tax Code, any person who is required to pay any tax, make a return, keep any record, or supply correct and accurate information, and who willfully fails to do so has committed a criminal offense punishable by a fine of not less than P10,000 and suffer imprisonment of not less than 1 year but not more than 10 years.
Of course, Richard can rebut this in court by showing that there was no actual willful neglect.
On the second issue of whether the criminal charge is premature, again, the BIR acted within the ambit of the law.
Unlike in other instances where there is calibrated action in accordance with the principle of exhaustion of administrative remedies, such approach does not apply to taxation.
The Tax Code empowers the government to avail of all remedies - administrative, civil and criminal - either separately, successively and, worse, even simultaneously (or all at the same time and in no particular order).
Thus, there is no need for the BIR to complete the assessment of the tax obligations of Mr. Gomez (which falls under administrative remedy) before it can file criminal action.
In fact, the BIR can repeat the process and avail of either or all of the three remedies as many times over until it completely collects the full amount of tax liability.
Moreover, the BIR has in its command a vast array of other administrative options against delinquent taxpayers, ranging from distrait of personal property, lien on and levy of real property, garnishment of bank deposits, sale and forfeiture of assets.
Unfortunately to taxpayers, there is no legal remedy that can prevent the BIR from doing so.
Unlike in ordinary cases when the aggrieved party can run to the regular court and get a temporary restraining order, the Tax Code explicitly provides that injunction does not lie against the BIR.
This time, the BIR must display political will and prove that it can go beyond our infamous "ningas-cogon" mentality. If it does, it will surely send a strong message to everyone that: tax cheats, beware!(For comments/reactions, send email to attyjobertpenaflorida@yahoo.com.)
(April 25, 2005 issue)
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