chapter 2 Flashcards
what is tax administration?
it is the instrument for carrying out the decision of any Government in power with regards to mobilizing revenues for economic development
what is the department of finance?
DoF principally responsible for the fiscal policies and general management of the Philippines government’s financial resources
what are the tax administrative agencies?
Department of Finance
Bureau of Internal Revenue
Bureau of Customs
Tariff Commission
Land Transportation Office
Duly and Lawfully Authorized Collectors
Local Offices Incharge to Enforce Local Taxation
BUREAU OF INTERNAL REVENUE (BIR)
as mandated:
*Assessment and collection of all national internal revenue taxes, fees and charges.
*Enforcement of all forfeitures, penalties, fines and execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts
*Administer supervisory and police powers conferred by National Internal Revenue Code as amended by R.A. 8424 or other laws.
The Bureau of Internal Revenue is mandated by law to _____
assess and collect all national internal revenue taxes, fees and charges, and to enforce all forfeitures, penalties and fines connected therewith, including the execution of judgements in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts.
The BIR is principally tasked with the enforcement of the National Internal Revenue Code (NIRC). NIRC Sections 2, 9, 10, 13 and 14 list the following BIR officers:
- The Commissioner of the Internal Revenue
- Deputy Commissioners of the Internal Revenue
- Revenue Regional Director
- Revenue District Officer
- Revenue Examiners and Officers
- Division Chiefs
- BIR Collection Agents
Powers and Duties of the
Bureau of Internal Revenue
- Assessment and collection of all national revenue taxes, fees and charges;
- Enforcement of all forfeitures, penalties, and fines on internal revenue taxes, fees and charges;
- Execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts; and
- Give effect and administer the supervisory and police powers conferred to it by the Tax Code and other laws. (Sec. 2, NIRC)
a.) Assigning Internal Revenue Officers to establishment where articles subject to excise tax are produced;
b.) Providing and distributing forms, receipts, certification, stamps and other BIR documents to concerned officials;
c.)Issuing receipts for tax collected; and
d.) Submitting annual report and pertinent information to the Congress
POWERS & DUTIES OF THE BIR COMMISSIONER
- To Interpret provisions of the Code and other Tax Laws (Sec 4, NIRC)
- Decide disputed tax assessments (Sec 4, NIRC)
- Power to obtain information, summon and examine testimonies (Sec 5, NIRC)
- Make assessment and prescribe additional requirements (Sec 6, NIRC)
- Compromise, abate and refund or credit taxes (Sec 204, NIRC)
- Suspend the business operations of a taxpayer (Sec 115, NIRC)
- Delegation Power (Sec 7, NIRC)
explain: To Interpret provisions of the Code and other Tax Laws (Sec 4, NIRC)
The Tax Code authorizes the Commissioner of Internal Revenue (“Commissioner”) to interpret tax laws, subject to review by the Secretary of Finance. Government agencies like the BIR also have the power of subordinate legislation to aid in the implementation of tax laws.
The CIR has the exclusive and original power to interpret provisions of the NIRC and other tax laws subject to review by the Secretary of Finance.
explain: Decide disputed tax assessments (Sec 4, NIRC)
The BIR Commissioner has the power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed arising under the tax code or other tax laws, subject to the exclusive appellate jurisdiction of the Court of Tax Appeals (CTA)
The tax assessments issued by the Regional Directors, Assistant Commissioners and Deputy Commissioners may be appealed administratively to the CIR.
Final decisions made by the CTA shall be taken for review to higher courts within 15 days from notice of ruling, decision or judgment of CTA (Supreme Court Circular No. 1-91, February 27, 1991)
explain: Power to obtain information, summon and examine testimonies (Sec 5, NIRC)
This power of the BIR Commissioner is intended to ascertain the correctness of tax return and to determine the taxpayers’ liability and compliance.
In the exercise of this power, he is authorized to:
*Examine taxpayer’s records
*Obtain taxpayer’s financial information
*Summon the person liable for tax
*Take testimony of the person concerned under oath
*Conduct regular canvas concerning all persons liable to pay any internal revenue tax
explain: Make assessment and prescribe additional requirements (Sec 6, NIRC)
The power of the BIR Commissioner to make assessment and prescribe additional requirements for tax administration and enforcement are as follows:
1. Examinations of:
a.) Returns and determination of tax due, and
b.) Statements, reports and other documents not submitted
2. Authority to:
a.) Conduct Inventory and surveillance and prescribe presumptive gross sales and receipts
b.) Terminate Taxable period.
The BIR Commissioner shall declare the tax period terminated and demand for immediate payment of the tax due when the taxpayer:
*Retires from business
*Intends to leave the Philippines
*Removes his property from the Philippines
*Hides and conceals his property, and
*Performs any act tending to obstruct the proceedings of the collection of tax for the past or current quarter or renders the same totally or partially inefficient.
c. Prescribe Real property values
The CIR is authorized to divide the Philippines into different zones or areas and shall, upon consultation with the competent appraisers both from the private and public sectors, determine the fair market value of real properties located in each zone or area.
d. Inquire into bank deposit accounts
The power of the BIR Commissioner to inquire into bank deposit accounts of taxpayer should not violate the Secrecy of Bank Deposit Law (R.A. no. 1405) and other general or special laws. He is therefore authorized only to inquire into the bank deposit of:
a. A decedent to determine the gross estate of such decedent
b. Any taxpayer who has filed an application for compromise of his tax liability under Section 204 (A) of the Tax Code by reason of financial incapability to pay his tax liability.
c. Accredit and register tax agents, based on their professional competence, integrity and moral fitness.
d. Prescribe additional procedural or documentary requirements
explain: Compromise, abate and refund or credit taxes (Sec 204, NIRC)
The BIR Commissioner may compromise, abate, refund or credit the payment of any internal revenue tax when:
1. A reasonable doubt as to the validity of the claim against the taxpayer exits, or
2. The tax or any portion thereof appears to be unjustly or excessively assessed, or
3. The financial position of the taxpayer demonstrates a clear inability to pay the assessed tax
4. The administration and collection costs involved do not justify the collection of the amount due.
The BIR Commissioner may credit or refund taxes erroneously or illegally received or penalties imposed without authority.
The BIR Commissioner may:
- Credit or refund taxes erroneously or illegally received or penalties imposed without authority;
- Refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and
- Redeem or, change unused stamps that have been rendered unit for use and refund their value upon proof of destruction.
- Suspend the business operations of a taxpayer (Sec 115, NIRC)
The CIR or his authorized representative is empowered to suspend the business operations and temporarily close the business, establishment of any person for any of the following violations:
- In the case of a VAT-registered person,
a. Failure to issue receipts or invoices
b. Failure to file a VAT return as required under Section 114 of NIRC; or
c. Understatement of taxable sale or receipts by thirty percent or more of his correct taxable sales or receipts for the taxable quarter.
- Failure by any person to register as required under Section 236 of NIRC.
The temporary closure of the establishment shall be for the duration of not less than five (5) days and shall be lifted only upon compliance with whatever requirements prescribed by the Commissioner in the closure order (Sec. 115, NIRC)
