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As a
principal attribute of sovereignty, taxes affect each
and every one of us, as the saying goes, from the cradle
to the grave. And as taxpayers, we bear the burden of
paying the taxes and duties imposed on us by the
government which, in turn, is supposed to use the
collected funds to finance not only its very existence
but, more important, to promote public welfare and to
sustain a civilized society.
Even
with such burdens already unilaterally imposed upon
taxpayers, fate has it that the odds lean in favor of
the government and, in turn, against the former.
In
accordance with all the theories justifying the
collection of taxes, the very first of the burdens that
a taxpayer usually encounters is the principle of law
which states that all laws passed by Congress, or
ordinances in the case of local government units (LGUs),
are presumed to be valid unless declared
unconstitutional.
No
matter how unfair it may seem to those affected by the
imposition of a particular tax measure, taxpayers are
usually left with no choice but to pay the applicable
taxes, or else suffer the corresponding penalties
exacted from those who do not comply, until and unless
the issues raised questioning the validity of such
law/ordinance are finally settled in court.
This
presumption of validity extends even to the regulations,
circulars and orders issued by the Bureau of Internal
Revenue (BIR), no matter how these may contradict the
law which they seek to implement. Classic examples of
these are the recently issued regulations/circulars
relating to the tax-amnesty program under Republic Act
9480, which had caused a stir in the tax community.
In
addition to this is the principle that tax exemptions
are strictly construed against the taxpayer but are
liberally in favor of the State, which, as ruled in
Davao Gulf Lumber v. Commissioner of Internal Revenue,
et. al., 293 SCRA 76, “must be clearly shown and based
on language in the law too plain to be mistaken.”
Such
mandate compels each taxpayer claiming exemption from
payment of certain taxes to prove in unmistakable terms
that it is, indeed, excused from payment of such tax.
The same goes with condonation of tax liabilities as
well as tax refunds, since these are considered to be of
the same nature as tax exemptions.
When it
comes to the power of the BIR to assess delinquent
and/or deficiency taxes, nothing is more contentious
than the principle of regularity in the performance of
official functions, which suggests that assessments
shall be presumed valid in the absence of proof of
irregularities in conducting the same.
This
brings to mind the assertion in favor of the government
that pursuant to Revenue Memorandum Circular 23-2000,
even assessments based on estimates or best evidence
obtainable are prima facie valid unless negated by
evidence to the contrary. Furthermore, jeopardy
assessments may be issued against taxpayers under
certain circumstances.
No
explanation regarding this presumption concerning the
validity of assessments is more definite than that
expounded in the case of Commissioner of Internal
Revenue v. Construction Resources of Asia Inc., G.R. No.
68230, (November 25, 1986), where it was declared that,
“All presumptions are in favor of the correctness of tax
assessments. The good faith of tax assessors and the
validity of their actions are presumed. They will be
presumed to have taken into consideration all the facts
to which their attention was called. No presumption can
be indulged that all of the public officials of the
State in the various counties who have to do with the
assessment of property for taxation will knowingly
violate the duties imposed upon them by law.”
Although
an assessment may have been haphazardly made, taxpayers
are left with no recourse but to be vigilant in proving
whatever defenses they have against the onslaught of the
taxing power and file their respective position papers
and/or protests, no matter how clueless they might have
been as to the legal and factual bases of the assessment
against them; otherwise, it shall become final.
However,
additional burden is unwittingly inflicted upon them,
usually in the form of extra financial expenses, along
with the time and effort that could have been spent for
activities more beneficial to such taxpayers.
The only
consolation available for taxpayers is that, eventually,
after protracted litigation, the Supreme Court may
finally rule on the issue pertaining to the validity of
such assessment, in relation to the presumption that the
revenue officers had regularly performed their duties.
At the
end of the day, it shall be easier for taxpayers to have
a more open mind in terms of accepting the burden of
paying taxes, if the funds collected through the process
are appropriately spent for public welfare and
development.
The author is an associate of BDB Law. If you have any
comments or questions concerning the article, you can
e-mail the author at oliver.m.beltran@bdblaw.com.ph or
call 856-2952. |
