THE chairman of the House Committee on Ways and Means on Thursday asked the Bureau of Internal Revenue (BIR) for an explanation on the canceled Megaworld Corp. closure order.
House Committee on Ways and Means Chairman Joey Sarte Salceda made a statement after reports came out last May 17 of a media advisory from the South NCR Revenue Region of the bureau indicating the issuance of a closure order of the company on May 18.
“It creates the impression that the BIR will twist your hand if you don’t agree with it; and businesses that are smaller than Megaworld will get the wrong signal. If they can do that to a big elephant, what can they do to smaller businesses?” he said.
“That was a bizarre series of events that leaves us with more questions than answers. Why was the order issued? Why was it canceled if the order had already been issued? On what grounds can the BIR just do that to one of the largest firms in the country; that is listed publicly besides?” Salceda asked.
According to the lawmaker, tax authorities need to be more transparent, more professional and more by-the-book about the tax system and instruments of enforcement.
“The exercise was so arbitrary, with a very strange scheduled press conference. And that does nothing for business confidence–that you can close a publicly listed corporation over an audit disagreement so drastically,” Salceda added.
“We need revenues, for sure and we need to punish businesses that refuse to pay taxes correctly. But a closure order on the basis of a protest over jurisdiction seems overboard,” he said. “So, as the Congressional committee chair overseeing tax enforcement, I just want answers.”
Salceda also said he wants to know from the Department of Finance, especially the Revenue Operations Group, whether they knew this was going to happen and to what extent.
Avoid conflict
SALCEDA also emphasized the need for better tax rules for audit and tax transparency to avoid conflict between tax authorities and taxpayers.
“We really need to fully implement the tax transparency mandates that are already in the law. I am particularly referring to electronic invoicing, which should speed up VAT [valued-added tax] refunds, minimize disputes between taxpayers and the BIR over sales-related issues and reduce the burden of compliance for taxpayers,” he said.
“We also need a fully electronic system of filing and a more transparent and more rules-based dispute resolution mechanism between the BIR and the taxpayer. The ‘Ease of Paying Taxes’ bill sought to do that and I hope President-elect BBM [Bongbong Marcos] will take it on as a priority,” Salceda added.