The chairman of the House Committee on Ways and Means called for a special briefing with the officials of the Bureau of Internal Revenue and Department of Finance (DOF) on Monday on the issues involving Megaworld Corp.
Panel chairman and Albay Rep. Joey Sarte Salceda said he wants tax authorities to explain the cancellation of the closure order against Megaworld Corp.
“It is clear to me that the issue could have been resolved internally within the Bureau of Internal Revenue. I have not heard from the Large Taxpayer Service, and so far releases have only come from the NCR South Regional Office,” he said.
“Releases such as the closure order should not have been made public without a unified BIR agency position. I still haven’t seen one. To clarify things, I am calling for a special hearing on this matter on Monday.”
On May 17, a media advisory from the South NCR Revenue Region of the bureau indicated the issuance of a closure order of the company on May 18.
On May 20, in a press release, the BIR said its Revenue Region 8B-South conveys its position that it has jurisdiction over such enforcement activity as supported by a Revenue Special Order signed by the commissioner of the BIR.
The agency said the investigation involves the verification of taxes on the One-Time Transactions (ONETT) on the sale/transfer of properties by Megaworld.
It added although Megaworld is considered a large taxpayer under the jurisdiction of the Large Taxpayers Service, the BIR national office, ONETT falls under the jurisdiction of the BIR regional offices since the situs of taxation of sale, transfer, and other disposition of real properties is where the property is located.
Salceda said, “the markets are already uncertain. It’s a sin to the financial markets and to make economic and fiscal stability to create the impression that tax enforcement is arbitrary and tax authorities can simply inflict reputational damage at will.”
“We are trying very hard to build the country’s tax institutions and improve their performance. We know the damage that tax uncertainty can create. Unforced errors like this hurt our reputation as an investment destination and as a tax jurisdiction.”
According to Salceda, tax authorities “need to be more transparent, more professional, and more by-the-book” about the tax system and instruments of enforcement.
“The BIR Central Office has been a close partner of my committee so I hope I will get better answers from them once they are called.”