WEEKLY TAX UPDATES [JUNE 11] Palace declares holidays in 11 areas
Relevant Highlights:
- TAX & BUSINESS-RELATED NEWS [JUNE 3-10]
- BIR STREAMLINES THE PROCESS OF SUBMISSION OF INVENTORY REPORTS & NOTICES THROUGH EMAIL SUBMISSION PURSUANT TO THE IMPLEMENTATION OF THE EASE OF PAYING TAXES LAW ON INVOICING
- BIR AMENDS THE PROCESS OF VERIFICATION OF TIN INQUIRY THROUGH EMAIL
- BIR CLARIFIES THE ANTE-DATING OF DEEDS OF SALE INVOLVING REAL PROPERTIES
- BIR TAX ADVISORY ON THE LIST OF CANNOT BE LOCATED TAXPAYER AS OF MAY 10, 2024
- SUPREME COURT CASES
I. TAX & BUSINESS-RELATED NEWS [JUNE 3-10]
1. SEC voids registrations of ‘religious’ groups
2. SSS unveils rebranded saving schemes with 7.2% returns
3. Tax on sugary drinks needs adjustment — think tank
4. Marcos suspends performance, results-based incentives across bureaucracy
5. Toyota PH warns of ‘potential’ harm to customer privacy
6. DOLE seeks clarification on Sofitel closure
7. MFT Group Cries Foul Over Bank Freeze Order: ‘We Respectfully Disagree’
8. BCDA to close Tarlac landfill; over 100 LGUs to lose dump access
9. Jollibee Multi-Brand Stores to Open in CityMalls
10. Phinma, Anflocor team up for a new cement factory
11. Another Monetary Board member quits
12. Calata found guilty of market manipulation, says SEC
13. Palace declares holidays in 11 areas
II. BIR STREAMLINES THE PROCESS OF SUBMISSION OF INVENTORY REPORTS & NOTICES THROUGH EMAIL SUBMISSION PURSUANT TO THE IMPLEMENTATION OF THE EASE OF PAYING TAXES LAW ON INVOICING
Operations Memorandum No. 29-2024 issued on June 5, 2024, streamlines the process of submission of inventory reports and notices relative to the implementation of the transitory provisions of Revenue Regulations (RR) No. 7-2024 pursuant to Ease of Paying Taxes Act on the conversion of unused Official Receipts/Billing Statement/Statement of Account/Statement of Charges into Invoices/Billing Invoices. Specifically, the BIR will now accept e-mail submission of Inventory Report (for Manual/Loose Leaf) and Notice (for Computerized Accounting System [CAS]/Computerized Books of Accounts [CBA] with Accounting Records [AR]) made by taxpayers through the Taxpayer Registration Related Applications (TRRA) Portal to simplify the process and reduce the number of in-person visits and queueing at the RDO.
It may be recalled that the BIR, prior to the issuance of this Operations Memorandum, only allows taxpayers manual submission of the said reports and notices, in duplicate original copies, until May 27, 2024, or within 30 days from the effectivity of the RR. However, with the aid of this issuance, taxpayers can now have the option to submit either manually (via walk-in) or electronically (via email) through the TRRA Portal. This change also aligns with the BIR’s commitment to ease of doing business and simplifying tax payment procedures.
III. BIR AMENDS THE PROCESS OF VERIFICATION OF TIN INQUIRY THROUGH EMAIL
Revenue Memorandum Order (RMO) No. 20-2024 issued May 29, 2024, amends certain provisions of Revenue Memorandum Circular (RMC) No. 37-2024 regarding Tax Identification Number (TIN) inquiry through electronic mail. Specifically, it provides for work-around procedures to the attending BIR officer on the matter of verification of the information submitted by the requesting taxpayer as against the taxpayer information in the BIR’s Internal Revenue Integrated System-Taxpayer Registration System (IRIS-TRS)/Integrated Tax System-Registration System (ITS-Reg), or in the eTINQuery System before responding to a request for TIN verification through e-mail.
IV. BIR CLARIFIES THE ANTE-DATING OF DEEDS OF SALE INVOLVING REAL PROPERTIES
Revenue Memorandum Circular No. 64-2024, issued on May 28, 2024, addresses the issue of antedating of deeds of sale involving real properties.
Highlights include:
- In case of delay in the presentation of notarized deeds of sale or other transfer documents, the relevant laws and regulations on the kind of tax, rate of tax, zonal or fair market values, effective at the date of notarization shall be applied, but the corresponding penalties and interest for late filing of return and payment of applicable taxes shall be imposed.
- In cases where it is found that the deeds of sale or other transfer documents are ante-dated, the laws and regulations effective at the time of presentation of the deeds of sale or other transfer documents shall be applied. Unless the taxpayer proves otherwise, a deed of sale or transfer document may be considered as ante-dated in the following instances:
2.1 Documents dated before the effectivity of the Capital Gains Tax law;
2.2 Documents dated before the effectivity of the regulations imposing the Creditable Withholding Tax on sales or transfers of real property; and
2.3 Documents dated before the effectivity of the current zonal values as reflected in the latest Revised Schedules of Zonal Values of Real Properties within the jurisdiction of the concerned Revenue District Office.
3. To show that there is no antedating of public instruments, a taxpayer may submit supporting documents such as, but are not limited to, cancelled checks, invoices, contracts to sell, or certifications from the appropriate Clerk of Court or Executive Judge, or the National Archives of the Philippines.
V. BIR TAX ADVISORY ON THE LIST OF CANNOT BE LOCATED TAXPAYER AS OF MAY 10, 2024
In a Tax Advisory issued on May 10, 2024, the BIR has advised taxpayers who Cannot Be Located (CBL) as of May 10, 2024, to come forward to the BIR to clarify their CBL status, update their registered address and/or settle outstanding tax obligations if any. If anyone knows the listed taxpayers, the BIR has advised the public to inform the nearest BIR office. Other taxpayers who have transacted with these CLB taxpayers are also notified that any transaction from the date of publication onwards shall not be allowed as deductible expense/input tax for income and VAT computation pursuant to Revenue Memorandum Circular (RMC) No. 29-2023.
VI. SUPREME COURT CASES
[PUBLIC OFFICIALS MUST BE GIVEN THE OPPORTUNITY TO EXPLAIN ANY PRIMA FACIE APPEARANCE OF DISCREPANCY IN SALN] [THE REPORTING INDIVIDUAL CANNOT BE SUBJECT TO DISCIPLINARY ACTION WITHOUT BEING INFORMED OF HIS OR HER ERRORS OR OMISSIONS] [SALN IS IMPORTANT IN PROMOTING ACCOUNTABILITY & TRANSPARENCY IN THE PUBLIC SERVICE]
Petitioner Department of Finance-Revenue Integrity Protection Service filed a Petition for Review on Certiorari assailing the Court of Appeals (CA)’s earlier Decision and Resolution. Petitioner argued that the CA erred in not imposing the penalty of dismissal from the service, as provided under Republic Act (R.A.) No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees, against the Respondents Uthman Fuentes Mamadra and Rosalinda Pastolero Mamadra (Spouses Mamadra). In ruling, the Court reiterated that the laws on Statement of Assets, Liabilities, and Net Worth (SALN) aim to curtail the acquisition of unexplained wealth. Here, the properties which the spouses Mamadra failed to declare were not alleged nor proven to have been acquired through unexplained sources, or that the values of the said properties were disproportionate to their salaries and other lawful income. Moreover, as correctly argued by the Spouses Mamadra, R.A. No. 6713 does not automatically impose liability on erring public officials or employees. The law and its rules allow public officials to review and fix mistakes in their asset declarations. Here, the Spouses Mamadra were not given the opportunity to amend or correct their SALN, which could have been prevented if they were properly apprised by their office. Notably, in filing their 2014 SALN, the Spouses Mamadra already rectified the alleged inaccuracies in their previous SALNs. Thus, the Court found no error in the CA Decision regarding the non-imposition of the penalty of dismissal from the service. However, the Court did not agree with the CA, finding the Spouses Mamadra guilty of Simple Negligence. Given that the review and compliance mechanism was not complied with, administrative liability for omissions or errors in SALNs will not attach. Hence, the Petition was PARTIALLY GRANTED and the administrative charges against Spouses Mamadra were DISMISSED. [DEPARTMENT OF FINANCE-REVENUE INTEGRITY PROTECTION SERVICE VS. UTHMAN FUENTES MAMADRA & ROSALINDA PASTOLERO MAMADRA, G.R. NO. 255328, DECEMBER 6, 2023, UPLOADED MARCH 26, 2024]
[ADMIN PENALTIES FOR FOREIGN INVESTMENT ACT VIOLATION ARE IMPRESCRIPTIBLE] [LACHES OR ESTOPPEL CANNOT APPLY TO SEC] [ESTOPPELS AGAINST THE PUBLIC ARE LITTLE FAVORED]
Petitioner New Coast Hotel, Inc. filed a Petition for Review on Certiorari assailing the Court of Appeals (CA)’ earlier Decision and Resolution, which affirmed the ruling of the Respondent Securities and Exchange Commission (SEC) holding the Petitioner administratively liable for violation of Republic Act (R.A.) No. 7042, as amended by R.A. No. 8179, or the Foreign Investments Act of 1991 (FIA). Petitioner argued that since the Respondent should have discovered its offense as early as 2005 based on filings it made to the Respondent, it is barred by prescription from acting on their violation. Likewise, the Respondent is barred by estoppel by laches from penalizing their violation of the FIA since it failed to act on the same immediately. In ruling, the Court found that no error was committed by CA when it refused to apply Section 1149 of the Civil Code in determining the prescriptive period for violation of administrative offenses under the FIA. Since there was no specific prescription period provided for FIA violations, the Courts could not impose one. Prescription is a statutory matter, and without a specified period in the law, the violation remained actionable. Also, there is no evidence to support the defense of laches. The elements required for laches are delay,
lack of notice, and prejudice. Laches is an equitable doctrine, and its application is controlled by equitable considerations. Since there was no undue delay or negligence on the part of the Respondent, the defense of laches was not applicable in this case. Consequently, the Petition was DENIED. The CA’s Decision and Resolution were AFFIRMED. Petitioner was held LIABLE for violating the FIA. [NEW COAST HOTEL, INC. VS. SECURITIES & EXCHANGE COMMISSION, G.R. NO. 264667, NOVEMBER 8, 2023, UPLOADED MARCH 18, 2024]
[CERTIORARI IS NOT A SUBSTITUTE FOR A LOST APPEAL] [THE PROPER REMEDY TO QUESTION THE CTA EN BANC’S JUDGMENT IS A PETITION FOR REVIEW ON CERTIORARI UNDER RULE 45 & NOT THROUGH A PETITION FOR CERTIORARI UNDER RULE 65]
Petitioner Hedcor, Inc. filed a Petition for Certiorari assailing the CTA En Banc’s earlier Decision and Resolution which dismissed its claim for refund or tax credit for unutilized input Value-Added Tax (VAT). Petitioner argued that the CTA En Banc committed grave abuse of discretion amounting to lack or excess of jurisdiction in deciding the case based on the Republic Act (R.A.) No. 9513 or the Renewable Act of 2008, which was not discussed during the trial, and that they were unfairly denied a new trial to present evidence. Also, under R.A. No. 9513, purchases by renewable energy developers are automatically zero-rated for tax purposes and do not require prior registration. On the other hand, the Respondent Commissioner of Internal Revenue (CIR) countered that the Petitioner used the wrong legal remedy, and that the CTA has the authority to rule on issues not initially raised. In ruling, the Court resolved to dismiss the Petition. By filing a special civil action for Certiorari under Rule 65 of the Rules of Court to assail the CTA En Banc Decision and Resolution, the Petitioner availed itself of the wrong remedy. The proper remedy to question the CTA En Banc’ s judgment is a Petition for Review on Certiorari under Rule 45. It is settled that a special civil action for Certiorari under Rule 65 of the Rules of Court is proper only when there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. In addition, the issues raised by the Petitioner, although claiming to involve grave abuse of discretion, are clearly for the correction of errors of judgment, not errors of jurisdiction. Where the issue or question involved affects the wisdom of the decision-not the jurisdiction of the court to render the decision-the same is beyond the province of a Special Civil Action for Certiorari. Consequently, the Petition was DISMISSED. [HEDCOR, INC. VS. COURT OF TAX APPEALS & COMMISSIONER OF INTERNAL REVENUE, G.R. NO. 252407, JULY 31, 2023, UPLOADED FEBRUARY 27, 2024]
A PROVISION OF SOCIAL SECURITY ACT OF 1997 ON DISQUALIFICATION OF COMMON-LAW SPOUSE AS PRIMARY BENEFICIARY IS DECLARED VOID
Petitioner Belinda D.R. Dolera, as the surviving spouse of an SSS beneficiary, filed a Petition for Review on Certiorari assailing the Court of Appeals (CA)s’ earlier Decision and Resolution concurring with the Respondent Social Security Commission (SSS) that the Petitioner is not entitled to Survivorship Pension under the Social Security System (SSS) Law. Petitioner argued that the proviso “as of the date of disability” in Section 13-A(c) of the SSS Law (subject proviso), which qualifies the term “primary beneficiaries,” violates the due process and equal protection clauses of the Constitution. The Respondent averred that although Petitioner was the legal spouse of a deceased SSS member, she cannot be considered as a Primary Beneficiary under Section 13-A(c), as their marriage was contracted after her husband became disabled. In ruling, the Court held that the subject proviso violates the equal protection clause of the Constitution. By analogy, the subject proviso may be correlated to the phrase “as of the date of his retirement” in Section 12-B(d), which the Court, in Dycaico case, held as violative of the equal protection clause. Notably, both Sections 12-B(d) and 13-A(c) discriminate against the groups of dependent spouses who married the pensioners after the latter qualified for their pension. The classification espoused by Section 13-A(c) does not rest on real and substantial distinctions and is not germane to the purpose of the law. It discriminates against common-law relationships which are common and recognized by the Family Code. Consequently, the Petition was GRANTED. The proviso “as of the date of disability” in Section 13-A(c) of Republic Act No. 8282 was declared VOID for being contrary to the due process and equal protection clauses of the Constitution. The Respondent was ORDERED to process the claim of the Petitioner for Survivorship Pension. [BELINDA D.R. DOLERA VS. SOCIAL SECURITY SYSTEM, G.R. NO. 253940, OCTOBER 24, 2023, UPLOADED FEBRUARY 15, 2024]
AN ORDER GRANTING A DEMURRER TO EVIDENCE IS A JUDGMENT ON THE MERITS & IS TANTAMOUNT TO AN ACQUITTAL
Petitioner People of the Philippines filed a Petition for Certiorari assailing the CTA 1st Division‘s earlier Resolutions granting the Demurrer to Evidence filed by Private Respondent Eddie Mitra Estallo, Jr., thereby resulting in his acquittal from the charge of violation of Section 255 of the Tax Code, as amended. In ruling, a Demurrer to Evidence is a Motion to Dismiss on the ground of insufficiency of evidence. Since the grant of Demurrer amounts to an acquittal, any further prosecution for the same offense would violate the Accused’s constitutional right against double jeopardy. Nevertheless, jurisprudence provides an exception to the Finality-of-Acquittal Doctrine. The doctrine does not apply when the Prosecution was denied a fair opportunity to be heard, which was not the case here. The Prosecution was able to present all its documentary and testimonial evidence unhindered. Thereafter, it was able to submit not only a Formal Offer of Evidence but also a Supplement thereto, which the CTA carefully weighed and evaluated. Considering that the Prosecution was given all the opportunity to present its case against the Private Respondent, it can be firmly concluded that the trial was not a sham. Thus, the Finality-of-Acquittal Doctrine must prevail in this case. Giving due course to the Petition would defile Private Respondent’s right against double jeopardy. Consequently, the Petition was DENIED. [PEOPLE OF THE PHILIPPINES VS. HON.COURT OF TAX APPEALS & EDDIE MITRA ESTALLO, JR., G.R. NO. 265531, JULY 31, 2023, UPLOADED FEBRUARY 13, 2024]
[FOR UNLIQUIDATED CLAIMS, COMPENSATORY INTEREST STARTS TO RUN WHEN THE DEMAND BECOMES LIQUIDATED] [WHERE THE DEMAND IS ESTABLISHED WITH REASONABLE CERTAINTY, THE INTEREST SHALL BEGIN TO RUN FROM THE TIME THE CLAIM IS MADE]
Petitioners C-E Construction Corporation (CECON) and CP Equities Corporation (CP Equities) filed Consolidated Petitions for Review on Certiorari challenging the earlier Decision and Resolution of the Court of Appeals (CA). Here, CP Equities sought compensation for the damage wrought on its property, the CPJ Building, during the construction of the adjacent BSA Suites by ASB Development Corporation (ASB) and its contractor, CECON. This case does not concern a loan or forbearance of money and falls squarely under paragraph II. (2) of the guidelines in Nacar that when an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially. In ruling, the Court determined that legal interest should be applied at a rate of 6% per annum, beginning from April 18, 2010, the date of the Regional Trial Court (RTC)’s decision, as this is when the demand for compensation became reasonably certain, not from April 15, 1999, the date of extrajudicial demand, because the demand was still uncertain and yet to be liquidated. Regarding the issue of actual damages for the repair of CPJ Building, the Court declined to review, stating that it is a factual issue beyond the scope of the Petition. However, the Court agreed with CP Equities on certain points, including errors made by the CA in its judgment. It reinstated certain amounts awarded by the RTC, which were improperly reviewed by the CA. Consequently, the Petition of CECON was DENIED and the Petition of CP Equities was PARTIALLY GRANTED. [C-E CONSTRUCTION VS. C-P EQUITIES CORPORATION, G.R. NO. 233765 & CP EQUITIES CORPORATION VS. ASB DEVELOPMENT CORPORATION & C-E CONSTRUCTION CORPORATION, G.R. NO. 234184, JULY 5, 2023, UPLOADED FEBRUARY 6, 2024]
SEC voids registrations of ‘religious’ groups [The Manila Times, June 10, 2024]
Acting on petitions from the Manila Police District’s District Intelligence Division, the SEC’s Enforcement and Investor Protection Department (EIPD) found that the two entities — Family of People Loving God Church Inc. and Ang Iglesia ng Makapangyarihang Diyos Inc. — were engaged in unauthorized fundraising and solicitation activities.
SSS unveils rebranded saving schemes with 7.2% returns [Manila Bulletin, June 10, 2024]
The state pension fund unveiled on Monday, June 10, the rebranded program, formerly known as the Worker’s Investment and Savings Program (WISP) and WISP Plus.
https://mb.com.ph/2024/6/10/sss-unveils-rebranded-saving-schemes-with-7-2-returns
Tax on sugary drinks needs adjustment — think tank [The Philippine Star, June 9, 2024]
According to the latest policy brief of the Congressional Policy and Budget Research Department (CPBRD) of the House of Representatives, the initial impact of the SSB tax has diminished due to sustained inflation and ever-changing market dynamics.
https://www.philstar.com/business/2024/06/09/2361364/tax-sugary-drinks-needs-adjustment-think-tank
Marcos suspends performance, results-based incentives across bureaucracy [GMA News Online, June 8, 2024]
President Ferdinand “Bongbong” Marcos Jr. suspended the Results-Based Performance Management System (RBPMS) and Performance-Based Incentive (PBI) System in the government due to duplication and redundancy issues that need to be addressed.
Toyota PH warns of ‘potential’ harm to customer privacy [Philippine Daily Inquirer, June 8, 2024]
In an advisory issued on Thursday night, Toyota Motor Philippines (TMP) said the “unauthorized disclosure” of the data involved “unintentional human error” related to confidential information on “some” of the registered users of the MyToyota mobile app.
DOLE seeks clarification on Sofitel closure [ABS-CBN, News, June 6, 2024]
The Department of Labor and Employment (DOLE) on Wednesday said it would clarify with the management of Sofitel Philippine Plaza Manila whether its looming closure will be for good or temporary.
https://news.abs-cbn.com/business/2024/6/6/dole-seeks-clarification-on-sofitel-closure-1446
MFT Group Cries Foul Over Bank Freeze Order: ‘We Respectfully Disagree’ [Esquire, June 5, 2024]
On Tuesday, news spread that the Court of Appeals had ordered the freezing of the bank, investment, and insurance accounts of the MFT Group of Companies, Inc., the embattled firm led by businesswoman Maria Francesca “Mica” Tan. The resolution, which was promulgated on May 13, also ordered an inquiry into the said accounts, saying that there was “probable cause” that the group’s assets were related to an unlawful activity.
BCDA to close Tarlac landfill; over 100 LGUs to lose dump access [Philippine Daily Inquirer, June 5, 2024]
The BCDA made the remarks two weeks after Capas Mayor Roseller Rodriguez issued a statement opposing the impending closure of the German technology-engineered sanitary landfill in the subvillage of Kalangitan of New Clark City, which is being run by the Metro Clark Waste Management Corp. (MCWMC).
Jollibee Multi-Brand Stores to Open in CityMalls [Spot.Ph, June 5, 2024]
Think cloud kitchen, but for just the Jollibee brands. This means that you can order a lasagna, chao fan, pecho, and a burger steak all at once, and get your party-on-a-tray all together, too. No need to line up several times.
Phinma, Anflocor team up for a new cement factory [Philippine Daily Inquirer, June 5, 2024]
The Del Rosario and Floirendo families are working together to build a cement manufacturing plant in Davao del Norte, which is set to become operational by 2026.
https://business.inquirer.net/462427/phinma-anflocor-team-up-for-a-new-cement-factory
Another Monetary Board member quits [The Philippine Star, June 4, 2024]
Aquino was appointed as MB member in July 2020 together with V. Bruce Tolentino, who also submitted his resignation letter late last week, days after the ghost employee scandal broke out.
https://www.philstar.com/headlines/2024/06/08/2361212/another-monetary-board-member-quits
Calata found guilty of market manipulation, says SEC [Philippine Daily Inquirer, June 4, 2024]
Former publicly listed company Calata Corp. chair Joseph Calata and other officials were found guilty of “misleading and exaggerated” claims over the supposed Mactan Leisure City project, which inflated the firm’s share price exponentially in 2016 following a buying spree.
https://business.inquirer.net/462230/calata-found-guilty-of-market-manipulation-says-sec
Palace declares holidays in 11 areas [The Philippine Star, June 3, 2024]
The holidays were declared in separate proclamations signed on May 27 by Executive Secretary Lucas Bersamin upon the authority of President Marcos.
https://www.philstar.com/nation/2024/06/03/2359889/palace-declares-holidays-11-areas
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