On Henares’s selective tax probe

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Emeterio Sd. Perez

Emeterio Sd. Perez

Due Diligencer is reprinting the letter of one Othello Dalanon, who identified himself as a certified public accountant, to the piece Henares’s sin of omission,” which appeared in this space on October 29:“I have read your column captioned Henares’s sin of omission [The Manila Times, October 29, 2013].

“I certainly agree with your assertions that the BIR [Bureau of Internal Revenue] might have inadvertently erred in coming up with its bases in ascertaining top individual taxpayers. It might have not considered all aspects of taxes classifiable under ‘income tax,’ like:

“[1] the tax imposed upon the sale of real properties classified a capital assets though in effect is a final tax and characterized as capital gains tax, yet it is an income tax;

“[2] the final tax on cash and/or property dividend (except stock dividend which is not subject to tax) actually or constructively received by an individual though characterized as final tax on passive income, yet it is also an income tax;


“[3] the tax on the sale, transfer or other disposition of shares of stock made by an individual which is also a final tax and characterized as capital gains tax, the same is likewise classified as income tax; and

“[4] the taxes on other passive incomes such as, but not limited to: interests, royalties if any, etc., are also classified as income tax.

“The gains presumed to have been realized or incomes arising from these taxable activities are, in fact, required to be reflected in the Annual Income Tax Return [AITR] starting with the year 2010 as per Revenue Regulations No. 2-2011 dated March 1, 2011 promulgated by the BIR under the present dispensation. Hence, taxes paid on income earned or gains presumed to have been realized from these activities should form part of the ‘income taxes’ actually paid by an individual for a particular period, and should therefore be included as bases for determining the top individual taxpayers for such period.

“Another omission which the tax agency head may have committed is when she promulgated Revenue Regulations No. 6-2013 dated April 11, 2013, regarding valuation of shares of stock classified as capital assets, which provisions may have gone beyond the terms and provisions of the Tax Code. I even sought for clarification of these regulations in my letter to her dated June 1, 2013, but the BIR has not clarified it yet. Recently, I learned that some organizations have executed and filed a joint petition or request for the withdrawal of the same.

“Another misleading assertion of the BIR chief is when she made the public believe an impression that she is a ‘tax-evader-buster commissioner’ in the history of the tax agency, by saying that in her agency’s ‘crackdown against tax evasion’, it is not excusing any sector or personality [big or small, high-profile personality or not]from being audited. She likewise asserts that the BIR would cover all sectors and personalities, and no one would be left behind in its chase after tax dodgers.

“I can say that its ‘crackdown against tax evasion’ is not a real reality. There is no truth to the perception that the agency’s axe is aimed against all sectors and personalities [big or small, high-profile personalities or not]in its chase after tax cheats, because I very well know of a multimillion tax evasion case, involving a popular entity that belongs to the high-profile business in the Philippine industries, which the tax agency did not push through.

“If it would be okay with you sir, I may share with you information regarding this multi-million tax evasion case to support my disbelief to the agency’s much-vaunted Run After Tax Evaders [RATE] program.”

What a piece! For the information of Dalanon, Due Diligencer also believes that Henares’s campaign against tax evaders may be selective. Does Henares really believe she could go after certain individuals without the blessing of Malacañang’s chief temporary occupant?

Again, thank you for reading The Manila Times.

esdperez@gmail.com

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2 Comments

  1. santiago caisido on

    I am also a CPA (Retired) I agree with Mr. Delanon because I never heard of any tax probe against any politician with the exception of those against the administration. Dapat lahat ng senador, congressman, at myembro ng KKK ang unahin ni henares.

  2. It would have been better had your Tax Accountant named names of high profile pending tax cases filed or not. Of course filing tax cases in any administration are inherently selective unless the people cries foul. And yes the enumerated final taxes transactions are income taxes. However, except for final taxes on continueus savings and/or time deposits and rental incomes all the rest are isolated income transactions.