House questions BIR P65M agreement with Del Monte

House Speaker Pantaleon Alvarez and members of the committee on ways and means have questioned the process by which the Bureau of Internal Revenue (BIR) entered into a compromise agreement with Del Monte Philippines Inc. involving its tax liability for 2011, 2012 and 2013 amounting to P8.7 billion but which was reduced to a settlement of P65 million.

In a hearing conducted by the committee chaired by Rep. Dakila Carlo Cua (Lone District, Quirino), the Speaker said the transaction was done without even passing through the Office of BIR Commissioner Caesar Dulay for review and approval.

Yung ganyang kalalaking (assessment) reduction, may pirma ka (Commissionerr Dulay) dapat duon dahil hindi yan maliit na pera. Kailangan talaga Commissioner ang mag-review. Kung talagang dapat i-reduce yan, payagan ang reduction na yan. So hindi pwedeng hugas kamay, di ba? Kasi Commissioner ka, nilagay ka dyan para ayusin na maganda ang takbo ng BIR. Tapos tanungin ka namin di mo alam dahil hanggang duon sa Assistant Commissioner (mo lang umabot ung assessment review and approval). Aba, may problema tayo dyan, said Alvarez.

Alvarez said during the past administration, the BIR did not decide on the Del Monte case. But the settlement was made possible during the present administration under the new BIR leadership.

Kasi three years yan, walang ginawang decision si Commissioner Henares. And then suddenly nung pumasok si Commissioner Dulay biglang napabilis yung transaction. And from P8.7 billion pumayag na lang siya na bayaran ng P65 million, said Alvarez.

Alvarez also called on the BIR to improve its procedures to ensure speedy assessments of tax liabilities. May we suggest that you change your procedure. Yung mga assessment kung pwede wag ninyong patagalin. Decide on it immediately. If it needs to be reduced and there is basis, then reduce it. Wag yung di pinayagan ng nakaraang administrasyon, nung pagpasok ang administrasyong ito bigla ninyong pinayagan, ang bilis bilis ng transaction, eh mukhang may golden hands dyan. May bright talagang consultant dyan, said Alvarez.

The Speaker also asked Dulay how many protested cases similar to those of Del Monte have been pending in the BIR since Dulay took over.

He also asked Assistant Commissioner Teresita Angeles of the Large Taxpayers Service to submit to the committee a list of the protested assessment cases and how much amount was reduced to the detriment of the government.

Ilang kaso ang may assessment na ganito at magkano yung binayaran para makita natin magkano agrabyado ang gobyerno, said Alvarez.

Kasi, nandito nga tayo para protektahan ang interes ng gobyerno. Meron kayong pinapasa sa amin na tax reform bill na tumulong kaming pumasa yan. Pero hindi naman maganda na may mabalitaan kaming ganito. May assessment na P8.7 billion at papayag lang kayo i-settle ung P65 million. Ang laki nun. Isang kaso pa lang yun, eh kung marami yun? Kaya gusto naming alamin at gusto naming i-exercise ung oversight function ng Congress. Hindi ninyo pwedeng itago yan, said Alvarez.

The lists required by Alvarez include the assessment for years 2011, 2012, 2013, 2014 and 2015 covering all large taxpayers.

Cua said the lists should also include cases already settled with the reduced assessment rates covering 2016 and 2017. .Yung pag-sara, assessment until 2015. It may be assessed as far back as 2011, yun ung point ni Speaker. Like in this case, as far back as 2011 yung assessment sa Del Monte, 2017 ung settlement, so it expands six years, said Cua.

Cua explained the briefing or hearing was conducted so that the committee will be well-informed of the procedural practices of the BIR as they execute its mandate.

Rep. Rodel Batocabe (Party-list, AKO-BICOL) said it is an inherent function of the committee to inquire on anything that the committee has jurisdiction. It has a power of oversight, any member of the committee can ask questions. The province of Congress is to legislate, craft remedial measures in order to solve any problem that may be determined in the investigation, said Batocabe.

Batocabe said based on the answers of Dulay, the BIR should really provide the parameters or the standards so that the public will know who should be held liable for any reckless reduction of assessment.

Let us hold liable the personnel who will recklessly, wantonly assess for the sake of assessment, said Batocabe.

Dulay explained that the case involving Del Monte was not a compromise settlement but a protested assessment case. He said the case did not pass through his office because under the present BIR procedures, it is the Assistant Commissioner for Large Taxpayers Service who should review and approve protested assessment cases.

With due respect your Honor, in the assessment and collection process with the BIR, we follow the Tax Code and the procedures set out and revenue regulations, said Dulay.

Dulay said he respects the Speaker's suggestion that the BIR should adopt the policy for the Office of the Commissioner to be able to look at and put some parameters and figures on the amount of reduced assessment, if it comes to billions.

I think the point is well taken, that we should adopt a new policy on that, Dulay said.

He also said he is not washing his hands of the Del Monte assessment case. With due respect, wala po akong hugas kamay dito because the present procedure is that the present assessment of Del Monte did not have to pass the Office of the Commissioner. Now if the recommendation is to have it pass through the Office of the Commissioner, then we will study it also, said Dulay.

The Speaker said the BIR should not just study his proposal. Don't study it, do it, he said.

Angeles said she approved the transaction with Del Monte under the authority of the Commissioner which was delegated to her.

Asked by the Speaker to comment on the assessment on Del Monte, Angeles said she deemed the assessment right as it was the result of review and evaluation of pertinent documents.

Angeles said every year from 2011 to 2013, Del Monte filed a protest on the assessment.

She said the Del Monte account was transferred from the LTD-Makati to the LTD-District Office Davao because it caters to all large taxpayers in the entire Mindanao, including Del Monte.

Source: House of Representatives

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