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Dominguez stops BIR special audit over Megaworld tiff

This is a victory aligned with the Ease of Doing Business Act, BSP’s Digital Transformation Roadmap and National Strategy for Financial Inclusion

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Dominguez intervention halted a possible tax crisis. | Photograph courtesy of DoF

The Department of Finance has clipped the powers of the Bureau of Internal Revenue (BIR) from creating special audit task forces after the taxman’s latest tiff for “wanting to take it all” from property developer giant Megaworld.

On orders from Finance Secretary Finance Carlos Dominguez III, BIR Officer-in-Charge (OIC) Deputy Commissioner Marissa Cabreros suspended revenue special orders (RSO) and operations memoranda (OM) that created the special task forces. The suspension is to prevent duplication of functions of BIR offices and avoid confusion among taxpayers.

“The functions and responsibilities of the different units in the BIR are provided in revenue administrative orders (RAOs) issued by the Secretary of Finance, upon the recommendation of the Commissioner,” Dominguez said. “The issuance of the RSO and OM has distorted this and even caused uncertainty for some taxpayers,” he added.

Cabreros issued the order on Friday directing all revenue officers nationwide to stop the special audit task forces on real estate developers and direct selling or multi-level marketing companies.

The BIR also issued similar OM to create task forces against Philippine offshore gaming operators (POGO) and electronic sabong (e-sabong).

Also, on Friday, the BIR-National Capital Region issued a separate statement insisting it has jurisdiction to implement close order against Megaworld Corporation in line with the auditing on the sale of some of its properties.

It said the enforcement activity, which was scheduled y last 18 May, was “supported by a Revenue Special Order signed by the Commissioner of Internal Revenue.”

It said, “the investigation involves the verification of taxes on One-Time Transactions (OneTT) on the sale/transfer of properties by Megaworld.”

“Although Megaworld is considered a large taxpayer under the jurisdiction of the Large Taxpayers Service, 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,” it said.

But Dominguez reminded the BIR that all existing audits and investigations under the RSO and OM should be handled by the revenue district offices or unit/s in the BIR where the concerned taxpayers are registered.

“We are working with the BIR to review these issuances and ensure these do not create redundancies and cause taxpayer confusion,” Dominguez said. “If found to be in violation of our RAO, these issuances should ultimately be revoked by the BIR.”

In line with this, all field audits and other field operations under the task forces authorized to conduct examinations and verifications of taxpayers’ books of account, records and other transactions were also suspended.

As such, no field audit, field operations, or any form of business visitation in the execution of any letter of authority/audit notices, letter notices, or mission orders should be conducted by the task forces.

The RSOs and OM allowed revenue officers to secure and conduct an examination of books of accounts, papers, records and other documents and issue letters of authority in connection with the task force’s audit or investigation.

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