BIR's Dulay Might Have Taken Advantage Of The President's Inexperience In Taxation

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BIR's Dulay might have taken advantage of the President's inexperience in taxation.


President Duterte honestly admitted that he has a little understanding about taxation that is why he just relies on the expertise of the BIR chief. But he might have been misinformed about compromise settlement of taxes. Perhaps Dulay made the President believe that all taxes may be compromised at the discretion of the Commissioner alone, to make it appear that the settlement of Cosmos's P3.76B for only P51M was aboveboard.

It's a BIG NO because the tax code also limits the authority of the Commissioner. Of course the President has no more time to look into the details of the provisions of the tax code but just again rely on what his tax expert friend Dulay would relay to him.

While Section 204(A) of the NIRC, as amended, empowers the Commissioner to abate or compromise taxes, it at the same time limits the Commissioner's authority to compromise by categorically stating that - "where the basic tax involved exceeds One million pesos (P1M) or where the settlement offered is less than the prescribed minimum rates, the compromise shall be subject to the approval of the Evaluation Board."

The Commissioner cannot arrogate to himself the power vested in the Evaluation Board.

In Cosmos’s case, the amount involved was P3.76 BILLION and the amount of settlement was only P51 million which is only a little over one (1%) percent of the entire deficiency tax assessment - Oh my Dulay!

Considering that the amount involved is more than P1 million and the settlement was extremely below the prescribed minimum rate of at least 40% of the basic tax assessed, the approval of the Evaluation Board was imperative.

Since the settlement or Amended FDDA bearing on the grossly reduced tax deficit of Cosmos for only P51 million was without the approval of the Evaluation Board, the settlement was invalid. This was clearly stated in the Final Resolution promulgated by the Court of Tax Appeals (CTA Case No. 9405 dated 25May17).

Dalanon was relayed the information that the Evaluation Board did not approve the Amended FDDA or the settlement because it was not in consonance with existing tax laws, rules and regulations. And therefore, illegal.

Another trick which Dulay might have relayed to the President in order to avoid accountability was that he was abroad on medical leave when the settlement of Cosmos's tax liabilities ensued - a shallow reason. He might have told the President that it was the then OIC-Deputy Commissioner Nestor Valeroso who allowed the settlement.

While it is correct that it was Valeroso who signed the Amended FDDA, it does not exonerate Dulay from direct participation in the anomaly being the Commissioner empowered to abate or compromise taxes though subject to the approval of the Evaluation Board. Valeroso, having been with the Bureau for 37 years, knew that it was not within his authority to Amend an FDDA. Surely, he succumbed to extreme pressures from a superior authority that he was made to sign the Amended FDDA. And Dulay was his direct boss.

And the rest is BIR (Billy Internal Robbery).

Othello Dalanon
Former BIR Director

#Justice4OthelloDalanon
#PresidentRodrigoRoaDuterte

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