Tax Articles

Strengthening the Taxpayers’ Bill of Rights

By Atty. Rodel C. Unciano

IN tax investigation cases, it is undisputed that our existing tax laws and regulations provide taxpayers some sort of remedies in contesting such assessment cases. Taxpayers may avail themselves of the bundle of rights and remedies primarily provided under the National Internal Revenue Code (NIRC) of 1997, as amended, for internal revenue tax investigation cases; the Customs Modernization and Tariff Act (CMTA) for customs cases; and the Local Government Code of 1991 for real property and local tax cases. Of course, taxpayers may, likewise, invoke the Bill of Rights guaranteed under Article III of the Philippine Constitution.

However, our laws protecting taxpayers’ rights seem to be inadequate. According to a study, certain individuals have been subjected to harassment by some officials and employees of the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), including the filing of undue and baseless complaints, resulting to embarrassment and humiliation on the part of taxpayers. Thus, Senate Bill 1163, or The Taxpayer Bill of Rights Act, is being proposed to strengthen the taxpayers’ Bill of Rights.

Introduced by Sen. Ralph G. Recto, the bill is divided into three main pillars: a) taxpayers basic rights, b) taxpayers’ rights in civil cases, and c) taxpayers’ rights in criminal cases. Interestingly, the bill, likewise, seeks to create the Office of the National Taxpayers Advocate, which is envisioned to assist taxpayers in resolving problems with the BIR and BOC, among others. The Office of the National Taxpayers Advocate shall be under the administration and supervision of an official to be known as the National Taxpayer Advocate, and shall be attached to the Office of the President for administrative purposes only.

Senate Bill 1163 seeks to require all revenue officers and agents to undergo regular training and evaluation on a variety of job standards, including customer relations, to ensure that they fully explain to taxpayers their rights under the law. The bill seeks to strengthen the taxpayers’ right to obtain simple, nontechnical statements, including the right to be provided with a narrative description explaining the basis of audit, proposed assessments and denials of refunds. Further, the bill proposed to require the revenue examiners and officers to state the consequences of the taxpayer’s failure to comply with notices.

The bill, likewise, seeks to provide taxpayers right to privacy as guaranteed by the Constitution, and the right to have the taxpayer’s tax information kept confidential. It guarantees the taxpayers right to have any case or proceeding to be devoid of publicity, whether through radio, television, newspaper or any alternative media, while said case or proceeding is pending.

Other basic taxpayers’ rights that the bill intends to safeguard include the right to request for installment payment of tax liabilities under any compromise settlement or any assessed tax liabilities, the right to recover attorney’s fees and litigation costs for tax assessments made without substantial justification, and the right to have the BIR begin and complete its audits in a timely and expeditious manner.

Any person or public official who is found to have violated the taxpayers’ rights shall be punished with imprisonment of not less than six years nor more than 12 years and a fine of not less than P100,000 but not more than P500,000.

I note that the bill seems to limit the scope to BIR and Customs tax investigation cases. The taxpayers’ rights provided therein, likewise, find significance in real-property tax and local tax assessment cases issued by different local government units. I hear of many local tax assessment stories where local tax authorities unjustifiably refuse to accept tax payments lower than payments made in the prior years, despite clear proof of lower gross receipts generated during the year under investigation as compared to prior year’s receipts. Taxpayers are being forced to pay undue tax assessments, just for the sake of being able to secure their business permits and to avoid disruption of their business operations. This is a clear harassment that should stop.