Quezon City, 08 January 2010 – In a landmark decision promulgated last December 2009, the Court of Tax Appeals (CTA) ordered the City Government of Makati to pay the Bureau of Internal Revenue (BIR) more than P1.2 Billion in deficiency taxes.
In a CTA Decision dated December 16, 2009, the CTA dismissed the Makati City Government’s Petition for Review, and ordered them to pay the BIR the amount of P1,046,833,846.08 and P217,807,339.66, representing its deficiency taxes for taxable years 1999 to 2001, and taxable years 2002 to 2004, respectively.
The Makati City Government had originally been issued an assessment by the BIR’s Makati Regional Office for deficiency Withholding Taxes on Compensation, Expanded Withholding Tax, Value-Added Tax and Withholding Tax on VAT for the years 1999 to 2004. The City Government filed a protest against this assessment, which was subsequently denied by the BIR Regional Office. Such denial was then appealed by the City Government, only to be denied once again by the Makati Regional Office. A Petition for Review was thus filed by the City Government with the CTA, requesting the reversal of this latter Decision.
The CTA’s dismissal of the Petition for Review was due to the City of Makati’s failure to appeal within the reglementary period before the said Court the assessment in question. Considering that the Final Decision on Disputed Assessment (FDDA) issued by the Makati Regional Office on October 16, 2003 was not protested by the taxpayer before the Commissioner, the FDDA thus became the BIR’s final decision on the matter and is considered to be final, executory, demandable and unappealable.
BIR Commissioner Joel L. Tan-Torres said, “We will follow the provisions of the Tax Code and implement the decision of the CTA by demanding the payment by the Makati City Government of the taxes that have long been due since 1999. This will help our tax collection efforts for 2010.”