“Rest assured that we are conscious of the rights of taxpayers and we will make sure that these are protected.  However, when the Tax Code mandates a particular tax treatment, then that should be implemented even if this may be harsh for the affected taxpayers,”  BIR Commissioner Tan-Torres emphasized.

The Bureau of Internal Revenue clarified that the process it undertook in the revision of its position on the imposition of excise tax treatment of the importation of catalytic cracked gasoline (CCG) by Pilipinas Shell Corporation was allowed by law and done in the discharge of its mandate.

“We agree with the recent pronouncement of the Philippine Chamber of Commerce and Industry (PCCI) that we have the authority and right to issue interpretation of the tax law and rules.  Thus, we came out with a new position on the taxation of CCG imported by Pilipinas Shell when we received new information from the Bureau of Customs regarding the importation of the CCG which was not considered in the previous BIR position of exemption of this product.

This information clearly established the basis for imposing the excise tax on Pilipinas Shell,” BIR Commissioner Joel Tan-Torres commented in response to the PCCI stand on this tax issue.

Commissioner Tan-Torres added, “However, we would also further clarify that the retroactive imposition of this excise tax was done by the Bureau of Customs (BOC), which has been deputized by the BIR in the implementation and collection of internal revenue taxes due on importation. There are legitimate instances when a retroactive imposition of tax can be done and I believe that the BOC took this into account when they acted on this matter.”

PCCI has questioned the retroactive application of the imposition of the excise tax on the importation of Pilipinas Shell saying that it is a dangerous precedent and will scare away potential investors. Similar concerns have been raised by the European Chamber of Commerce in the Philippines and the Employers Confederation of the Philippines.

“Rest assured that we are conscious of the rights of taxpayers and we will make sure that these are protected.  However, when the Tax Code mandates a particular tax treatment, then that should be implemented even if this may be harsh for the affected taxpayers,”  BIR Commissioner Tan-Torres emphasized.