FILE PHOTO: Albay Rep. Joey Salceda
The Bureau of Internal Revenue (BIR) should explain the canceled Megaworld Corp. closure order because it weakens business confidence, according to reelected Albay Rep. Joey Salceda, chair of the House tax committee.
“The exercise was so arbitrary, with a very strange scheduled press conference. And that does nothing for business confidence—that you can close a publicly listed corporation over an audit disagreement so drastically,” Salceda said.
“One can’t avoid but think that it was a ‘settle this or else’ exercise on the part of BIR,” he said.
According to Salceda, tax authorities need to be “more transparent, more professional, and more by-the-book about the tax system and our instruments of enforcement.”
He issued the statement on Wednesday after the BIR suspended the closure order against Megaworld, which was scheduled on the same day based on a media advisory released by the tax agency.
The BIR said the closure order was “held in abeyance until further notice.”
Megaworld explained that it had no outstanding tax liabilities and the closure order was only due to an “initial disagreement” over jurisdiction that had since been clarified.
While the government needs revenues and should punish businesses that refuse to pay taxes correctly, Salceda said a closure order on the basis of a protest over jurisdiction seemed overboard.
He said he also wanted to know from the Department of Finance, especially the Revenue Operations Group, whether they knew it was going to happen and to what extent.
“Because it creates the impression that the BIR will twist your [arm] if you don’t agree with it—and businesses that are smaller than Megaworld will get the wrong signal. If they can do that to a big elephant, what can they do to smaller businesses?” he said.
The lawmaker called for better tax audit rules and transparency to avoid conflict between tax authorities and taxpayers.
“We also need a fully electronic system of filing, and a more transparent and more rules-based dispute resolution mechanism between the BIR and the taxpayer,” he added.
Salceda said he hoped presumptive president Ferdinand Marcos Jr. would prioritize the ease of paying taxes bill.
“When the tax system is more rules-based and transparent, you avoid bizarre incidents like this,” he said.
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