Court junks BIR plea vs ADB execs’ exemption

The Court of Appeals has dismissed the Bureau of Internal Revenue’s (BIR) appeal against an earlier court ruling that upheld the exemption from payment of income taxes of the Filipino employees of the Asian Development Bank (ADB).

In a July 3 decision, the court said the BIR had “improperly elevated” the case to the appellate court by ordinary appeal when it should have been raised by petition for review on certiorari before the Supreme Court under Rule 45 of the Rules of Civil Procedure.

The BIR had elevated to the appellate court the Jan. 9 ruling of Judge Carlos A. Valenzuela of Mandaluyong City Regional Trial Court Branch 213, which denied the motion for reconsideration it filed against the lower court’s decision last September that a section of a circular the BIR issued in 2013, which the agency had used as the basis for running after allegedly tax-deficient ADB employees, was “void for being issued with no legal basis, in excess of authority, and/or without due process of law.”

Appellate court Justice Agnes Reyes Carpio, who wrote the July 3 decision, said that since the case before it did not call for a review of the evidence, the issue involved a question of law.

“It is admitted that the ADB was established through the ADB charter and the same provided for tax exemptions of its employees.