LRT operator loses 2 tax cases

The Light Rail Transit 1. INQUIRER FILE PHOTO

The Court of Tax Appeals (CTA) has ordered the state-run Light Rail Transit Authority (LRTA) to pay at least P5.17 million in taxes for the year 2006.

In a separate development, the tax appellate court en banc also affirmed the dismissal of LRTA’s case questioning the Bureau of Internal Revenue’s effort to collect P9.28 million in taxes for the year 2003.

The CTA First Division, in a 21-page decision dated Oct. 3, denied LRTA’s contention that the interest on its 2006 expanded withholding taxes (EWT) should have been abated on the ground that it was due to an erroneous written official advice by the BIR.

LRTA claimed that it was made to believe that by paying P4.75 million of the basic EWT demand in March 2012, the corresponding interest would be waived by the BIR.

But the tax court said LRTA did not present the supposedly misleading written advice by any revenue officer.The court also noted that only the BIR commissioner has the discretion to approve tax abatements.

Because of this, the LRTA still has to pay the remaining basic tax of P181,296.60 plus 25 percent surcharge, as well as a P4.94-million penalty (representing the 20 percent deficiency interest on the belatedly paid P4.75 million).

The court also imposed a 20 percent deficiency interest on the remaining P181,296.60 basic EWT, a 25 percent delinquency interest on the amount of P226,620.75 (the sum of the basic EWT and the 25 percent surcharge), and a 20 percent delinquency interest on the P4.94 million penalty that accrued from the late payment of basic tax.

The decision was penned by Associate Justice Cielito N. Mindaro-Grulla, with the concurrence of presiding Justice Roman G. del Rosario and Associate Justice Erlinda P. Uy.