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3 - LG Electronics V CIR

The document discusses a tax case regarding whether LG Electronics Philippines was entitled to tax amnesty privileges under Tax Amnesty Act of 1997. It finds that LG properly availed itself of tax amnesty by paying the correct amount and submitting required documents. Tax assessments that are disputed administratively or judicially are covered by tax amnesty, except cases with final court judgments. Since LG's case was not final, it was eligible for tax amnesty. The notes further discuss the nature and role of tax amnesties, as well as rules regarding administrative agencies and representation in appellate tax proceedings.

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Xyvie Dianne D. Daradar
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68 views2 pages

3 - LG Electronics V CIR

The document discusses a tax case regarding whether LG Electronics Philippines was entitled to tax amnesty privileges under Tax Amnesty Act of 1997. It finds that LG properly availed itself of tax amnesty by paying the correct amount and submitting required documents. Tax assessments that are disputed administratively or judicially are covered by tax amnesty, except cases with final court judgments. Since LG's case was not final, it was eligible for tax amnesty. The notes further discuss the nature and role of tax amnesties, as well as rules regarding administrative agencies and representation in appellate tax proceedings.

Uploaded by

Xyvie Dianne D. Daradar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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FACTS:

On March 21, 1998 petitioner LG Electronics Philippines, Inc. (LG) was assessed
deficiency income tax for the taxable year of 1994. It filed administrative protest with the
Bureau of Internal Revenue against the tax assessment claiming that the assessment
did not have factual and legal bases.

LG filed a Petition for Review before the Court of Tax Appeals then raised the issue to
the Supreme Court. Meanwhile, LG availed itself of the tax amnesty provided under
Republic Act No. 9480.

ISSUE:
Whether or not petitioner LG Electronics Philippines, Inc. is entitled to the immunities
and privileges granted under Tax Amnesty Act of 1997.

RULING:

Yes. LG has properly availed itself of the tax amnesty under RA No. 9840 by paying the
correct amount and submitting the required documents. LG’s completion of the
requirements and compliance with the procedure laid down in the law and the
implementing rules entitled it to the privileges and immunities under the tax amnesty
program.

Moreover, tax assessments that are disputed administratively or judicially are still
covered by the tax amnesty law except those cases excluded from the coverage of the
law like tax cases subject of final and executory judgments by the courts. The present
case has not become final and executory when LG availed of the tax amnesty program.

NOTES:

Nature of a tax amnesty

A tax amnesty is a general pardon or the intentional overlooking by the State of its
authority to impose penalties on persons otherwise guilty of violation of a tax law. It
partakes of an absolute waiver by the government of its right to collect what is due it
and to give tax evaders who wish to relent a chance to start with a clean slate. A tax
amnesty, much like a tax exemption, is never favored or presumed in law. The grant of
a tax amnesty, similar to a tax exemption, must be construed strictly against the
taxpayer and liberally in favor of the taxing authority.

What is the role of tax amnesties in the government’s collection of taxes?


Tax amnesty is a general pardon to taxpayers who want to start a clean tax slate. It also
gives the government a chance to collect uncollected tax from tax evaders without
having to go through the tedious process of a tax case.

Rule-making power of administrative agencies


While tax amnesty, similar to a tax exemption, must be construed strictly against the
taxpayer and liberally in favor of the taxing authority, it is also a well-settled doctrine that
the rule-making power of administrative agencies cannot be extended to amend or
expand statutory requirements or to embrace matters not originally encompassed by the
law. Administrative regulations should always be in accord with the provisions of the
statute they seek to carry into effect, and any resulting inconsistency shall be resolved
in favor of the basic law.

BIR’s representation in appellate proceedings


The institution or commencement before a proper court of civil and criminal actions and
proceedings arising under the Tax Reform Act which “shall be conducted by legal
officers of the Bureau of Internal Revenue” is not in dispute. An appeal from such court,
however, is not a matter of right. Section 220 of the Tax Reform Act must not be
understood as overturning the long established procedure before this Court in requiring
the Solicitor General to represent the interest of the Republic. This Court continues to
maintain that it is the Solicitor General who has the primary responsibility to appear for the
government in appellate proceedings.

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