Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 2868

Introduced by the HONORABLE LUIS R. VILLAFUERTE

EXPLANATORY NOTE

The Constitutional principle of expeditious and timely resolution of
justifiable cases has always been one of the primary aspirations of any
judicial system. The Government must endeavor to continuously seek
avenues to further empower judicial entities and quasi-judicial agencies
with the end in view of providing the same with the necessary legislative,
budgetary and logistical support to ensure that the conduct of judicial
actions are not delayed nor denied to anyone.

Corollarily, the Bureau of Internal Revenue (BIR) has been
mandated to be the lead agency in the collection of taxes. Legislative
enactments have been approved by previous Congresses of the
Philippines to provide for such powers and* functions that have been
deemed essential for the justiciable operations of the Bureau. Republic
Act No. 8424, otherwise known as the “Tax Reform Act of 1997”
stipulates that civil and criminal actions and proceedings. executed on
behalf of the Government of the Philippines in matters relating to taxes
and taxation shall be conducted by the legal officers of the BIR. In spite
of the statutory directive of the said Law, it has become the customary
procedure to refer cases to the Department of Justice (DOJ) for the
determination of probable cause and the commencement of the
appropriate legal actions. This is due to the lack of budgetary allocations
that provide for additional manpower and logistical support and the
absence of a clear-cut enabling provision of the law which vests exclusive
Jurisdiction to the BIR in the investigation, prosecution and management


of tax related cases, without need of referring such cases to the DOJ
before they are filed at the appropriate courts.

Efforts by the BIR to pursue its mandate in the collection of taxes
by actively pursuing tax evaders and other tax related cases have been
unceasingly hindered and troubled by the present processes currently
operating in our prosecution system. The practice of referring cases to the
Department of Justice has allegedly given rise to opportunities in the past
for corrupt practices. Scheming taxpayers purportedly connive with
prosecutors of the DOJ to circumvent the law by delaying the resolution of
cases pending before them, or by favoring said taxpayers in their
decisions. In order to avoid such accusations, this bill has been presented
for enactment as a remedial legislation.

With the foregoing premises considered, this proposed legislative
measure seeks to amend Republic Act 8424 to enable, empower and
authorize unequivocally the legal officers of the BIR, with the approval of
the Commissioner of Internal Revenue, to exclusively investigate,
prosecute, file and handle all cases and issues related to tax and taxation.
It also seeks to simultaneously provide the Department of Finance the
power and right to review every criminal complaint before proper cases
are filed in the courts.

With the end in view of eliminating alleged avenues for collusion
and corruption and eradicate bureaucratic red tape, and providing the
appropriate agency of government the necessary assistance and support
to further improve on the delivery of its services and the performance of
its obligations, the immediate passage of this bill is earnestly favested.

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Man Jus
LUIS R. pune ERTE

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson Civ

FIFTEENTH CONGRESS
First Reguiar Session

Be it enacted by the Senate and the House of Representatives in Congress
assembled:

AN ACT
MANDATING THE BUREAU OF INTERNAL REVENUE TO
EXCLUSIVELY INVESTIGATE, PROSECUTE AND HANDLE TAX AND
TAX RELATED CASES, AMENDING SECTION 220, CHAPTER II,
TITLE VIII OF REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS
THE “TAX REFORM ACT OF 1997,” AND FOR OTHER RELATED
PURPOSES

Section 1. Section 220, ChapterJI, Title VIII of Republic Act No. 8424,
otherwise known as the “Tax Reform Act of 1997,” is hereby amended to
read as follows:

“Sec. 220. Form (and Mode) of Proceeding in Actions Arising
under this Code. - Civil and criminal actions and proceedings
instituted in behalf of the Government under the authority of this
Code or other law enforced by the Bureau of Internal Revenue shail
be brought in the name of the Government of the Philippines and
shall be (conducted) INVESTIGATED, PROSECUTED AND HANDLED
EXCLUSIVELY by legal officers of the Bureau of Internal Revenue
but no civil or criminal action for the recovery of taxes or the


enforcement of any fine, penalty or forfeiture under this Code shall
be filed in Court without the approval of the Commissioner. FOR
THIS PURPOSE, NO REFERRAL BY THE BUREAU OF INTERNAL
REVENUE TO THE SOLICITOR GENERAL, THE DEPARTMENT OF
JUSTICE OR ANY GOVERNMENT AGENCY NEED BE MADE IN
CONNECTION WITH A CIVIL OR CRIMINAL ACTION HANDLED BY
THE LEGAL OFFICERS OF THE BUREAU OF INTERNAL REVENUE.
THE BIR SHALL HAVE EXCLUSIVE AUTHORITY TO FILE ANY CIVIL
OR CRIMINAL CASE DIRECTLY WITH THE PROPER COURT FOR THE
RECOVERY OF TAXES OR ENFORCEMENT OF ANY FINE, PENALTY OR
FORFEITURE UNDER THIS CODE: PROVIDED THAT THE
DEPARTMENT OF FINANCE MAY HAVE THE POWER TO REVIEW
EVERY CRIMINAL COMPLAINT BEFORE IT IS FILED IN COURT.”

Section 2. Repealing Clause. - All laws, orders, issuances,

circulars, rules and regulations or parts thereof, which are inconsistent
with the provisions of this Act are hereby repealed or modified
accordingly.

Section 3. Separability Clause. - If any provisions of this Act is

declared unconstitutional or invalid, other parts or provisions hereof not
affected shall continue in full force.and effect. ~

Sectibn 4. Effectivity.-This Act shall take effect after fifteen (15)

days following its publication in at least two (2) newspapers of general
circulation.

Approved,