Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 2692

Introduced by HONORABLE DANILO E. SUAREZ

EXPLANATORY NOTE

One of the major stumbling blocks in our judicial system is the delay in the resolution of tax
cases. This issue’ not only delays bringing to justice known tax evaders, but also adversely
affects the collection efforts of the government's main revenue generating agency - the
Bureau of Internal Revenue (BIR). For every day a tax case remains unresolved, it costs the
government millions of pesos, all of which rightfully belong to our nation’s coffers. Data
from the BIR show that as of 2008, a total of 678 refund and assessment cases are pending
with the Court of Tax Appeals and the DOJ. The total amount due involved in refund cases
amount to Php 26.43 billion, while the pending assessment cases involve Php 77.15 billion.
Allin all, these cases involve amounts reaching more than Php 100 billion, a very substantial
amount that should properly belong to the government.

This bill seeks to address the impediments in the resolution of tax cases filed by lawyers of
the BIR. It is not disputed that the current procedure in filing tax cases suffers from several
problems which contribute in the delay of resolving such cases. While it is admitted that the
problem cannot be solved overnight, this proposed measure addresses one specific
problem, namely the removal of an additional layer in filing tax cases with the Court of Tax
Appeals.

The prosecution of tax cases can be best handled by the tax lawyers themselves ~ those who
have gathered, and have access to, sufficient evidence to recover tax collection deficiencies.
The possibility of graft and corruption may also be reduced, since the BIR lawyers, being
attritable under’ the Attrition Act, would be motivated to recover taxes which rightfully
should be included in the total revenue collection of the Bureau. With this bill, the BIR
would be able to focus its resources in the litigation of tax cases involving known tax
deficients and evaders to improve its collection.

This bill, if approved, will shorten the tedious process of filing tax cases. This would hasten
the resolution of tax cases and therefore improve the collection efforts of the BIR.

Chu)

DANILO E. SUAREZ
Representative
3 District, Quezon


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

. FIFTEENTH CONGRESS
First Regular Session

House Bill No. 2692

Introduced by HONORABLE DANILO E. SUAREZ

AN ACT GRANTING THE LEGAL OFFICERS OF THE BUREAU OF INTERNAL REVENUE THE
POWER TO INVESTIGATE, PROSECUTE AND HANDLE EXCLUSIVELY CRIMINAL AND CIVIL.
CASES FILED UNDER THE AUTHORITY OF THE NATIONAL INTERNAL REVENUE CODE OR
ANY OTHER LAW ENFORCED BY THE BUREAU, AMENDING FOR THE PURPOSE
‘SECTION 220, CHAPTER II, TITLE Vill OF REPUBLIC ACT NO. 8424,
OTHERWISE KNOWN AS THE TAX REFORM ACT OF 1997.

1d by the Senate and House of Representatives of the Philippines in Congress

assembled:

SEC 1. Section 220, Chapter II, Title Vill 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 Proceedings 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 shall 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 WRITTEN approval of the Commissioner OR THE DEPUTY COMISSIONER
OF THE BUREAU OF INTERNAL REVENUE. FOR THIS PURPOSE, NO REFERRAL
BY THE BUREAU OF INTERNAL REVENUE TO THE OFFICE OF THE SOLICITOR
GENERAL, THE DEPARTMENT OF JUSTICE OR ANY GOVERNMENT AGENCY
SHALL BE ALLOWED 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 SHALL HAVE AUTOMATIC
REVIEW OVER EVERY CRIMINAL COMPLAINT BEFORE IT IS FILED IN COURT.



SEC 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.

SEC. 3. Separability Clause — If any provision of this Act is declared unconstitutional or
invalid, the other parts or provisions hereof which are not affected shall continue to be in
full force and effect.

SEC. 4. Effectivity — This Act shall take effect fifteen (15) days following its publication in

at least two (2) national papers of general circulation.

Approved,