Chapter IV

TAX LAWS AND REGULATIONS

NATURE OF TAX LAWS.

Civil in nature.> Not Political, hence, continually enforced even during occupation> Deemed law of the occupied territory and not the occupying power.> Not penal. No retroactive effect, ex post facto law cannot be invoked.

INTERPRETATION OF TAX LAWS.

Will not be construed as imposing a tax unless it does so clearly, expressly and unambiguously.

It cannot be extended by implication.

DOUBTS construed strongly against the government and liberally in favor of the citizen. (Burdens are not to be imposed beyond what the statutes expressly and clearly import)

Tax laws operate prospectively (enact, amend or repeal) unless the purpose of the legislature to give retrospective effect is expressly declared or implied from the language used.

American origin, interpretations by American Courts on our parallel tax laws.

SOURCES OF TAX LAWS.

Constitution

Tax Codes such as NIRC, Tariff and Customs Codes (TCC), Local Government Code.

Statutes like RA 1125 (Creating Tax Appeals); RA 7716 (E-VAT) and RA 8424 (Tax Reform Act 1997)

Presidential Decrees

Executive Orders

Court Decisions

Revenue Regulations promulgated by DOF

Administrative issuances of the BIR (Revenue Memorandum Circulars) and BOC (Customs Memorandum Orders)

BIR Rulings

Local tax ordinances

Tax treaties and conventions

MANDATORY AND DIRECTORY PROVISIONS.

Mandatory requirements for purpose of the validity of certain acts performed by those who are entrusted with the enforcement of revenue laws. (MANDATORY PROVISIONS)

COURT OF TAX APPEALS

Not mere superior administrative agency or tribunal; it is a part of judicial system. It is created by the Congress as a centralized court specializing in tax cases. Vested with appellate jurisdiction over cases arising under NIRC, TCC, and the Assessment Law.

PUBLICATION REQUIREMENT

Tanada vs Tuvera it was ruled that the following require publication as a condition for their effectivity: statutes, including those of local application and private laws, presidential decrees and executive orders promulgated by the president, and administrative rules and regulations if their purpose is to enforce or implement an existing law, pursuant to valid delegation.> Interpretative regulations and those which are merely internal in nature, those which regulate only the personnel not the public; revenue memorandum order, revenue memorandum circulars, revenue administrative orders, and BIR rulings; opinions expressed by way of circular or memorandum where it merely interprets a preexisting law; Customs memorandum order, do not require publication for purposes of effectivity.

ARE TAX LAWS SPECIAL LAWS?

Tax laws are special laws.

Civil code is general law.

Tax laws prevail over the civil code.

Provisions of special law are found to be deficient, the Civil Code shall apply.

TAX REGULATIONS.

Promulgated by Sec. of Fin. In order to implement the provisions of the Tax Code.

It must be not contrary to law; regulations promulgated on wrong interpretations of the law cannot give rise to a vested right that can be invoked by taxpayers or the Government.

It must be published in a the OC or newspaper of general circulation

It must reasonable

It must be within the authority conferred since the power to make regulations is not power to legislate.

Discrepancies between IRR and basic law, basic law prevails.

Regulations must no supplant nor modify the law.

Regulations could not be given weight if to do so would in effect amend the statute.

TAX RULINGS

They are the best guess of the moment and incidentally often contain such well-considered and sound law; but the courts have held that they do not prevent an entire change of front at any time and are merely advisory sort of an information service to the taxpayers.

POWER OF THE COMMISSIONER TO INTERPRET TAX LAWS AND TO DECIDE TAX CASES.