Competence. Integrity. Commitment.

• The CTA En Banc  affirmed the decision of the CTA Division granting refund.
• Under the rules, supplies brought into the Ecozone by a duly-registered PEZA enterprise and to be sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, graded, or otherwise processed, manipulated, manufactured, mixed with foreign or domestic merchandise, whether directly or indirectly related in such activity, shall not be subject to customs laws and regulations and thus exempt from customs duties and taxes.
  • In this case, the petroleum fuel purchased by the taxpayer which was delivered to its factory inside the economic zone was to be used for the production of glass products. Accordingly, being a PEZA-registered ecozone export enterprise, the passed-on customs duties on the said purchases may be a proper subject of a claim for refund.
• Therefore, the refund was granted (BOC v. Pioneer Float Glass Manufacturing, Inc., CTA EB No. 1973, CTA Case No. 8752, July 14, 2020)

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The CTA En Banc  affirmed the decision of the CTA Division dismissing the taxpayer’s appeal for lack of jurisdiction.

When a taxpayer assails the reasonableness of the amount of the real property tax (RPT) or where the issue involves a question of fact, the proper recourse is to pay the assailed the RPT assessment and protest the same with the local treasurer and/or assessor, as the case may be within 30 days from the date of payment. The treasurer and/or assessor shall have 60 days from receipt within which to decide the protest. If the decision is unfavorable, the taxpayer has 60 days to appeal to the local board of assessment appeals, which if the latter decides unfavorably, the matter may be appealed to CBAA within 30 days. If the CBAA’s decision is unfavorable, the taxpayer may appeal with the CTA En Banc (“Prior exhaustion of administrative remedies”).

Claiming exemption from RPT raises a question as to the correctness or reasonableness of an assessment, thus, it involves a question of fact which requires exhaustion of administrative remedies.

• In this case, the taxpayer’s claim of RPT exemption arising from availment of incentives is a question of fact which should be subject to prior exhaustion of administrative remedies. The taxpayer should not have directly resorted to the regular court.

Therefore, the resulting assessment issued against the taxpayer is upheld (Jetti Petroleum, Inc. v. Tolentino, CTA EB No. 2093, July 14, 2020)

A local government unit (LGU) has the power to sue through its officials. However, before a city official can exercise the LGU’s power to sue, a law granting such prerogative must first be passed (i.e. City Charter). Otherwise, a city official can only exercise such power if a resolution is passed by the Sangguniang Panglungsod authorizing him to sue on behalf of the City.

• In the instant case, the Charter does not provide an express grant of power to the treasurer to initiate and prosecute suits. Neither was there a resolution passed as proof of the treasurer’s authority.

Under the Local Government Code, taxes on the gross receipts of transportation contractors and person engaged in the transportation of passengers or freight by hire or common carriers are not subject to local business tax.

• In this case, the taxpayer is engaged in the business of freight forwarding. It is engaged in international freight and/or cargo consolidation and forwarding by means of air and sea transportation. It is a common carrier not subject to local business tax (City of Paranaque v. Kuehne + Nagel, Inc., CTA EB No. 2130, CTA AC No. 189, Civil Case No. 07-0370, July 17, 2020)

The CTA En Banc affirmed the decision of the CTA Division declaring the assessment void, cancelled and withdrawn.

Under the rules, a Memorandum of Assignment (MOA) may be construed as equivalent to new letter of authority where the authority of a newly designated revenue officer emanates from, provided that it contains all the necessary elements to establish a contract of agency between the CIR or his duly authorized representative and the new revenue officer.

The Revenue Regional Director (RRD) is authorized to issue an LOA. The position equivalent to a RRD for the Large Taxpayers Division, who is authorized to issue the LOA, is the Assistant Commissioner or Head Revenue Executive Assistants (HREA)

• In the instant case, only the OIC-Chief signed the MOA. He is neither the CIR, RRD nor HREA. Thus the MOA is void and the resulting assessment is also void.
• Jurisprudence has ruled that PAGCOR’s licensees and contractees, such as the taxpayer in this case,  are exempt from income tax on their gaming revenues.
• Therefore, the assessment was declared void, cancelled and withdrawn (CIR v. Travellers International Hotel Group, Inc., CTA EB No. 2047, CTA Case No. 9168, July 17, 2020).