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NIRC OF 1997

NIRC OF 1997

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Published by: gilbertmalcolm on Aug 01, 2013
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This web page contains the full text of :THE
[Tax Reform Act of 1997]
Republic Act No. 8424
Short Title 
- This Act shall be cited as the
"Tax Reform Act of 1997" 
SEC. 2.
State Policy 
It is hereby declared the policy of the State to promote sustainableeconomic growth through the rationalization of the Philippine internal revenue tax system,including tax administration; to provide, as much as possible, an equitable relief to a greater number of taxpayers in order to improve levels of disposable income and increase economicactivity; and to create a robust environment for business to enable firms to compete better in theregional as well as the global market, at the same time that the State ensures that Government isable to provide for the needs of those under its jurisdiction and care.
SEC. 3.
Presidential Decree No. 1158, as amended by, among others, Presidential Decree No.1994 and Executive Order No. 273, otherwise known as the National Internal Revenue Code, ishereby further amended.
. Title of the Code 
- This Code shall be known as the National Internal RevenueCode of 1997.
SEC. 2.
Powers and Duties of the Bureau of Internal Revenu
- The Bureau of InternalRevenue shall be under the supervision and control of the Department of Finance and its powersand duties shall comprehend the assessment and collection of all national internal revenue taxes,fees, and charges, and the enforcement of all forfeitures, penalties, and fines connectedtherewith, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts.The Bureau shall give effect to and administer the supervisory and police powers conferred to it
 by this Code or other laws.
SEC. 3.
Chief Officials of the Bureau of Internal Revenue 
- The Bureau of Internal Revenueshall have a chief to be known as Commissioner of Internal Revenue, hereinafter referred to asthe Commissioner and four (4) assistant chiefs to be known as Deputy Commissioners.
SEC. 4
. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Case
- The power to interpret the provisions of this Code and other tax laws shall be under the exclusive andoriginal jurisdiction of the Commissioner, subject to review by the Secretary of Finance.The power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under this Code or other laws or portions thereof administered by the Bureau of Internal Revenue is vested in theCommissioner, subject to the exclusive appellate jurisdiction of the Court of Tax Appeals.
SEC. 5
Power of the Commissioner to Obtain Information, and to Summon, Examine, and Take Testimony of Persons 
- In ascertaining the correctness of any return, or in making a returnwhen none has been made, or in determining the liability of any person for any internal revenuetax, or in collecting any such liability, or in evaluating tax compliance, the Commissioner isauthorized:(A) To examine any book, paper, record, or other data which may be relevant or material to suchinquiry;(B) To obtain on a regular basis from any person other than the person whose internal revenuetax liability is subject to audit or investigation, or from any office or officer of the national andlocal governments, government agencies and instrumentalities, including the Bangko Sentral ngPilipinas and government-owned or -controlled corporations, any information such as, but notlimited to, costs and volume of production, receipts or sales and gross incomes of taxpayers, andthe names, addresses, and financial statements of corporations, mutual fund companies,insurance companies, regional operating headquarters of multinational companies, jointaccounts, associations, joint ventures of consortia and registered partnerships, and their members;(C) To summon the person liable for tax or required to file a return, or any officer or employee of such person, or any person having possession, custody, or care of the books of accounts andother accounting records containing entries relating to the business of the person liable for tax, or any other person, to appear before the Commissioner or his duly authorized representative at atime and place specified in the summons and to produce such books, papers, records, or other data, and to give testimony;(D) To take such testimony of the person concerned, under oath, as may be relevant or materialto such inquiry; and(E) To cause revenue officers and employees to make a canvass from time to time of anyrevenue district or region and inquire after and concerning all persons therein who may be liable
to pay any internal revenue tax, and all persons owning or having the care, management or  possession of any object with respect to which a tax is imposed.The provisions of the foregoing paragraphs notwithstanding, nothing in this Section shall beconstrued as granting the Commissioner the authority to inquire into bank deposits other than as provided for in Section 6(F) of this Code.
SEC. 6
. Power of the Commissioner to Make assessments and Prescribe additional Requirements for Tax Administration and Enforcement 
. -
 Examination of Returns and  Determination of Tax Due
- After a return has been filed as required under the provisions of thisCode, the Commissioner or his duly authorized representative may authorize the examination of any taxpayer and the assessment of the correct amount of tax:
 Provided, however;
That failure tofile a return shall not prevent the Commissioner from authorizing the examination of anytaxpayer.Any return, statement of declaration filed in any office authorized to receive the same shall not be withdrawn:
 Provided, That 
within three (3) years from the date of such filing, the same may be modified, changed, or amended:
 Provided, further,
That no notice for audit or investigation of such return, statement or declaration has in the meantime been actually served upon the taxpayer.(B)
Failure to Submit Required Returns, Statements, Reports and other Documents
- When areport required by law as a basis for the assessment of any national internal revenue tax shall not be forthcoming within the time fixed by laws or rules and regulations or when there is reason to believe that any such report is false, incomplete or erroneous, the Commissioner shall assess the proper tax on the best evidence obtainable.In case a person fails to file a required return or other document at the time prescribed by law, or willfully or otherwise files a false or fraudulent return or other document, the Commissioner shall make or amend the return from his own knowledge and from such information as he canobtain through testimony or otherwise, which shall be prima facie correct and sufficient for alllegal purposes.(C)
 Authority to Conduct Inventory-taking, surveillance and to Prescribe Presumptive Gross
Sales and Receipts
- The Commissioner may, at any time during the taxable year, order inventory-taking of goods of any taxpayer as a basis for determining his internal revenue taxliabilities, or may place the business operations of any person, natural or juridical, under observation or surveillance if there is reason to believe that such person is not declaring hiscorrect income, sales or receipts for internal revenue tax purposes.The findings may be used as the basis for assessing the taxes for the other months or quarters of the same or different taxable years and such assessment shall be deemed
 prima facie
correct.When it is found that a person has failed to issue receipts and invoices in violation of therequirements of Sections 113 and 237 of this Code, or when there is reason to believe that the books of accounts or other records do not correctly reflect the declarations made or to be made ina return required to be filed under the provisions of this Code, the Commissioner, after taking

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