Tax Administration

Tax administration refers to the management of the tax system.

Tax administration of the national tax system in the Philippines is
entrusted to the Bureau of Internal Revenue which is under the
supervision and administration of the Department of Finance.
Chief Officials of the Bureau of
Internal Revenue
The Bureau of Internal Revenue shall have a chief to be known
as the Commissioner of Internal Revenue, and four (4) assistant
chiefs to be known as Deputy Commissioners.

a. Operations Group
b. Legal enforcement group
c. Information systems group
d. Resource management group
Powers and Duties of Bureau of
Internal Revenue
1. The assessment and collection of all national internal revenue
taxes, fees and charges
2. The enforcement of all forfeitures, penalties, and fines
connected therewith
3. The execution of judgments in all cases decided in its favor by
the Court of Tax Appeals, and the ordinary courts
4. The giving effect to and the administering of the supervisory
and police power conferred to it by the Tax Code or other
laws
Powers of the Commissioner of
Internal Revenue
A. Power of the Commissioner to Interpret Tax Laws and
to Decide Tax Cases

1. Power to interpret tax laws subject to review by the Secretary

of Finance

2. Power to decide disputed assessments, refunds of internal

revenue taxes, fees and other charges, penalties imposed in
relation thereto, other matters arising under the NIRC subject
to the exclusive appellate jurisdiction of the CTA.
B. Power of the Commissioner to Obtain Information, and
to Summon, Examine, and Take Testimony of Persons

1. Power to examine any book, paper, record or other data

which may be relevant or material to a tax inquiry
2. Power to obtain information from any person other than the
person whose internal revenue tax liability is subject to audit
or investigation or from any office or officer of the national or
local governments, government agencies and
instrumentalities, including BSP and GOCCs.
3. Power 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 and
other accounting records.

4. Power to take such testimony of the person concerned, under

oath, as may be relevant or material to such inquiry
C. Power of the Commissioner to Make Assessments and
Prescribe Additional Requirements for Tax Administration
and Enforcement

After a return has been filed or when no return is filed, the

Commissioner or his duly authorized representative may
authorize the examination of any taxpayer, and the assessment
of the correct amount of tax notwithstanding any law requiring
prior authorization of any government agency or instrumentality.
Best Evidence Obtainable

The commissioner shall assess the proper tax on the best

evidence obtainable.
• When a report required by law as a basis for the assessment of
any NIR 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 make or amend a return from his own
knowledge and from such information as he can obtain through
testimony or otherwise 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 Commission may, at any time during the taxable year:

1. Order inventory-taking of goods of the taxpayer; or

2. Place the business operations of the person under observation
or surveillance

If there is a reason to believe that a person is not declaring his

correct income, sales, or receipts for internal revenue tax
purposes.
The Commissioner may prescribe a minimum amount of gross
receipts, sales, and taxable base when:

1. It is found that a taxpayer has failed to issue receipts or

invoices; or
2. There is a reason to believe that the books of accounts or
other records do not correctly reflect the declarations made in
the return
The Commissioner shall have the authority to prescribe real
property values by dividing the country into different zones and,
upon mandatory consultation with competent appraisers from the
private and public sector and with prior notice to affected
taxpayers, to determine the fair market value of real properties
located in each zone.
The Commissioner is authorized to inquire into the bank deposits and
other related information held by financial institutions of:

1. A decedent to determine his gross estate

2. Any taxpayer who has filed an application for compromise of his
tax liability by reason of financial incapacity to pay his tax liability
3. A specific taxpayer subject of a request for the supply of tax
information from a foreign tax authority pursuant to an
international convention or agreement on tax matters to which the
Philippines is a signatory or a party of.
The Commissioner, thru the Revenue National Accreditation Board
(RNAB) and Revenue Regional Accreditation Boards (RRABs), shall
have the authority to accredit and register individuals and general
professional partnership and their representatives who prepare and file
tax returns, statements, reports, and other papers with, or who appear
before the BIR, for taxpayers.

Only the financial statements which are prepared, signed, and certified
by duly accredited tax practitioners shall be considered by
Commissioner or his authorized representative as valid documents or
attachments to tax returns, information returns, or other statements or
reports required by the Tax Code or regulations.
D. Authority of the Commissioner to Delegate Power

The Commissioner may delegate the powers vested in him to any

or such subordinate officials with the rank equivalent to a division
chief or higher, subject to such limitations and restrictions
promulgated by the Secretary of Finance.
The following powers of the Commissioner shall not be delegated:

1. The power to recommend the promulgation of rules and

regulations by the Secretary of Finance
2. The power to issue rulings of first impression, or to reverse,
revoke, or modify any existing ruling of the BIR.
3. The power to compromise or abate any tax liability under Section
204 (A) of the tax code.
4. The power to assign and re-assign internal revenue officers to
establishments where articles subject to excise tax are produced or
kept
Non retroactivity of rulings

XPNs:
1. Where the taxpayer deliberately misstates or omits material
facts from his return or any document required of him by the
Bureau of Internal Revenue
2. Where the facts subsequently gathered by the Bureau of
Internal Revenue are materially different from the facts on
which the ruling is based; or
3. Where the taxpayer acted in bad faith
Revenue Regulations
Are issuances signed by the Secretary of Finance, upon
recommendation of the CIR that specify, prescribe or define rules
and regulations for the effective enforcement of the provisions of
the NIRC and related statutes.
Revenue Memorandum Orders (RMOs) are issuances that
provide directives or instructions; prescribe guidelines; and
outline processes, operations, activities, workflows, methods and
procedures necessary in the implementation of stated policies,
goals, objectives, plans and programs of the Bureau in all areas
of operations, except auditing.
BIR Rulings are official position of the Bureau to queries raised by
taxpayers and other stakeholders relative to clarification and
interpretation of tax laws.