Question: Let’s say you have valid claims of tax refunds. Can you offset your tax due from the refund claims you have?
1989, COA sent CALTEX a letter directing it to remit its collection to OPSF (Oil Price Stabilization Fund) excluding the unremitted (ad valorem tax) for 1986 and 1988 of the additional tax on petroleum products authorized under Section 8 of PD 1956 (which is the law imposing Ad Valorem tax on certain manufactured oils and other fuels).
You must understand that CALTEX previously had reimbursement certificates released by OPSF., meaning they have existing tax refund claims.
And what COA was stating to Caltex in a way was: "E since we excluded your unremitted ad valorem tax for 1986 & 1988 and we've put it on pending, eh di we will hold your reimbursement certificates from the OPSF in abeyance muna.. para patas lang and laban di ba?" (O don't quote me on that..LOL).
And what Caltex seemed to say was: "Eh actually eh... hihingi nga kami ng offset eh". Ofcourse COA denied this request.
So Caltex submitted to COA a proposal for the payment and together with it the recovery of their claims. What COA did was they approved the proposal but prohibited Caltex from further offsetting remittances and reimbursement for the current and ensuing years. Caltex therefore moved for reconsideration.
So.. pwede pala i-offset..
So in short what's happening here is that Caltex have overpaid OPSF and it wants its refund to pay for its taxes.
So.. pwede pala i-offset..
So in short what's happening here is that Caltex have overpaid OPSF and it wants its refund to pay for its taxes.
ISSUE:
Whether the amounts due from Caltex to the OPSF may be OFFSETTED against Caltex' outsanding claims from said funds.
HELD:
Court said, Taxation is not only envisioned as a measure merely to raise revenue to support the existence of government. Taxes may be levied with a regulatory purpose such as to provide means for rehabilitation and stabilization of a threatened industry which is affected with public interest as to be within the police power of the state.
Ah OK. So the principle that operates is still the LIFE BLOOD Doctrine. It's just that it is not coming from the state's inherent power of taxation but from it's police power, where the principle is to regulate.
P.D. 1956 as amended by E.O. 137 explicitly provides that the source of OPSF is taxation. A taxpayer MAY NOT OFFSET taxes due from the claims that he may have against the government.
Taxes cannot be the subject of compensation because the government and the taxpayer are NOT MUTUAL CREDITORS AND DEBTORS OF EACH OTHER
And furthermore, a CLAIM FOR TAXES IS NOT SUCH A DEBT, DEMAND, CONTRACT or JUDGMENT AS IS ALLOWED TO BE SET-OFF.
So it's clear, walang offset offset. Bayaran mo muna yung tax due mo bago mo kunin yung claims for refund mo. And you pay only cash.
Well truth is, BIR does not appropriate for tax refunds. Actually what it gives are Tax Credits. Kaya hindi liquidated.
Court said, Taxation is not only envisioned as a measure merely to raise revenue to support the existence of government. Taxes may be levied with a regulatory purpose such as to provide means for rehabilitation and stabilization of a threatened industry which is affected with public interest as to be within the police power of the state.
Ah OK. So the principle that operates is still the LIFE BLOOD Doctrine. It's just that it is not coming from the state's inherent power of taxation but from it's police power, where the principle is to regulate.
P.D. 1956 as amended by E.O. 137 explicitly provides that the source of OPSF is taxation. A taxpayer MAY NOT OFFSET taxes due from the claims that he may have against the government.
Taxes cannot be the subject of compensation because the government and the taxpayer are NOT MUTUAL CREDITORS AND DEBTORS OF EACH OTHER
And furthermore, a CLAIM FOR TAXES IS NOT SUCH A DEBT, DEMAND, CONTRACT or JUDGMENT AS IS ALLOWED TO BE SET-OFF.
So it's clear, walang offset offset. Bayaran mo muna yung tax due mo bago mo kunin yung claims for refund mo. And you pay only cash.
Well truth is, BIR does not appropriate for tax refunds. Actually what it gives are Tax Credits. Kaya hindi liquidated.
Caltex lost this case.
Buti na lang. E di nga sila nagiissue ng recibo eh pag nagpapagas ka and below 300 gas mo. Hihintayin pa nila humingi ka. (sayang daw kasi paper trail). "Pssst hoy! Recibo ko?" "Ay sorry sir!" "Sorry sorry taena!" LOL.
Buti na lang. E di nga sila nagiissue ng recibo eh pag nagpapagas ka and below 300 gas mo. Hihintayin pa nila humingi ka. (sayang daw kasi paper trail). "Pssst hoy! Recibo ko?" "Ay sorry sir!" "Sorry sorry taena!" LOL.
