Govt losing excise tax collections due to case
The government is losing billions of pesos in sin taxes after a local court prevented the collection of the levy on alcohol and tobacco products transshipped to the Subic Bay Freeport Zone, a finance department official said.
Finance Undersecretary Gil Beltran said the government stands to lose P3 billion this year because of the court’s temporary restraining order (TRO). He said the Bureau of Customs (BOC) managed to collect only P400 million in the first half the year. These were remitted by duty-free shops.
The BOC initially pegged its target at P4.5 billion by yearend but the TRO issued by the Olongapo Regional Trial Court would allow the government to collect only a fraction of the said amount.
The total target, including that to be collected by the Bureau of Internal Revenue, stands at P9 billion.
Last year, importers and transhippers of the sin products obtained a preliminary injunction from the Olongapo court, preventing the DOF from collecting excise tax on sin products inside the Subic freeport.
In May 2005 Olongapo City Judge Ramon Caguioa ruled that Republic Act 9334—which raised the excise taxes on tobacco and liquor—is inconsistent with R.A. 7227, which bans the imposition of local and national taxes within the Subic freeport.
The Olongapo RTC judge also ruled that RA 9334, a measure that would raise the revenue collection of the government, is unconstitutional.
The government, through the Office of the Solicitor General, earlier submitted its appeal before the Supreme Court, stating that a local court cannot stop the government from collecting taxes as cited in Section 218 of the Tax Code.
The High Tribunal has yet to rule on the matter.
Likha C. Cuevas - ABS CBN NEWS
Finance Undersecretary Gil Beltran said the government stands to lose P3 billion this year because of the court’s temporary restraining order (TRO). He said the Bureau of Customs (BOC) managed to collect only P400 million in the first half the year. These were remitted by duty-free shops.
The BOC initially pegged its target at P4.5 billion by yearend but the TRO issued by the Olongapo Regional Trial Court would allow the government to collect only a fraction of the said amount.
The total target, including that to be collected by the Bureau of Internal Revenue, stands at P9 billion.
Last year, importers and transhippers of the sin products obtained a preliminary injunction from the Olongapo court, preventing the DOF from collecting excise tax on sin products inside the Subic freeport.
In May 2005 Olongapo City Judge Ramon Caguioa ruled that Republic Act 9334—which raised the excise taxes on tobacco and liquor—is inconsistent with R.A. 7227, which bans the imposition of local and national taxes within the Subic freeport.
The Olongapo RTC judge also ruled that RA 9334, a measure that would raise the revenue collection of the government, is unconstitutional.
The government, through the Office of the Solicitor General, earlier submitted its appeal before the Supreme Court, stating that a local court cannot stop the government from collecting taxes as cited in Section 218 of the Tax Code.
The High Tribunal has yet to rule on the matter.
Likha C. Cuevas - ABS CBN NEWS
posted by OlongapoCity Zambales at
4:21 AM
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