New BIR Chief Suspends Kim Henares’ Orders of Tax Investigation on Property Transactions

BIR chief Dulay Henares

Caesar R. Dulay, the newly-appointed chief of the Bureau of Internal Revenue (BIR) this Friday, July 1 suspended the recent orders of his predecessor, former BIR chief Kim Henares. True to his earlier promise to taxpayers, Dulay on his first day ordered the suspension of tax investigation to buyers and sellers of properties before making a deal.

Via Revenue Memorandum Circular No. 69-2016 which Dulay immediately signed upon his appointment as the BIR chief, Henares’ orders made from June 1-30, 2016, or dubbed as ‘midnight orders’ shall be suspended until further notice. This includes the controversial Revenue Memorandum Order (RMO) No. 24-2016 and 25-2016.

“I just signed today three orders. I am recalling those orders as what I stated during our conference in Davao. These are preventive reviews after listening to the players. Initially, only those in June will be covered, but I may consider others.” BIR chief Caesar Dulay told Philstar, adding that he will review them thoroughly and will clear the valid ones.

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As mentioned in the Guidelines and Procedure of RMO No. 24-2016, which was issued last June, additional requirements are needed before any sale or transfer of properties shall be made. A One-Time Transaction Team (ONETT) shall conduct an audit or investigation to ensure that all parties involved are capable of paying the required taxes.

Shortly after, industry group Tax Management Association of the Philippines (TMAP), strongly opposed Henares’ orders, noting that it would not only promote corruption among BIR examiners, but would also presume that taxpayers are inclined to commit fraud. TMAP President Benedict Tugonon said he is very happy with Dulay’s orders.

“This is what we have been asking and advocating for. These rules and regulations are not consistent with the law which could tax compliance very difficult. These are conflicting interpretations of rules.” Tugonon said, adding that TMAP will submit to BIR a list of Henares’ previous orders that would require further review by the new BIR chief.

Interestingly, Dulay’s quick action is very much in line with the strict order of President Rordigo Duterte which he revealed duing his inaugural speech this Thursday. He said he directed all his cabinet heads and secretaries to reduce red tape by providing easier procedures for processing papers and documents in all government transactions.