Senate Bill Nos. 419 and 773

May 31, 1996 BIR RULING [DA-186-96] MEMORANDUM FROM : Commissioner Liwayway Vinzons-Chato Bureau of Internal Revenue TO : Ms. Adelisa Almario Raymundo Chief, Legislative Division Senate of the Philippines SUBJECT : Senate Bill Nos. 419 and 773 Features of the Bill : The proposed Senate Bill Nos. 419 (Senator Ernesto Hererra's version) and 773 (Senator Orlando Mercado's version) constituting workers monetary claims as first statutory lien over any and all assets of his employer, amending for this purpose Article 110 of the Presidential Decree No. 442, as amended, quoted below : "[Workers Preference in Case of Bankruptcy In the event of bankruptcy or liquidation of an employer's business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before the claims of the Government and other creditors may be paid]." Comment/Recommendation: Although we fully concur with the Purpose Clause of the bill, we object to the provision that seeks to disturb the Preference of Credits provided for in the Civil Code (Republic Act No. 386) stated below: "Article 2241. With reference to specific movable property of the debtor, the following claims or liens shall be preferred : (1) Duties, taxes and fees due thereon to the state or any subdivision thereof :" xxx xxx xxx (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue