BIR Ruling [DA-409-98]

September 7, 1998 BIR RULING [DA-409-98] Hon. Edgardo B. Espiritu Secretary of Finance M a n i l a S i r : We are forwarding herewith for your approval the herein claim for additional informer's reward of Mr. Isidro G. Paragas (a.k.a Zandro Paredes) under then Section 281 (1) of the Tax Code, as amended (now Section 282 (A) of the Tax Code of 1997), including the pertinent records (xerox copies only) relative to the withholding tax case of the National Sugar Refineries Corporation (NASUREFCO) for the years 1984 to 1986, inclusive. cdll It will be recalled that on the basis of Confidential Information No. 22-92 filed by Mr. Paragas, an investigation was conducted by examiners of the then Withholding Tax Division and as a result thereof, Assessment Notice Nos. FAS-1-84-91-00359 to 93 were issued by this Office on December 23, 1991 requiring NASUREFCO to pay the amount of P463,802,164.44 as deficiency withholding tax for the years 1984 to 1988. However, NASUREFCO was able to pay only the amount of P51,248,767.63 under Authority To Accept Payment (ATAP) No. 115565 dated September 24, 1992. On the basis of the recommendation of this Office dated August 31, 1994, your Office approved the claim of Mr. Paragas for the payment of informer's reward in the amount of P7,687,015.05 which is equivalent to 15% of P51,246,767.63 initially paid by NASUREFCO. After voluntarily donating to the Philippine Government the amount of P900,000.00, Mr. Paredes was finally paid the amount of P6,787,015.15 as informer's reward. In this letter dated June 3, 1998, Mr. Paredes informed this Office that NASUREFCO has remitted to the BIR a portion of the proceeds from the sale of its three (3) refineries amounting to P58,901,133.45 as final compromise settlement of its unpaid withholding tax liability for the years 1984 to 1988. Payment of the aforesaid amount of P58,901,133.45 is evidenced by the attached xerox copy of Official Receipt No. 1458685-97 issued by the Development Bank of the Philippines dated September 24, 1997. In view thereof, it is respectfully recommended that Mr. Isidro G. Paragas (a.k.a Zandro Paredes) be paid the amount equivalent to 15% of P58,901,133.45 or P8,835,169.95 as additional informer's reward under then Section 281 (1) of the Tax Code, as amended, the law applicable therein. The said reward shall not be subject to the 10% final tax imposed under the last paragraph of Section 282 of the Tax Code of 1997 for the reason that R.A. 8424 does not contain provision providing for its retroactive application. (Opinion No. 67, S. 1998 of the Secretary of Justice) cdt Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue