Request for Waiver of Surcharges and Interests on Deficiency Taxes

November 7, 1997 BIR RULING NO. 121-97 121-97 Lilian Garments C/o Bureau of Internal Revenue Region No. 5, Valenzuela Metro Manila Attention: Mr . Wong San Luen Gentlemen : This refers to your letter dated August 8, 1997 requesting for a waiver of surcharges and interests on your deficiency taxes. prcd It is represented that presently, you are financially hard up and business is not well; that you are not financially capable of paying your taxes including the penalties imposed; and that you have made partial payments in the amount of P100,000 last April 23, 1996 under ATAP No. 3419242 but was unable to pay the balance because you have been ill. In reply thereto, please be informed that under Sections 248 and 249, both of the Tax Code, as amended, the imposition of the surcharge and interest on delinquency is mandatory. Strong reasons of policy support a strict observance of the rule regarding the payment of tax. The laws imposing penalties for delinquencies are clearly intended to hasten tax payments or punish evasions or neglect of duty in respect thereof. If delays in tax payments are to be condoned for light reasons, the law imposing penalties for delinquencies would be rendered nugatory and the maintenance of the government and its multifarious activities would be as precarious as taxpayers are willing or unwilling to pay their obligations to the state on time (Jamora vs. Meer, 7 Phil. 22). This is justified because the intention of the law is precisely to discourage delay in the payment of taxes due to the State and, in this sense, the surcharge and interest charged are not penal but compensatory in nature. They are compensation to the State for the delay in payment or for the concomitant use of the funds by the taxpayer beyond the date he is supposed to have paid them to the State. (Castro vs. Col., etc. Resolution on Motion for Reconsideration, G.R. No. L-12174, Dec. 1962) LLpr Accordingly, your request for a waiver of surcharges and interests on your deficiency taxes is hereby denied for lack of legal basis. Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue