Denial of Request for Waiver of Surcharges and Interest on Deficiency Taxes

August 11, 1999 BIR RULING NO. 122-99 Sec. 248 & 249-TC-000-00-122-99 General Vehicle Parts Manufacturing and Rebuilding Center, Inc. Penthouse, Legaspi Towers 300 Roxas Boulevard Attention: Ms . Norma Cayton President Gentlemen : This refers to your letter dated May 28, 1999 stating that you received the revalidated Tax Credit Certificate (TCC) only in May; that your company relied upon the said TCC for your 1998 annual income tax payment since at the time your income tax was due your funds was not enough to pay in cash your income tax liability; that for this reason your 1998 income tax return was submitted to Revenue District Office #33 with the copies of the old TCC; that you would like to process the tax debit memo and apply the same to pay your 1998 income tax liability; and that it was your intention to file and pay your income tax liability on time. In support of your request, you are submitting the following: 1. Annual income tax return for the year ended 1998; 2. Audited report of the financial statements as conducted by independent certified public accountants; 3. Financial statements; and 4. Other pertinent papers In view of the foregoing, you now request in effect for a waiver of the surcharges and interest on your deficiency taxes. cdlex In reply thereto, please be informed that under Sections 248(a)(1) and (3) 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) Accordingly, your request for a waiver of surcharges and interest on your deficiency taxes is hereby denied for lack of legal basis. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue