RA No. 7906 Allowing Thrift Banks to Act as Collecting Agents for Government Entities is Not Mandatory

November 26, 1996 BIR RULING NO. 126-96 R.A. 7906 000-00 126-96 Hermosa Savings and Loan Bank, Inc. Head Office A. Nuguid Street 2111 Hermosa Bataan Attention: Mr . Benjamin J . Cruz President & General Manager Gentlemen : This refers to your letter dated April 24, 1995 requesting for reconsideration that your bank, which is classified as a thrift bank, be included in the Accredited Agent Banks (AABs), [which, under the "New Accreditation Criteria Requirement of AABs in the Collection of National Internal Revenue Taxes", refer only to commercial banks or unibanks], for the following reasons: "1. It is clearly violative of Section 10 (d) of the Republic Act No. 7906, otherwise known as the "Thrift Bank Act of 1995."; "2. It runs counter to the rule of statutory construction of prospective operation; LexLib "3. The principle of equity and fair play will not be served; and "4. One of the rationales in accrediting thrift banks is primarily to service the taxpaying public in areas where the presence of commercial banks is nil." In reply, please be informed that while it is true that RA No. 7906 provides that thrift bank can act as a Collecting Agent for government entities, the said provision is not mandatory. It should be noted that Sec. 10 of RA No. 7906 uses the word may , which means that the said provision is merely persuasive, viz: "Section 10. Powers of Thrift Banks . In addition to powers granted it by this Act and existing laws, any thrift bank MAY : xxx xxx xxx "(d) ACT AS COLLECTION AGENT FOR GOVERNMENT ENTITIES, INCLUDING BUT NOT LIMITED TO THE BUREAU OF INTERNAL REVENUE . Social Security System, and the Bureau of Customs;" (Emphasis and capitalization supplied.) cdti In view thereof, it is our opinion that the accreditation criteria recommended by the BIR Bank Accreditation Committee which was duly approved by the Commissioner is in order and that it is not mandatory for the BIR to automatically include thrift banks as Collecting Agents of the Bureau because they should first meet the criteria promulgated by the Agency before they can be accredited as authorized agent banks. But while it is true that thrift banks are not totally disqualified to collect internal revenue taxes because they can still be accredited as part of a consortium if they tie-up with a qualified AAB. Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue