ANGELES CITY – A regional trial court (RTC) here has issued a writ of preliminary injunction, stopping the Bureau of Internal Revenue (BIR) from enforcing “directly or indirectly” a regulation that was purportedly designed to curb loses worth P40 to P60 billion from smuggling yearly.
RTC judge Philip Iturralde issued the order to Finance Sec. Cesar Purisima and Bureau of Internal Revenue (BIR) Commissioner Kim Henares who were ordered to withdraw the implementation of Revenue Regulation No.2-2012.
The regulation, already being enforced by the BIR, required fuel importers at Clark and Subic to pay regular taxes, despite Republic Act 7227 as amended by Republic Act 9400 exempting them from such taxes in lieu of five percent tax on gross income earned (GIE).
The regulation said, however, that the importers could reimburse what they paid beyond the GIE after showing proof that the fuel they sold had been consumed within Clark or Subic, also as prescribed by law.
Iturralde noted that the regulation was intended to curb fuel smuggling from Clark and Subic, from which the government has reportedly been losing from P40 billion to P60 billion per year.
But Pampanga 1st District Rep. Carmelo Lazatin, who filed the petition against the regulation, noted that the BIR had “no authority to go beyond the provisions of RA 9400 which amended RA 7227.”
Iturralde noted that “since there appears to be patent conflict between the questioned regulation and RA 9400, in order to prevent injury to the registered businesses inside the Freeport zones, there is a need to restrain the BIR from implementing Revenue Regulation No. 2-2012 until the main case has been heard.”
The judge warned, however, that RA 9400 prescribes penalties to investors who are found smuggling fuel from Clark or Subic.
The penalty includes perpetual barring from doing business in any Freeport or economic zone in the country.
