The revisions to the enforcement provision of RA 7916 which adversely affects the collections of the Bureau of Customs

• Main Author: de Vera, Felipe Geoffrey K., IV
• Format: text
• Language: English
• Published: Animo Repository 2008
• Subjects: Tax collection > Philippines; Republic Act No. 7916; Tax Law
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/7089
• Institution: De La Salle University

Taxation is one of the intrinsic state powers that have pervasive effects on the economy and its people. It is so invasive that Supreme Court Justice John Marshall once elucidated that “the power to tax involves the power to destroy.” It has been recognized that the power to tax is inherent in the State so as to enable it to perform its functions. As such, great freedom has been accorded to the State in implementing tax measures, the basic goal of which is to raise much needed revenue. But as on the one end is the necessity to collect the life blood of the economy. i.e. tax the government’s desire to attract foreign investors lies on the other. This is where the special treatment accorded to foreign investors comes in, in the form of incentives such as exemption from certain taxes. At first glance, the benefits given to the foreign enterprises probably compensate the inconvenience brought about by these incentives. But such is not always the case. It is to this end that the study aims to examine the incentives enjoyed by these foreign investors in the country. In particular, this study will focus on analyzing the Alert Orders and Apprehension reports filed by Bureau of Customs regarding PEZA shipment which will try to prove that the tax incentives given to the registered firms specifically the incentive which grants exemption from duties and taxes on imported capital equipment and raw materials are being used to avoid and to skip the payment of taxes which in turn undermines the tax collection of the Bureau of Customs. By analyzing RA 7916 and its Implementing Rules and Regulations (IRR) this study will create strategies to improve the implementation of the law and determine how the enforcement provision of the law can be improved or amended in order to prevent firms from abusing it.