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BIR reg’l director has no power to close a business, tax lawyer says


By Jun Ramirez

Is the regional director of the Bureau of Internal Revenue (BIR) authorized to padlock a business establishment for alleged tax violation?

BIR logo and building (Manila Bulletin file photo)

BIR (Manila Bulletin File Photo)

A former BIR regional director and now a tax practitioner asked the question as she appealed to BIR Commissioner Caesar R. Dulay to lift the closure order issued by Cebu Revenue Regional Director Eduardo Pagulayan, Jr. against her client Ong Kin King and Company of Mandaue City.

The firm is into restaurant, import and export businesses.

Sometime in July, Pagulayan ordered the closure the firm’s three restaurants and five warehouses for allegedly disregarding various rules and regulations of the Tax Code including the use of cash and point-of-sales machines with expired permits.

Lawyer Estrella V. Martinez argued the closure of her client’s business was illegal as it was signed only by Pagulayan, Jr. holding the post as officer-in-charge (OIC).

Ms. Martinez said a regional director has no authority to issue a closure order but Revenue Deputy Commissioner for Operations Arnel SD Guballa as mandated under
Revenue Memorandum Order No. 36-2009.

Ms. Martinez added that as an OIC Pagulayan’s duty was limited to signing daily time records of personnel as ruled by the Supreme Court in the Aytona Vs. Castillo case.

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