CTA partially grants DMCI’s petition

THE Court of Tax Appeals (CTA) has partially granted DMCI Holdings, Inc.’s petition against the Bureau of Internal Revenue’s (BIR) 2016 tax assessment, reducing the company’s originally disputed P199.28-million liability while upholding certain withholding and documentary stamp taxes.

The 73-page decision of the CTA Third Division, promulgated on Nov. 4 and penned by Associate Justice Marian Ivy F. Reyes-Fajardo, canceled DMCI’s deficiency income tax and compromise penalties for taxable year (TY) 2016, citing lack of legal and factual basis.

At the same time, it confirmed the company’s obligations for final withholding tax (FWT), expanded withholding tax (EWT), fringe benefit tax (FBT), and documentary stamp tax (DST), with modifications.

The court found that the BIR had ignored DMCI Holdings’ net operating loss of P51.72 million for 2016 and partially over-assessed undeclared income and unnecessary expenses. As a result, the company’s total tax liability was reduced to P145.53 million, inclusive of basic taxes, surcharges, and deficiency interest.

DMCI, a publicly listed holding firm with interests in construction, real estate, mining, and utilities, is ordered to pay P137.85 million for FWT, P1.71 million for EWT, P2.91 million for FBT, and P3.05 million for DST, in addition to 12% annual delinquency interest on the outstanding amount starting May 1, 2021 until full payment.

The CTA said the ruling strikes a balance between the taxpayer’s right to due process and the BIR’s mandate to collect revenue under the National Internal Revenue Code. — Erika Mae P. Sinaking