Bureau of Internal Revenue Regional Director Eduardo Pagulayan Jr.’s probe on Megaworld Corp. of ultra bilyonaryo Andrew Tan has ended before it even began.
Finance Secretary Carlos Dominguez and BIR Commissioner Caesar Dulay issued separate orders suspending the Revenue Special Orders (SROs) and Operation Memorandum (OP) that authorized Pagulayan and other BIR officials to form task forces and conduct special audits of real estate developers, multi-level marketing (MLM) companies, Philippine Offshore Gaming Operators (POGO), and electronic sabong (e-Sabong) kingpins.
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Dominguez and Dulay ordered the suspension on the same day that Pagulayan announced that his BIR Revenue Region 8B-South National Capital Region would continue its probe into Megaworld which covers the verification of taxes on One-Time Transactions (ONETT) on the firm’s property sales and transfers.
Pagulayan, who is set to retire next month, said that after Megaworld initially refused to comply with the BIR audit, his office discovered that the property developer “failed” in its compliance and reportorial requirements under the Tax Code.
“Last Wednesday (May 18), it was resolved that Megaworld will now comply with the audit. Hence, closure was set aside. However, the investigation is ongoing,” said Pagulayan. The BIR announced on May 17 it was holding a press conference the next day in Megaworld’s own building in BGC to announce the closure of the company.
In his letter to Dulay, Dominguez admitted that the RSOs and OMs have “distorted” the delineation of BIR functions among its divisions and “caused uncertainty for some taxpayers.” Megaworld argued that it was under the jurisdiction of Large Taxpayers Service even if the said property was within Pagulayan’s regional office.
“The Commissioner is hereby directed to suspend the implementation of, or cancel if warranted, the abovementioned RSOs and OM. All existing audits or investigations pursuant to said RSO, however, shall be handled by the Revenue District Offices or unit/s in the BIR (i.e. Large Taxpayer Service) where the taxpayer is registered, ” said Dominguez.
Dulay, in his memorandum ordering the suspension of special audits, said: “No field audit, field operations, or any form of business visitation in execution of Letters of Authority/ Audit Notices, Letter Notices or Missions Orders should be conducted by the task forces.”
Dulay also ordered Pagulayan and other task force leaders and members to attend meetings called by the BIR management and congressional hearings such as the special hearing on the Megaworld closure brouhaha to be conducted by the House Ways and Means Committee on Monday, May 23.