THE Tax Court has reduced the tax obligation of Mindanao Mineral Processing and Refining Corp. for fiscal year July 1, 2011 to June 30, 2012 from the initial tax assessment by the Bureau of Internal Revenue (BIR) amounting to P1.92 billion.
In the decision of the Court of Tax Appeals (CTA) dated May 19, it canceled the deficiency income tax and compromise penalties assessed by the BIR, and enjoined BIR from “taking any further action against Petitioner (Mindanao Mineral) as regards the canceled assessments.”
However, the Court ordered Mindanao Mineral to pay the deficiency final withholding tax and withholding value-added tax computed until Dec. 31, 2017 amounting to P362.9 million.
Mindanao Mineral was also ordered to pay “delinquency interest at the rate of (12%) on the total unpaid deficiency taxes due of P318.3 million as of July 7, 2017,” or P104,646.02 per day from Jan. 1, 2018 until full payment thereof, pursuant to Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN).
The CTA agreed with Mindanao Mineral that its revenues for July 1, 2011 to June 30, 2012 should not be subjected to the 30% regular corporate income tax because it was still entitled to an income tax holiday “as a New Domestic Producer of Golf Bullion on a Pioneer Status” as registered with the Board of Investments (BoI) during the said period.
The court also rejected the BIR’s claim that it voided the income tax holiday because of Mindanao Mineral’s “misrepresentation in regard to the start of [its] commercial operation.”
The court said only the BoI can void such benefit, and Mindanao Mineral should first be given an opportunity to be heard before the benefit is canceled. — Bianca Angelica D. Añago