BIR centralizes tax transactions of closed banks under PDIC
January 18, 2018
The Philippine Deposit Insurance Corporation (PDIC) and Bureau of Internal Revenue (BIR) have agreed to facilitate a more efficient resolution of tax-related transactions of closed banks under PDIC liquidation. This was institutionalized through a BIR Memorandum Circular issued in November 2017 directing the centralization of these transactions to Revenue District Office No. 48 in Makati City. PDIC President Roberto B. Tan (seated, left) leads the PDIC delegation during a recent courtesy visit to BIR Commissioner Caesar R. Dulay (seated, right) at the BIR Head Office. Also present are (left to right) PDIC Assistant Vice President Teodoro Jose D. Hirang (OIC-Receivership and Bank Management Group), PDIC Vice President Nilo Aldrin M. Lucinario (OIC-Receivership and Liquidation Sector), BIR Regional Director Glen Geraldino (Revenue Region 8 - Makati City), and BIR Revenue District Officer Rebe Detablan (RDO 48 - Makati City).
Tax-related transactions of closed banks under liquidation of the Philippine Deposit Insurance Corporation (PDIC) will now be more efficient under a memorandum circular recently issued by the Bureau of Internal Revenue (BIR). The circular directs the centralization of these transactions in Revenue District Office (RDO) No. 48 in Makati City.
The BIR recently approved the request of PDIC to transfer the filing of the Income Tax Returns (ITRs) of all closed banks under liquidation and the resolution of tax issues of these closed banks to a single RDO to ensure convenience and consistency in treatment and to avoid incurring expenses for the closed banks. PDIC is the statutory liquidator of closed banks under Republic Act No. 3591, as amended, or the PDIC Charter. As liquidator of closed banks, PDIC is responsible for, among others, the filing of the ITRs of all closed banks. As of end-December 2017, a total of 676 closed banks are under PDIC liquidation.
BIR Commissioner Caesar R. Dulay, through a memorandum circular dated November 6, 2017, directed the transfer of filing of closed banks’ ITRs and tax payments from various RDOs to RDO No. 48-Makati City, the same RDO that has jurisdiction over PDIC’s principal office. This initiative supports PDIC’s function to expeditiously liquidate closed banks’ assets for the benefit of its creditors as well as cut on administrative costs in the liquidation of closed banks. Prior to the circular, tax-related transactions of closed banks are undertaken with various RDOs nationwide.
PDIC President Roberto B. Tan said that the centralization of all closed banks’ tax transactions under one RDO will simplify management as well as prevent unnecessary administrative expenses brought about by having to coordinate with many RDOs nationwide. PDIC clarified that this will not affect the collection efforts of the previous RDOs given that generally, closed banks no longer have income-generating activity.
As Liquidator of closed banks, PDIC manages and disposes of the assets of closed banks, and proceeds are used to settle the claims of creditors in accordance with the preference and concurrence of credits as provided by the Civil Code of the Philippines.
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The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is PHP500,000 per depositor. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.
PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.