The Court of Tax Appeals (CTA) ordered the Bangko Sentral ng Pilipinas (BSP) to remit to the Bureau of Internal Revenue (BIR) P2.3 billion in deficiency excise tax due the government from its purchase of gold.

In a 39-page decision dated February 24, 2010, CTA Associate Justice Olga Palanca-Enriquez sustained the earlier assessment of the BIR and ordered BSP to pay the multi-billion pesos deficiency due on the gold purchased from small-scale miners from 2001 to 2006.

BIR Deputy Commissioner for Legal and Enforcement Gregorio V. Cabantac lauded the decision and said the BIR will move for the immediate collection of the amount but will also file a motion for reconsideration before the CTA.

“The validity of the BIR assessment was upheld by the CTA. While the deficiency excise tax assessed was sustained, the imposition of surcharges and interest was denied. We are now preparing the motion for reconsideration,” Cabantac said in a memorandum to BIR Commissioner Joel L. Tan-Torres.

The case stemmed from an Assessment Notice issued by the BIR against BSP on December 20, 2007 where the bureau sought from the central bank a total of P4.6 billion in tax deficiency, including surcharges and interest.

The BSP submitted to the BIR a protest letter on January 18, 2008 calling for a cancellation of the BIR ruling on the ground that Administrative Order No. 34 of the Department of Environment and Natural Resources (DENR) exempts from the payment of excise tax gold sold to the BSP.

But this motion was denied by the BIR on April 2, 2008, prompting the BSP to bring the case before the CTA to seek a reversal of the BIR decision.