What is a BIR Commissioner’s Basis on Suspending a Taxpayer’s Business?

BIR Commissioner

Being a BIR Commissioner entails a big responsibility in this government office. A BIR Commissioner does more than interpreting tax laws, deciding on tax cases, accrediting and registering tax agents, prescribing real property values, and even delegating power to subordinates.
During the tax season, an important task that a BIR Commissioner does is suspending business operations of taxpayers. It might sound dreadful, but it is a responsibility that a commissioner must do as the bureau imposes strict laws.

As a BIR Commissioner, he, too has the power to suspend a business or temporarily close a business establishment. The grounds for these actions according to Section 115 of the Tax Code include:

(a) In the case of a VAT-registered Person.
(1) Failure to issue receipts or invoices;
(2) Failure to file a value-added tax return as required under Section 114; or
(3) Understatement of taxable sales or receipts by thirty percent (30%) or more of his correct taxable sales or receipts for the taxable quarter.
(b) Failure of any Person to Register as Required under Section 236.

The temporary closure of the establishment shall last not less than five (5) days and shall be lifted only upon compliance with the requirements prescribed by the Commissioner.

In fact, Oplan Kandado was implemented in 2009 as a program to suspend or temporarily close non-compliant taxpayers and violators. Aside from doing these, Oplan Kandado aims to inform and educate taxpayers on proper taxpaying efforts and compliance to VAT regulations.

Even when a business has been suspended or temporarily closed, it shall not preclude the BIR from filling the appropriate charges under the Run After Tax Evaders (RATE) program. This may happen when evidences justify against the taxpayer or people concerned.


If you want to learn more about BIR Audit, join Mr. Ruperto Somera, former Director of Bureau of Internal Revenue, as he talks about “Top Secrets of Handling BIR Audit”. This event is set to happen on September 29, 2017, at the RCBC Plaza Makati.

For more information, visit https://powermaxph.com/new/.