1) What extent will a Warrant of Garnishment apply? Does it apply to a Taxpayer’s goods?
2) Will the BIR serve this upon Bureau of Customs?
---------------------------------------------------------------------------------------------
I. Applicable Laws, Revenue Memorandum Orders
A. RA No. 8494, National Internal Revenue Code, as amended by RA No. 10963 (TRAIN
Law) and further amended by RA No 11534. (CREATE Law), Section 208,
“SEC. 208. Procedure for Distraint and Garnishment. –
The officer serving the warrant of distraint shall make or cause to be made an
account of the goods, chattels, effects or other personal property distrained, a
copy of which, signed by himself, shall be left either with the owner or person
from whose possession such goods, chattels, or effects or other personal
property were taken, or at the dwelling or place of business of such person
and with someone of suitable age and discretion, to which list shall be added
a statement of the sum demanded and note of the time and place of sale.
Stocks and other securities shall be distrained by serving a copy of the warrant
of distraint upon the taxpayer and upon the president, manager, treasurer or
other responsible officer of the corporation, company or association, which
issued the said stocks or securities.
Debts and credits shall be distrained by leaving with the person owing the
debts or having in his possession or under his control such credits, or with his
agent, a copy of the warrant of distraint.
The warrant of distraint shall be sufficient authority to the person owning the
debts or having in his possession or under his control any credits belonging to
the taxpayer to pay to the Commissioner the amount of such debts or credits.
Bank accounts shall be garnished by serving a warrant of garnishment upon
the taxpayer and upon the president, manager, treasurer or other responsible
officer of the bank.
Upon receipt of the warrant of garnishment, the bank shall turn over to the
Commissioner so much of the bank accounts as may be sufficient to satisfy the
claim of the Government.” (Emphasis and underscoring supplied)
B. Revenue Memorandum Order No. 41-2019, Prescribing the Required Documents in the
Processing of the Request for the Lifting of Warrant of Garnishment, Notice of Tax Lien,
Notice of Levy and Notice of Encumbrance
“I. BACKGROUND
Warrant of Garnishment (WG), Notice of Tax Lien (NTL), Notice of Tax Levy
(NOL) and Notice of Encumbrance (NOE) are generally issued to persons who
have either control or custody of the properties owned by taxpayers with
outstanding tax liabilities with this Bureau in order to enforce the collection
remedies provided under the Tax Code, as amended. These warrants and
notices prohibit the persons having control or custody of the properties of the
delinquent taxpayers to dispose the same to other parties other than this
Bureau since these properties shall be taken for partial/full settlement of the
owner-delinquent taxpayer’s tax liabilities.
Xxx” (Underscoring supplied)
and
“IV. PROCEDURES IN THE ISSUANCE OF THE “NOTICE OF LIFTING
xxx
4. Prepare the “Notice of Lifting of WG/NTL/NOL/NOE” addressed to the
concerned third party for the approval and signature of authorized signatory:
C. RA No. 10863, Customs Modernization and Tariff Act (CMTA), Section 301,
“SEC. 301. Customs Control Over Goods. – All goods, including means of
transport, entering or leaving the customs territory, regardless of whether
they are liable to duties and taxes, shall be subject to customs control to
ensure compliance with this Act.
In the application of customs control, the Bureau shall employ audit-based
controls and risk management systems, use automation to the fullest extent
possible, and adopt a compliance measurement strategy to support risk
management.
The Bureau shall seek to cooperate and conclude mutual administrative
assistance agreements with other customs administrations to enhance customs
control. The Bureau shall consult, coordinate, and cooperate with other
government regulatory agencies, free zones authorities, and the customs
stakeholders, in general, to enhance customs control.” (Emphasis and
underscoring supplied)
D. RA No. 10863, Customs Modernization and Tariff Act (CMTA), Section 1137
“SEC. 1137. Exclusive Jurisdiction of the Bureau. – Jurisdiction over imported
goods and goods for exportation shall be exclusive to the Bureau, or the
Secretary of Finance, when under review by the latter, subject to the
proceedings described in this title.
Except for the CTA, no court may issue any order or decision until all the
remedies for administrative appeal have been exhausted.” (Emphasis and
underscoring supplied)
II. Jurisprudence (with Issuance of Warrant of Distraint/Levy/Garnishment)
A. Sps. Emmanuel D. Pacquiao and Jinkee Pacquiao v. CTA First Division (G.R. No. 213394,
April 6, 2016) (against the Sps.’ Bank accounts/deposits)
B. Philippine Refining Company (now Unilever Philippines, Inc.) v. CA, CTA, CIR (G.R. No.
118794, May 8, 1996) (against deposits of petitioner as City Trust Bank)
C. Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation (G.R. No.
197945, July 9, 2018) (Warrant of Garnishment and Distraint and/or Levy against
Respondent, not specific)
D. Oceanic Wireless Network Inc. v. CIR (G.R. No. 148380, December 9, 2005) (Warrant of
Garnishment and Distraint and/or Levy against Respondent, not specific)
