SUMMARY OF SIGNIFICANT CTA DECISIONS

APRIL

Philippine Aerospace Development Corporation v. Commissioner of Internal Revenue

CTA Case No. 8346 April 5, 2016
Facts:
The BIR issued assessment notices for deficiency income tax, EWT, VAT, and withholding VAT.
On the same date, the BIR issued FAN. The taxpayer requested for re-investigation. The BIR
eventually issued a FDDA amending only the VAT component of the FAN. Taxpayer then
elevated the case to the CTA. Taxpayer alleged that it did not receive a PAN prior to the FAN.
Issue: Whether or not the taxpayer is liable for the deficiency taxes as assessed.
Ruling:
No. CTA reiterated the doctrine that the PAN is part of due process requirement. And that if the
taxpayer denies receipt of the PAN, the burden to prove otherwise is on the BIR. Since the BIR,
in this case, waived its right to present evidence, as well as failed to submit its memoranda as
ordered, then it was unable to discharge the burden of proving receipt of the PAN, and thus the
assessment is cancelled.
Philippine Plaza Holdings v. Commissioner of Internal Revenue, CTA Case No. 8609,
April 6, 2016
Facts:
Taxpayer was one day late in filing for its Quarterly VAT Return through the eFPS.
Consequently, it was assessed with a surcharge. Taxpayer filed for abatement of the surcharge,
but the BIR denied. Taxpayer elevated the decision to the CTA, questioning the denial.
However, taxpayer eventually paid the surcharge. It then filed an amended Petition for Review,
asking for a refund of the penalty paid.
The BIR sought to have the case dismissed for lack of jurisdiction since the taxpayer was
unable to file an administrative claim for refund prior to the amended Petition for Review.
Issue: Whether or not the CTA has jurisdiction to hear the case.
Ruling: The CTA preliminarily discussed the need to determine if taxpayer is entitled to
abatement prior to deciding on the refund. The Court said that the propriety of the abatement
will ultimately determine if taxpayer is entitled to a refund. However, the Court also found that
taxpayer did not file an administrative claim prior to filing the amended Petition for Review. An
administrative claim, being a requirement of law, is jurisdictional. Hence, the lack of which is
fatal to taxpayers claim.

National Transmission Corporation vs. Municipality of Labrador, Pangasinan,

represented by the Municipal Treasurer of Labrador, Pangasinan, CTA EB No. 1250, April
08, 2016
Facts:
Taxpayer was assessed with deficiency business taxes by the municipality. Taxpayer contested
the assessments, which were denied by respondent. The municipality then eventually issued
seizure orders against petitioners bank accounts. The proceeds thereof were issued a receipt,
but were marked paid under protest. Taxpayer thereafter filed for a refund of the money
seized, claiming such was an illegal payment of tax.
The RTC ruled in favor of the taxpayer, but the said ruling was reversed by the CTA division.
The Court said that taxpayer should have appealed the denial of its protest thirty (30) days after
receipt of denial.
Issue: Whether or not taxpayer is entitled to refund.
Ruling: No. The proper remedy for taxpayer was to have appealed the denial thirty (30) days
after receipt. Alternatively, taxpayer could have paid the taxes within sixty (60) days from receipt
of the assessment, then file for a refund thereafter. However, no such payment was made within
sixty days. The CTA considered that such non-payment shows that taxpayer did not intend to
claim for a refund in the first place. In fact, within the sixty (60)-day period, taxpayer filed protest,
showing that its intention is really to protest the assessments, and not claim for refund.

COMISSIONER OF INTERNAL REVENUE v. Philippine Tobacco Flue-Curing and Redrying

Corporation, CTA Case EB No. 1218 & 1220, April 11, 2016
Facts:
PTFC was assessed by the BIR with over 10,000,000 for various deficiency taxes. Upon
elevating the matter to the CTA, the Court division reduced the amount to around 2,000,000.
Both parties filed Motions for Partial Reconsideration. PTFCs MR did not have a schedule for
hearing, while the BIRs MR was received by PTFC three (3) days after the scheduled hearing
therein.
Issues:
1) Whether or not the findings in the FDDA should have been upheld;
2) Whether or not the MR of PTFC is defective;
3) Whether or not the MR of the BIR is defective;
4) Whether or not PTFC made compromise payment;
5) Whether or not schedule of payments presented by PTFC is sufficient evidence;
6) Whether or not Surcharge is applicable to all kinds of taxes
Ruling:
1) No. The BIR contends that the CTA division erred when it ruled on a matter that was not
even contested by PTFC. The CTA en Banc ruled that Appellate Courts have inherent
authority to review unassigned errors (1) which are closely related to an error properly
raised, or 2) upon which the determination of the error properly assigned is dependent,
or (3) where the court finds that consideration of the same is necessary in arriving at a

just decision of the case. Since PTFC is challenging the correctness of the assessment,
ruling on a disallowance made by the BIR, though not raised by PTFC, is within the
power of the court.
2) No. Based on the records, the BIR was served with a copy of PTFC's Motion for
Reconsideration through registered mail on April 22, 2014, on the same day PTFC filed
it in court. It does not appear that the BIR' s right to procedural due process was unduly
hampered as she was apprised of the filing as well as the contents of the said Motion.
On the other hand, the prejudice likely to be suffered by PTFC should the Court En Banc
insists on the strict application of the rule on notice of hearing is not commensurate to its
negligence in not complying with the said procedural rule. Accordingly, the Court En
Banc holds that the strict
application of Sections 4 and 5 of Rule 15 of the Rules of
Court may be relaxed in the present case.
3) No. Although PTFC received the MR 3 days after the scheduled hearing, the CTA
division still resolved to order PTFC to comment on the said motion. Such order is in lieu
of conducting a hearing. PTFC was given ample time to study and respond to the
Motion.
4) No. The Court En Banc notes that PTFC raised the issue regarding the alleged
compromise payment only in its Motion for Reconsideration filed before the Court in
Division. Moreover, PTFC failed to present any evidence to prove such allegation. While
the Court En Banc is aware that PTFC attached to its Motion for Reconsideration a
photocopy of its Application for Compromise Settlement of Internal Revenue Tax
Liabilities (BIR Form No. 2107) the said document, however, was not formally offered as
evidence. Also, since the BIR Form No. 2107 was not approved by the BIR evaluation
board as per Sec. 204 of the NIRC, it is without probative value.
5) No. PTFC merely presented the schedule of income payments without the
corresponding source documents such as invoices and official receipts. The
presentation of these documents is required as the same would have allowed the Court
in Division to verify the actual nature and accuracy of these income payments. Thus, for
failure of PTFC to present such source documents, the Court in Division correctly
sustained the BIR' s findings.
6) Yes. The text of Section 247(a) states without any doubt that the additions under
Chapter I, Title X are applicable to all taxes imposed under the code, i.e., the 1997
NIRC. The authority to impose additions under that provision clearly extends to all taxes
regardless of the title under which they are classified.
IP Contact Center Outsourcing, Inc. v. Hon. Commissioner Kim Henares, CTA Case No.
8605 April 18, 2016
Facts:
IP Contact Center (IPCC) was assessed by the BIR with deficiency Income Tax, VAT, and EWT
on income payments. IPCC interposes the following defenses: For IT, IPCC claims that the BIR
did not consider the adjusting entries. The discrepancy between the receipts per VAT returns
and receipts per books/ITR can be reconciled when taking adjusting entries into consideration.
For VAT, IPCC contends that it was not informed of the basis of BIRs findings. The BIR has
only mentioned the deficiency as per receipts subject to VAT per audit. Despite repeated

requests, BIR has not provided the details as to the receipts in question. Also, a part of the
deficiency VAT was for discrepancy of income payments per alphalist and per FS/ITR. Such
items are expenses and should not have been assessed as VATable. As for EWT, taxpayer
contends that professional fees were paid to General Professional Partnerships, thus, should
not be subjected to EWT.
Issues:
1) Whether or not IPCC is liable for deficiency Income tax;
2) Whether or not IPCC is liable for deficiency VAT; and
3) Whether or not IPCC is liable for deficiency EWT.
Ruling:
1) Yes. Despite the claim of IPCC that the discrepancy can be reconciled with adjusting
entries, it did not present any evidence to corroborate the claim. Also, the trail of
transactions causing the adjustments, the source documents, and ultimately, the link to
the outcome of the transaction, were not shown or substantiated.
2) No. Despite repeated requests, the BIR failed to inform the petitioner of the details
behind the receipts subject to VAT per audit. Considering that the basis of assessment
is the comparison of the receipts per VAT returns and receipts per audit conducted by
the BIR, the working computation or the details of the receipts per audit should have
been presented to show how the amount was computed. However, no evidence was
adduced to allow petitioner to effectively and intelligently refute the alleged discrepancy.
Sans any vital documents from which the Court may verify its correctness, the
assessment for deficiency VAT should be cancelled.
Also, on the deficiency VAT from the discrepancy between the alphalist and FS/ITR, the
Court ruled that, as held in several cases before the Court, when the only basis of
assessment was the finding that the income payments per alphalist were greater than
the expense per AFS and ITR, and no other proof was presented to show that the
difference brought about by the mathematical
comparison was an actual source of
taxable income, the assessment must be cancelled.
3) Yes. On payments made regarding the management contract, petitioner did not withhold
taxes on said payments made to its affiliate company. It did not offer any explanation as
to why it failed to withhold. As to the payments made to GPPs, IPCC failed to prove that
the recipients were indeed GPPs. Thus, the finding of the BIR was sustained.
One Network Bank, Inc. v. Commissioner of Internal Revenue, CTA Case no. 8725 April
18, 2016
Facts:
One Network Bank, Inc. is the result of two rural banks that merged, namely One Network Rural
Bank and Rural Bank of New Corella. It sought the refund of the Gross Receipts Tax (GRT) it
paid, invoking RA 7353. The said law exempts rural banks from most taxes, including GRT. The
refund was denied by the BIR, invoking RMC 66-2012. The said issuance limits the application
of RA 7353, that the tax exemption therein is only for a period of five (5) years, and may only be
applied to consolidated rural banks if the constituent rural banks were unable to claim the said

tax benefit. Also, if any or both of the constituent banks have not fully utilized the five years,
then the consolidated bank may only claim the tax benefit for the remaining balance. Upon
denial, the bank elevated the same to the CTA, arguing that RMC 66-2012 contravenes RA
7353 and RR 16-93, and that even if RMC 66-2012 is valid, it should not apply retroactively
against the bank.
Issues:
1) Whether or not RMC 66-2012 contravenes RA 7353 ;
2) Whether or not RMC 66-2012 applies retroactively.
Ruling:
1) No. RMC 66-2012 applies the principle that tax exemptions are construed in strictissimi
juris. It merely limits the application of the tax benefit granted by the law. The purpose,
as stated in RMC 66-2012, is to prevent rural banks that have already claimed the five
(5) year benefit from claiming another five years through consolidating with other rural
banks. Also, since rural banks are mandated by law to be incorporated, then the
Corporation Code applies to it. As the surviving corporation, the entity also has all the
rights, privileges, immunities of the constituent banks, including tax benefits. Thus,
once used up, the consolidated bank may not claim such anymore.
2) Yes. One Network Bank cannot claim the benefit of non-retroactivity of RMC 66-2012.
The rule on Non-retroactivity applies only in cases where there is revocation,
modification, or reversal of any rules and regulations, rulings, or circulars. One Network
Bank claims that RMC 66-2012 effectively revoked RR 16-93. However, RMCs cannot
override RRs since the former is issued by the Commissioner while the latter is issued
by the Secretary of Finance. The SoF can overturn the decisions of the CIR.
Also, the conflicting provisions may be reconciled as such:
(1) Section 7 of RR
No. 16-93 may refer merely to rural banks which are newly incorporated, i.e., those
which were
brought about not as a result of merger or consolidation; and
(2)
RMC No. 66-2012 covers those rural banks which have
been merged or consolidated
with other rural banks.
Prudentialife Plans, Inc. v. Commissioner of Internal Revenue, CTA EB No. 1219, April 19,
2016
Facts:
Taxpayer was assessed with deficiency VAT. It contested the same with the BIR, and eventually
the CTA Division. During the trial, taxpayer intended to present three witnesses. However,
taxpayer kept postponing the scheduled trial dates where it was supposed to present its
witnesses (around 13 times). The CTA Division ruled that taxpayer has waived its right to
present its witnesses, then ordered it to file its Formal Offer of Evidence (FoE). The BIR then
filed a Demurrer to Evidence. Taxpayer opposed, and moved to reopen the case for
presentation of evidence. Seeing that counsel of taxpayer was hospitalized for 2 months, the
Court decided to grant taxpayers motion. However, on the designated trial date, taxpayer did
not show up yet again. The BIR filed another demurrer which the CTA Division granted. Since
the taxpayer failed to file its FoE, it has no evidence to support its claim. taxpayer then appealed
the dismissal.

Issues:
1) Whether or not the legal basis of the assessment was valid.
2) Whether or not the demurrer was proper.
Ruling:
1) Yes. Taxpayer belatedly raised the issue of the validity. It was only raised in taxpayers
Motion for Reconsideration. The general rule is that appeals can only raise questions of
law or fact that (a) were raised in the court below, and (b) are within the issues framed
by the parties therein. An issue which was neither averred in the pleadings nor raised
during trial in the court below cannot be raised for the first time on appeal. It is axiomatic
in pleadings and practice that no new issue in a case can be raised in a pleading which
by due diligence could have been raised in previous pleadings.
2) Yes. To recall, taxpayer failed to file a Formal Offer of Evidence within the prescribed
period. Section 34, Rule 132 of the Rules of Court provides that "the court shall consider
no evidence which has not been formally offered." A formal offer is necessary because
judges are mandated to rest their findings of facts and their judgment only and strictly
upon the evidence offered by the parties at the trial. Its function is to enable the trial
judge to know the purpose or purposes for which the proponent is presenting the
evidence. On the other hand, this allows opposing parties to examine the evidence and
object to its admissibility. Moreover, it facilitates review as the appellate court will not be
required to review documents not previously scrutinized by the trial court.
Air Philippines Corporation v. Commissioner of Internal Revenue and Commissioner of
Customs, CTA Case No. 7966, 7990, & 8020, April 20, 2016
Facts:
Taxpayers franchise provide for tax benefits for importation of fuel, conditioned upon the
availability, or lack thereof, of locally produced Jet A-1 fuel at a reasonable price. On 2002, the
DoE released a certificate that Jet A-1 fuel is locally available at reasonable prices. The
following year, the BIR issued BIR Ruling 1-2003 revoking the tax benefits of airlines, including
taxpayer. The Ruling invoked the DoE certificate, pointing out that such proved that the
conditions for taxpayers tax benefits do not exist anymore. On 2007, taxpayer imported Jet-A1
fuel. It was then assessed with specific taxes on the basis of BIR Ruling 1-2003. Taxpayer paid
for the said taxes, but eventually filed for a refund. The refund case was then elevated to the
CTA. The BIR insists that taxpayer failed to exhaust administrative remedies. Taxpayer should
have appealed the BIR Ruling to the SoF, and the DoE Certificate to the OP.
Issues:
1) Whether or not taxpayer failed to exhaust administrative remedies.
2) Whether or not taxpayer is entitled to the refund.
Ruling:
1) No. As correctly argued by taxpayer, the basis of the findings in BIR Ruling No. 0012003 is the 2002 DOE Certification which only covered the year 2001 and the first half of
2002, while the subject importation in this case was made in the year 2007. Thus, the
Court may rule on taxpayer's claim for refund without ruling on the failure of taxpayer to
appeal the BIR Ruling No. 001-2003
2) There are 2 requisites for the tax exemption: a) that the imported materials were used in
the operations of taxpayer; and b) that said materials are not available locally in

sufficient quantities and at a reasonable price. As to the first requisite, taxpayer was able
to prove such through its witnesses and the certification from CAAP. As to the second
requisite, taxpayer also proved the same by presenting a comparison of price quotations
from different local sellers with the imported price. Taxpayer also presented the
estimated demand of Jet A-1 in the Philippines alongside the estimated volume of
production of the year. Such were sufficient to establish that the conditions for the tax
benefit in its charter are present.

Kep (Philippines) Realty Corporation v. Commissioner of Internal Revenue, CTA Case No.
8983, April 20, 2016
Facts:
Kep (Philippines) Realty Corporation (KPRC) purchased parcels of land within the Cebu Light
Industrial Park, a special economic zone. It then leased the same to Knowles Electronics
(Philippines) Corporation (KEPC). KEPC is a registered PEZA entity and qualified for VAT zerorating on its transactions with local suppliers. KPRC then applied for VAT refund with the BIR.
However, the BIR did not act on the application after 120 days. Thus, KPRC elevated the matter
to the CTA. The BIR alleged that KPRC failed to meet the requirements for VAT refund
attributable to zero-rated sales.
Issue:
Whether or not KPRC is entitled to refund.
Ruling:
Yes. The CTA ruled that KPRC met the following requirements for VAT refund: 1. that the
claimant must be a VAT-registered person; 2. that there must be zero-rated or effectively zerorated sales; 3. that input taxes were incurred or paid; that such input taxes are attributable to
zero-rated or effectively zero-rated sales; 5. that the input taxes were not applied against any
output VAT liability; and 6. that the claim for refund was filed within the two-year prescriptive
period. The above was proved as follows:
BIR insists that petitioner failed to submit the needed documents, thus, its claim must fail.
However, as borne by the records, KPRC simultaneously submitted the supporting documents
when it filed its administrative claim for refund or issuance of tax credit certificate. Even if KPRC
was remiss in submission of documents, this Court has consistently ruled in a number of cases
that the alleged non-submission of complete documents at the administrative level is not fatal to
a claim for refund or issuance of tax credit certificate at the judicial level. Moreover, if there is
indeed truth to the allegation of non-submission of complete documents before the BIR, the
latter could have simply denied outright the administrative claim on that ground, and not allow
the lapse of considerable length of time without action on KPRC's claim.
Mindanao II Geothermal Partnership v. Commissioner of Internal Revenue , CTA EB No.
1206, April 20, 2016
Facts:
Mindanao Geothermal dissolved as a partnership on the year 2010. Prior to said dissolution, it
was unable to claim its withholding tax payments for the calendar years 2008 and 2009. Upon
dissolution, it filed for a refund of the said unutilized withholding tax payments. Due to inaction of
the BIR, it filed for a refund with the CTA. The CTA division, however, denied the claim for

refund. Mindanao Geothermal appealed the decision to the CTA en banc, arguing that it is
exempt from the irrevocability rule as it is a dissolved entity.
Issue:
Whether or not Mindanao Geothermal is entitled to a refund.
Ruling:
No. Although it is true that Mindanao Geothermal falls under the recognized exception to the
irrevocability rule, it failed to prove that it has refundable taxes.
To sum up, a qualification to the application of the exception to the irrevocability rule is the
presentation of the short period return of the dissolved corporation. The short period return is
vital to determine whether upon dissolution (i.e., approval by the SEC of the dissolution), the
corporation's excess and unutilized CWT may still be claimed for refund or will need to be
applied to the corporation's outstanding taxes as of such dissolution. A dissolved corporation
claiming refund or issuance of TCC must present the short period return; otherwise, it will not be
able to sufficiently prove that the excess and unutilized CWT being claimed remained unutilized
upon dissolution. Tax refunds are, after all, construed strictly against the taxpayer.

Total (Philippines) Corporation v. Commissioner of Internal Revenue, CTA EB No. 1264,

April 20, 2016
Facts:
Total filed a claim for unutilized input VAT arising from zero-rated sales. The claims are from
both Export sales and sales to PEZA entities. Due to the inaction of the BIR, Total filed the
refund with the CTA. The CTA division initially ruled against Total. Upon Total's Motion for
Reconsideration, the CTA division amended its initial ruling and decided to partially grant the
Motion. It granted 16 million out of the 187 million being claimed by Total. Total then appealed
the amended decision to the CTA en banc.
Issue:
Whether or not Total is entitled to a refund.
Ruling:
No. One of the requisites for VAT refund from zero-rated sales is that the input VAT must
exceed the output VAT. The CTA en banc ruled that Sec. 112 should be read in conjunction
with Sec. 110(B). Sec. 110(B) states that when the input tax exceeds the output tax, the excess
shall be carried over to the succeeding quarter/s. But when input tax attributable to zero-rated
sales exceeds the output tax, the excess input tax may be refunded or credited against other
internal revenue taxes. Hence, for input tax attributable to zero-rated sales, it is only when input
tax exceeds the output tax that a refund or credit is proper.
In addition, the Total failed to prove that its sales were indeed zero-rated. The audited financial
statements submitted by Total failed to specifically state the effectivity period of registration of
the said entities with SBMA. The determination of effectivity period of the registration is required
since this will aid the court to ascertain whether or not the sales for taxable year 2008 were
made to duly registered ecozone entities. Absent any proof of the required period of coverage,
there is no way for the court to determine if the said registration covers the taxable year
involved.

Marubeni Philippines Corporation v. Commissioner of Internal Revenue, CTA Case No.

7223, April 21, 2016
Facts:
This is a remand of a previous case that went up to the Supreme Court. After the SC ruled that
the CTA has jurisdiction, the CTA is to decide on the entitlement of taxpayer to VAT refund. It
contends that it has sufficiently established that it has followed the requirements in A8 of RMC
No. 42-2003, which deals with offsetting agreements. Specifically, it argues that it has met the
following requirements:
a. Import documents which created liability accounts in favor of the foreign parent or affiliated
company;
b. Other contracts with the foreign or affiliated company that brought about the liabilities which
were offset against receivables from export sales;
c. Evidence of proceeds of loans, in case the claimant has received loans or advances from the
foreign company.
Issue:
Whether or not taxpayer established that is entitled to a refund.
Ruling:
No. Taxpayer misunderstood the requirements of the RMC. For item (a), taxpayer submitted
sales invoices that it issued to Marubeni-Tokyo. However, the main purpose of provision "A-8.a"
of RMC No. 42-2003 is to prove that the offsetting arrangement is actually in place, by proving
that taxpayer has payables to the foreign parent or its affiliates against which taxpayer's
receivables (i.e., from its sale of goods and services to Marubeni-Tokyo) were offset. On the
other hand, taxpayers evidence proved the liability of the foreign company, not its own.
As to item (b), taxpayer presented several service agreements which govern the services that
taxpayer will provide to Marubeni-Tokyo. However, it is clear that what is required is the
presentation of other contracts that bring about liabilities which are offset against receivables
from export sales. Clearly, the provision pertains to payables of taxpayer owed to Marubeni
Tokyo that will be offset against the receivables arising from its direct exports and commission
income, and not the other way around.
Lastly, taxpayer contends that it was able to present evidence of proceeds of loans by
submitting the Mutual Account Ledger which details the offsetting of payables between taxpayer
and Marubeni-Tokyo. However, it should be emphasized that the amount of foreign currency
remittances was the net amount of all transactions with Marubeni Tokyo which included not only
the receivables arising from export sales of goods and commission income but also advances
and reimbursements made by taxpayer for Marubeni Tokyo. Given that there were no
transaction flows, nor supporting schedules and reconciliations presented, it was not possible
for the Court to determine the amount of export sales and handling commission income that
were actually paid for in foreign currency or its equivalent.

Hoya Glass Disk Philippines Inc. v. Commissioner of Internal Revenue, CTA Case No.
8703, April 25, 2016
Facts:
Hoya declared dividends in January 2007. It made the actual payment in February the following
month. Thereafter, it filed the FWT return on March 10, 2007. In June 2010, Hoya received an
assessment from the BIR, assessing Hoya with surcharge of 50% and 20% interest for late filing
of the FWT return. The BIR maintains that Hoya should have filed the return and paid the FWT
on February 10, 2007 as per Sec. 4(1) of RR 6-2001. Hoya, on the other hand, maintains that
the right of the BIR to assess it on the said deficiency has prescribed, being more than 3 years
from the filing of the return.
Issues:
1) Whether or not the right to assess has prescribed;
2) Whether or not Hoya is liable for the 50% surcharge and 20% interest.
Ruling:
1) No. The CTA decided that the situation falls under one of the exceptions to the 3 year
prescriptive period, namely the filing of a false return. The CTA ruled that unlike
fraudulent returns, a false return need not be intentional. It must only be a deviation from
the truth. In the case at bar, the Court found that the Monthly Remittance Return of Final
Income Taxes Withheld filed on March 10, 2007 pertaining to cash dividend payable on
or before January 31, 2007, was a false return on the ground that it reflected therein that
the final income tax withheld relates "For the Month of February 2007", when it should
have been properly relating to taxpayer's payable of final income tax withheld "for the
Month of January 2007".
2) Not entirely. The Court ruled that the 50% surcharge is for willfully filing a false or
fraudulent return, or willful failure to file a return. In this case, Hoya was just clearly
mistaken when it filed the return, and made the FWT payment, on the 10th of the month
following the month of actual payment. Thus the penalty must be reduced to 25%, with
20% interest. (PJ dissents on the imposition of the 20% interest. His stand is that it
should only apply to IT, Donors Tax and Estate Tax.)