Section 3
SEC. 3. Section 16 of the National Internal Revenue Code is hereby amended to read as follows: “SEC. 16. Power of the Commissioner to make assessments. – [a] Examination of returns and determination of tax. – After a return is filed as required under the provisions of this Code, the Commissioner shall examine it and assess the correct amount of the tax. The tax or deficiency tax so discovered shall be paid upon notice and demand from the Commissioner. Any return, statement or declaration filed by any person in any revenue office bearing or purportedly bearing the official or receiving seal or stamp of a revenue office wherein the same is filed shall not be withdrawn: Provided, however, that the same may be modified or changed by filing another amended return, statement or declaration. “[b] Failure to submit required reports, statements, etc. – When a report required by law as a basis for the assessment of any national internal revenue tax shall not be forthcoming within the time fixed by law or regulation or when there is reason to believe that any such report is false, incomplete or erroneous, the Commissioner shall assess the proper tax on the best evidence obtainable. “In case a person fails to make and file a required return or list at the time prescribed by law, or makes willfully or otherwise, a false or fraudulent return or list, the Commissioner shall make the return from his own knowledge and from such information as he can obtain through testimony or otherwise. In any such case, the Commissioner may make a return or amend any return and any return so made or amended shall be prima facie good and sufficient for all legal purposes. “[c] Authority to conduct inventory taking, surveillance and to prescribe presumptive gross sales and receipts. – The Commissioner may at any time during the taxable year order inventory taking of the stock-in-trade of any taxpayer as a basis for determining his internal revenue tax liabilities or may place the business operations of any person, natural or juridical, under observation or surveillance if there are reasons to believe that such person is not declaring his correct income and receipts for internal revenue tax purposes. The findings may be used as a basis for assessing the taxes for the other months or quarters of the same or different taxable years and such assessment shall be deemed prima facie correct. “When it is found that a person has failed to issue receipts and invoices in violation of the requirements of Section 181, or when there is reason to believe that the books of accounts or other records do not correctly reflect the declarations made or to be made in a return required to be filed under the provisions of this Code, the Commissioner, after taking into account the sales, receipts, income or other taxable base of other persons engaged in similar businesses under similar situations or circumstances or after considering other relevant information, may prescribe a minimum amount of such gross receipts, sales, and taxable base, and such amount so prescribed shall be prima facie correct for purposes of determining the correct internal revenue tax liabilities of such person. “[d] Authority to terminate taxable period. -When it shall come to the knowledge of the Commissioner that a taxpayer is retiring from the business subject to tax or intends to leave the Philippines, or remove his property therefrom, or hide or conceal his property, or perform any act tending to obstruct the proceedings for the collection of the tax for the past or current quarter or years or render the same totally or partly ineffective unless such proceedings are begun immediately, the Commissioner shall declare the tax period of such taxpayer terminated at any time and shall send the taxpayer a notice of such decision, together with a request for the immediate payment of the tax for the period so declared terminated and the tax for the preceding year or quarter, or such portion thereof as may be unpaid, and said taxes shall be due and payable immediately and shall be subject to all the penalties hereafter prescribed, unless paid within the time fixed in the demand made by the Commissioner. “[e] Authority of the Commissioner to prescribe real property values. – The Commissioner is hereby authorized to divide the Philippines into different zones or areas and shall, upon consultation with competent appraisers both from private and public sectors, determine the fair market value of real properties located in each zones or area. For purposes of computing any internal revenue tax the value of the property shall be whichever is the higher of: “[1] the fair market value as determined by the Commissioner; or “[2] the fair market value as shown in the schedule of values of the Provincial and City Assessors. “[f] Authority of the Commissioner to inquire into bank deposit accounts. – The provisions of Republic Act No. 1405 to the contrary notwithstanding, the Commissioner is hereby authorized to inquire into the bank deposits of a decedent for the purpose of determining the gross estate of such decedent. In case a taxpayer offers to compromise the payment of his tax liabilities on the ground that his financial position demonstrates a clear inability to pay the tax assessed, his offer shall not be considered unless he waives his privilege under the said law and such waiver shall serve as authority of the Commissioner to inquire into the bank deposits of said taxpayer. “[g] Authority to accredit and register tax agents. – The Commissioner may require prior accreditation and registration, based on competence and moral fitness, of persons and general professional partnerships or their representatives in the preparation and filing of required tax returns, statements, reports, memoranda, or in appearing or in filing protests or papers with the Bureau for taxpayers. For this purpose, the Commissioner is empowered to create national and regional accreditation boards and to designate from among the ranks of senior officials of the Bureau, one chairman and two members in each board and issue the necessary rules and regulations subject to the approval of the Minister of Finance.”