In a 12-page decision dated May, the tax court turned down an appeal filed by Lepanto Consolidated Mining Company that it should be allowed to claim such due to loss of income.
The court said it saw "no legal basis" to the firm's claim that it is entitled to the abatement of surcharges and compromise penalties in the aggregate amount of PHP10.23 million due to continuous heavy losses from 2007 to 2011.
The tax court said the Tax Code empowers the Commissioner of Internal Revenue to abate or cancel a tax liability but only under certain circumstances as when the tax or a portion of it "appears to be unjustly or excessively assessed" or if the "administration and collection costs involved do not justify the collection of the amount due".
The CTA said the firm cannot rely on a provision in Revenue Regulation 13-2001 which allows abatement of taxes on the ground of continuous heavy losses since it is a mere implementation rule which cannot prevail over the tax code itself.
"An implementing rule or regulation cannot modify, expand or subtract from the law that it is intended to implement. Any rule that is not consistent with the statute itself is null and void," the CTA said.