BIR padlocks popular restaurant for failure to pay correct taxes

MANILA, Philippines - The Bureau of Internal Revenue (BIR), the government’s main revenue earner, yesterday padlocked a popular restaurant for failing to pay the right amount of taxes.

The agency served the closure order on Food Alchemy Inc., popularly known as Thai-in-a-Box at the Greenbelt Mall, Legaspi Village, Makati City.

Thai-In-A-Box is the 48th business establishment padlocked by the BIR under its Oplan Kandado Program, the program that orders that temporary closure of companies that have tax deficiencies.

BIR regional director for Makati Alfredo Misajon said the company failed to rectify its tax violations even after it was given the opportunity through a 48-hour notice and a five-day value-added tax (VAT) compliance notice.

According to an investigation conducted by the BIR, Thai-In-A-Box understated its sales by 47 percent in 2008 and by 41 percent for the first three months of 2009.

The agency said the establishment had total sales of P4.6 million for 2008 and P1.1 million for the first quarter of 2009.

However, the BIR said Thai-In-A-Box’ declared sales amounted to only P2.46 million in 2008 and roughly P700,000 from January to March 2009.

The agency said that the total understatement of sales by Thai-In-A-Box has amounted to P2.7 million while its total VAT obligations amount to P325,597.

A BIR official said that under the agency’s Oplan Kandado Program, business establishments are given a chance to rectify their tax deficiencies.

“Let this serve as a mirror for other taxpayers similarly-situated. We will help them rectify their violations. If they persist in their unwanted practices, however, we will not hesitate to impose the full force of the law,” BIR’s East Makati Revenue District Officer Ricardo Espiritu said yesterday.

Under the program, grounds for closure include failure to file a VAT return, understating taxable sales or receipts or failure to register the business.

Furthermore, the closure of a business establishment shall last for at least five days and shall be in force until the taxpayer rectifies the violation.

The closure order shall only be lifted by the BIR when there has been subsequent filing or amendment of returns with the payment of the tax as well as penalties.