COA mum on proposed P34M tax condonation

So as not to preempt any audit action, the Commission on Audit refused to comment on a proposed ordinance condoning the interest and surcharges the city government has imposed upon the Philippine Long Distance Telecommunications amounting to over P34 million.

"This office opt not to render any comment regarding the subject request since to do so would preempt any audit action the Commission might do in consequence of the said proposed ordinance by the Sangguniang Panlungsod," wrote Roy Ursal, Regional Legal and Adjudication Director.

The letter dated December 8, 2005 was received by councilor Edgardo Labella, head of the city's committee on laws, ordinances, public accountability and good government, on March 7, 2006.

Labella's committee has requested comment and/or recommendation from COA before the proposed ordinance's final deliberation at the city council session. Earlier, Mayor Tomas Osmeña said the penalty has to be condoned otherwise the city cannot spend the P41 million that PLDT paid as a compromise in 2003. The city and PLDT reportedly agreed to condone the penalties first.

While it refused to give specific comment on the ordinance, Ursal said in the letter that COA Memorandum No. 92-778 dated August 31, 1992 "is relevant for resolution of the subject request".

"Based on said COA Memorandum, the circumstances that would warrant the granting of tax exemption or relief are not present. Likewise, attention is invited to paragraphs (a) and (b), Article 282 of the Rules and Regulations implementing R.A. 7160 which provide similar guidelines on the grant of tax exemptions and relief by local government units," the letter reads.

Memorandum 92-776 deals with Memorandum Circular No. 153 issued by the Office of the President on June 4, 1992 prescribing the guidelines for the implementation of tax exemption privileges under the Local Government Code of 1991.

The Local Government Code of 1991 states that "local government units may, through ordinances duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary." - Joeberth M. Ocao