BIR hits Manila with P684-M back taxes

MANILA, Philippines - The Bureau of Internal Revenue (BIR) is asking the Manila city government to pay P684 million in back taxes since 2007, left behind by then mayor Alfredo Lim, Mayor Joseph Estrada said yesterday.

In a telephone interview with The STAR yesterday, Estrada said the BIR sent his office a letter dated April 3 informing him that the city government has tax liabilities – covering the period from 2007 to April 15 this year – that amount to a total of P684,418,057.76, including interest.

Estrada said he has ordered the city’s legal department to collate all evidence for the filing of appropriate charges against the city treasurer under Lim’s administration.

“I inherited a bankrupt city government. All the computers were also destroyed by my predecessor. There is an intention to hide. The city government cannot automatically pay its tax liabilities. I have asked the BIR to give us at least six months to pay the city government tax liabilities that was left by my predecessor,” Estrada said.

Estrada said Lim also left Manila an electricity bill of more than P630 million and a water bill of P67 million.

The BIR said the city government’s tax liabilities in 2007, listed in a Jan. 14, 2011 assessment notice, had been referred to the tax agency’s Manila Revenue Region 6 “for judicial action to enforce collection.”

The BIR also told Estrada that Commissioner Kim Henares rejected on Feb. 8, 2012 the city government’s Nov. 5, 2011 request for a compromise settlement of 10 percent of the basic taxes due “in view of the financial condition of the city government.”

The BIR also denied the city government’s request on April 20, 2012 for a reconsideration and reinvestigation of the offer of compromise, citing that “the subject assessments have already become final and executory.”