Osmeña wants Abraham Lee to stop doing business in Cebu City

Rescuers retrieve the body of one of the fatalities from the debris of the bunkhouse that collapsed on Tuesday, March 6, 2018, in Barangay Lahug, Cebu City.

THREE days since the collapse of his company’s bunkhouse in Barangay Lahug that killed five workers and critically injured four others, Cebu City Mayor Tomas Osmeña wants businessman Abraham Lee to already cease from doing business in the city.

Osmeña also called Lee a “tax evader” because of the failure of his company J.E. Abraham C. Lee Construction and Development Inc. (ACLI) to settle their tax obligations with City Hall.

“We are going to stop his (Lee’s) business, not only his bunkhouses, but we’re going to stop his business (in the city),” the mayor said in his press conference on Thursday.

Lee did not issue any comment on the mayor’s recent pronouncement, but he posted on his company’s Facebook page at around 2 p.m. the copies of two business permits that were issued to him.

Both were renewal permits issued on Sept. 6 and 11, 2017 and carried the same business address, which is 901-D Caimito Street, Basak San Nicolas, Cebu City.

The first renewal permit dated Sept. 6, 2017 was issued to Joseph Emmanuel Lee. It carried the business name J.E. Abraham C. Lee Construction and Development that is engaged in construction services with a declared gross capital investment of P90.46 million. It was declared as a single ownership company.

The second renewal permit dated Sept. 11, 2017 was issued to real estate developer J.E. Abraham C. Lee Construction and Development Inc. (ALCI), which declared a gross capital investment of P53.9 million.

It declared a corporation as ownership form and named Joseph Emmanuel Abraham C. Lee as their authorized representative.

Lee also posted a copy of the Securities and Exchange Commission (SEC) registration of his real estate company issued on July 7, 2015.

Cebu City’s Business Permit and Licensing Section (BPLS) head Claire Cabalda confirmed issuance of the two business renewal permits, but she said that they were still revalidating Lee’s business records.

Cabalda said they were also investigating why Lee last renewed the permit of his old business in 2001 and instead operated under a new business name.

Lee first applied for a permit for his construction business in 2013 and in 2016 for his real estate development business, said Cabalda.

Tax Delinquencies

City Treasurer Juvie Morellos said that ALCI paid P86,000 in taxes last year. But they are yet to pay a balance of P263,000 of their P349,000 total tax due for the year.

“Dunay mga adjustment sa taxes because they have construction services and real estate develop(ment). Murag ang iyahang gross receipts nagkabaylo,” she said. (There were tax adjustments because they have construction services and is also a real estate developer. I think he mixed up his gross receipts.)

Morellos said company records showed that gross receipts for their construction services were filed under their real estate development services while their gross receipts for their real estate development went to their construction services.

Tax rates for real estate development is way higher than that of construction services, which resulted to delinquencies in their tax payments with City Hall.

Real estate developers are required to pay taxes that is equivalent to one percent of their gross sales while contractors are required to pay taxes amounting to three-fourth of one percent of their gross sales.

However, Morellos said, it is a prerogative of the mayor to choose who among the businesses should operate in the city.
Osmeña, she added, also has the prerogative to order the closure of Lee’s businesses.

Tax evader

Mayor Osmeña said he is unhappy with how ACLI has been operating their business in the city.

Osmeña said he was irritated because Lee did not bother to apply for a building permit for his four-storey Lahug bunkhouse.

“He (Lee) has not filed for any building permit. He gets caught so, he is banned. These are the tax evaders,” Osmeña said during his press conference.

Five of ACLI’s construction workers died while four others were critically injured following the collapse of their bunkhouse in Barangay Lahug at dawn on Tuesday.

Two years ago, a construction worker also died after the retaining wall of their Labangon project fell on him.
Lee told labor officials on Wednesday that an earthquake and loss of some of the clamps of their steel bars caused their four-storey bunkhouse to collapse.