Provincial gov’t defends Oslob vs BIR’s tax claims

THE Cebu Provincial Legal Office (PLO) has defended the municipal government of Oslob against the tax collection demands from the Bureau of Internal Revenue (BIR).

Lawyer Donato Villa of PLO, left for Manila on Thursday to personally deliver to BIR Commissioner Cesar Dulay Capitol’s letter to protest their office’s efforts to tax Oslob town’s whale watching activities.

PLO head Orvi Ortega also questioned the issuance of a warrant to garnish P50 million in municipal funds deposited with the Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (LBP) to pay BIR’s tax claims.

He said that government funds cannot be subject of a garnishment order.

“Mipasangat ta sa level sa commissioner sa BIR og formal nga protest letter relative sa issuance sa warrant of garnishments sa mga depository banks sa Oslob to the amount of more than P50 million,” Ortega said.

The town’s depository banks, Ortega said are also making consultations with their legal departments on BIR’s garnishment order.

Oslob Mayor Jose Tumulak said that having their bank accounts frozen would surely hamper the delivery of basic services to their more than 27,000 constituents.

“Og i freeze ang account sa LGU, dili nata maka-withdraw, makaapektar gyod sa operation sa LGU. Naghulat ta unsay action sa banko (If our the LGU’s account is frozen, we will be barred from making withdrawals thus affecting LGU operations. We are still waiting for action from our banks),” he said.

Tumulak said they plan to use revenues earned from their whale shark viewing activities for the planned renovation of their municipal hall and market among others.

BIR sent demand letters to the municipal government on December 2016 to seek payment of P24 million in taxes for 2012 and another P27 million in 2013.

A copy of the demand letter was said to have been recieved at the town hall on January 2017.

BIR’s computation still does not include tax dues for the proceeding years.

Ortega said that while BIR showed proof that the letter was received at the municipal hall, it was unclear who actually received said letter.

He said that only the signature of the receipt was reflected on BIR’s received copy. It was also unclear if the recipient was authorized to receive the demand letter.

Unless clarified who the signatory was, the receipt of the demand letter will remain “meaningless.”

“We consider the FLD (Formal Letter of Demand) as void. Therefore, no basis for the issuance sa warrant sa garnishment,” Ortega said

On August 15, BIR served a notice of garnishment to Oslob to cover for unpaid taxes generated from their whale shark watching operation for the years 2012 and 2013.

Tumulak said they get a 30 percent share or around P10 million per month from said revenues. The bulk or 60 percent of the revenues goes to the association of boatmen who assist the visiting tourists while the remaining 10 percent goes to Barangay Tan-awan.

Tumulak said they merely collect regulatory fees that are not subject to BIR taxes.