BIR explains closure order, says Megaworld 'will now comply' with RDO audit


Posted at May 20 2022 04:17 PM | Updated as of May 20 2022 06:53 PM

MANILA (UPDATED) - The Bureau of Internal Revenue on Friday said the now suspended closure order against Megaworld Corp stemmed from its initial refusal to comply with an audit following a dispute on jurisdiction over several properties. 

Failure to comply with the audit is a ground for closure, BIR Regional Director Eduardo Pagulayan Jr said in a statement. 

The investigation involves verification of taxes on One-Time Transactions (ONETT) on the sale or transfer of properties by Megaworld, the BIR said.

Pagulayan said BIR Revenue Region No. 8B - South NCR has jurisdiction over such enforcement activity.

Megaworld is a large taxpayer under the jurisdiction of the Large Taxpayer Service of the BIR National Office. But the ONETT falls under the jurisdiction of the BIR Regional Office "where the property is located," the tax bureau said.

"The said properties being subjected to investigations are located within the premises of Taguig City, which clearly falls within the jurisdiction of the said BIR Regional Office and not with the Large Taxpayer Service," the BIR said.

"At first instance, Megaworld refused to comply with the BIR audit. The BIR Regional Office, however, found that the said corporation failed in its compliance and reportorial requirements under the Tax Code," it said.

On Wednesday, the BIR said it would issue a closure order to Megaworld Corp. The closure order has since been suspended.

"It was resolved that Megaworld will now comply with the audit. Hence, closure was set aside. Now, the investigation is ongoing," the BIR said. 

Megaworld earlier said it had a "disagreement" with the BIR regarding jurisdiction but it has since been clarified. It also said it has no pending unpaid liabilities and has vowed to cooperate with the tax authorities. 

House Committee on Ways and Means Chairman Joey Salceda on Friday urged the BIR the further explain the matter since the "bizarre" event undermines the stability of the country's tax institution and financial market since Megaworld is a listed company under the Philippine Stock Exchange. 

Megaworld has yet to issue a new statement.


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— With a report from Jessica Fenol, ABS-CBN News