Makati hopes BIR will honor settlement deal on upaid taxes


Posted at Jul 22 2010 02:24 PM | Updated as of Jul 23 2010 11:09 PM

MANILA, Philippines - The Makati City government is hoping that the new Bureau of Internal Revenue (BIR) chief will uphold a previous settlement agreement regarding a P1.2-billion tax the city owes the agency.

Kenneth Dasal, Makati City legal officer, said the deal was signed by former BIR Commissioner Joel Tan-Torres, Makati City Administrator Marjorie De Veyra, and Makati Revenue District Officer Teodoro Galicia.

"We had reached an agreement with the former BIR chief, and we are hopeful that Commissioner Kim Henares will uphold the agreement," Dasal said.

Under the terms of the agreement, Makati will pay a total of P400 million, with P200 million to be paid "as soon as possible upon execution of the compromise agreement and other necessary documents." The balance of P100 million will be paid in 2011 and the remaining P100 million in 2012.

A payment form, in the amount of P200 million, had already been signed, added Dasal.

Dasal said Makati Mayor Jejomar Erwin Binay Jr., son of vice president Jejomar Binay, who was the former Makati City mayor, wrote Henares last July 19 asking for a confirmation of the settlement agreement.

In his letter, the younger Binay said the city government had proposed on May 19 to settle all claims of the BIR covered by the case pending before the Court of Tax Appeals.

"The foregoing was duly approved as shown by the attached payment form duly signed by the former BIR commissioner. With your appointment as the new commissioner of the BIR, and as a matter of courtesy, we wish to seek your confirmation of the said settlement and the manner of payment thereof," the letter read.

Last April, the BIR slapped a lien on Makati's properties, including its 20-storey city hall, in an attempt to recover P1.2 billion worth of alleged unpaid taxes from 1999 to 2001.

The tax agency said the move came after months of negotiations with city officials failed to arrive at a final agreement.

The BIR has been running after government agencies, including the Bangko Sentral ng Pilipinas and the Metro Manila Development Authority, over back taxes to show it does not discriminate between public and private taxpayers.