Land Transportation Office

BIR to Stradcom: Don’t blackmail gov’t

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BIR to Stradcom: Don’t blackmail gov’t
Stradcom threatens to halt services to the Land Transportation Office due to a warrant of distraint/levy issued by the tax bureau

MANILA, Philippines – Bureau of Internal Revenue (BIR) Commissioner Kim Henares warned Stradcom, provider of IT services for the Land Transportation Office (LTO), against blackmailing the government.

On Wednesday, August 7, Stradcom sent Transportation Secretary Joseph Emilio Abaya a notice of force majeure, saying it would stop rendering services to LTO effective Monday, August 12. It said its operations are crippled due to the warrant of distraint/levy issued by BIR last July 31.

A warrant of distraint/levy freezes all of a company’s properties and bank accounts until its tax liability is paid.

Henares, however, insisted that the distraint order was valid since Stradcom failed to pay its taxes amounting to P317 million in 2011.

“Pay us taxes and all of that levy will be lifted. Isn’t that blackmailing iyong ginagawa nila (what they’re doing)? Kung ako iyan sasampahan ko iyan ng economic sabotage.”

(If it were up to me, I would charge the company for economic sabotage.)

The tax liability, Henares explained, was even declared in the Income Tax Return filed by Stradcom in 2011.

The same amount of tax liability was included in the report of the Office of the President after it released payment to Stradcom worth P1 billion this January, she added.

On the other hand, Stradcom maintains through President Cezar Quiambao that the LTO still owes Stradcom over P4 billion, and has not made any regular payments for almost 3 years.

But Henares said, “whatever problem they had with LTO, DOTC, it has nothing to do with the tax payment.”

Stradcom to halt LTO services

Quiambao stressed in its letter to Abaya that “with the (BIR) notice, the impairment at anytime of Stradcom’s services to the Republic cannot give rise to a claim by the Republic against Stradcom under our extended LTO IT Project BOO Agreement.” 

“Stradcom cannot over-emphasize the gravity of such warrant having been served upon the company, because it effectively cripples the operations of the company as it commands the distraint of the personal properties (ex. bank accounts), and levy of the real properties of Stradcom, and then to further sell and/or forfeit the same in favor of the Republic to satisfy P488.377 million in alleged 2011 deficiency income taxes of the company,” he added.

Quiambao explained the P1 billion payment made last January 2011 remains insufficent to trigger the P317 million income tax due for the same calendar year.

The Stradcom chief asked the DOTC to interfere as halting the IT services of LTO would also result to incovenience to the public and losses for the government.

“Maybe our last appeal to your good offices to avert this crisis and lift the foregoing force majeure conditions noting that the stoppage of operations of not only Stradcom and LTO will affect vital public services that generate about P1.5 billion in monthly revenues for the government,” he added.

Stradcom’s 13-year contract already expired last February, but DOTC decided to extend it as the evaluation process is still ongoing for the hiring of a new contractor. –

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