San Jose Builders faces complaint over unpaid customs taxes

MANILA, Philippines – The Bureau of Customs (BOC) on Tuesday, April 25, filed a complaint against real estate developer New San Jose Builders Company and its 3 surety companies for failing to settle its tax obligations related to the construction of the Philippine Arena.

The BOC said New San Jose failed to pay duties and taxes on the importation of contruction-related items from 2012 to 2013, when it built the Iglesia ni Cristo's Philippine Arena in Malolos, Bulacan.

Under Section 86 of Republic Act 9593 or the Tourism Act of 2009, companies within the Tourism Enterprise Zone are granted certain privileges.

It states that “subject to rules and regulations which properly define capital investments and equipment necessary for various kinds of tourism enterprises, registered enterprises shall be entitled to an exemption of 100% of all taxes and customs duties on importations of capital equipment.”

But New San Jose was required to post bonds to cover duties and taxes for its shipments, because it did not have certificates of exemption from the Department of Finance (DOF).

Surety companies Centennial Guarantee Assurance Corporation (CGAC), Intra Strata Assurance Corporation (ISAC), and Philippine Fire and Marine Insurance Corporation (PFMIC) issued bonds amounting to P947.29 million.

The real estate developer was required to pay duties and taxes since the DOF did not grant the exemption. The district collector of the Port of Manila (POM) sent demand letters to New San Jose and the 3 surety companies in 2015.

The BOC said that in December 2015, the acting chief of the POM’s Bonds Division recommended the forfeiture of the bonds for the failure of San Jose and the surety companies to settle their obligations.

In a September 2016 memorandum, the POM’s Law Division also recommended the forfeiture of the matured bonds. 

The BOC's Legal Service lodged the complaint with the Office of the Solicitor General on Tuesday, April 25. –