San Juan City fails to impose P736M in taxes on businesses

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San Juan City fails to impose P736M in taxes on businesses
The Commission on Audit says the city treasurer's office under-collects from 8 big corporate taxpayers

MANILA, Philippines – The city government of San Juan, under former mayor Guia Gomez, wasn’t able to collect P736.105 million in taxes from 8 traders in 2016 and 2017.  

The failure of the City Treasury Department (CTD) to examine the books of accounts of these corporate taxpayers and to act on the under-collection is in violation of Section 171 of the Local Government Code. 

“Republic Act 7160…requires examination of books of accounts and pertinent records of businessmen by the Local Treasurer within the jurisdiction of the City to ascertain, assess, and collect the correct amount of taxes, fee or charge,” the state auditors said in their report made available this week.  

The Commission on Audit (COA) did its own computation using the highest gross receipts reported by these establishments to the Securities and Exchange Commission (SEC) for 2016 and 2017. It was discovered that these 8 were not levied the proper taxes:

  • Puregold Price Club Incorporated – P625.255 million
  • Ortigas and Company Limited Partnership – P59.59 million
  • Motor Image Pilipinas Incorporated – P21.763 million
  • Motor Image Manila Incorporated – P20.86 million
  • Techtron Systems Corporation – P7.398 million
  • Colinas Verdes Hospital Managers Corporation – P6.135 million
  • Integrated Computer Systems Incorporated – P4.494 million
  • Unimart Incorporated – P403,315

Computation of tax dues for the current year are based on receipts from the previous year.

The audit report said, “The City could have collected more business taxes had the CTD prioritized conducting examination of books of accounts of those large businesses.”

The San Juan treasurer’s office acknowledged that it examined the books of accounts only of mid-range business taxpayers because it had a hard time accessing the financial statements of large business taxpayers. 

While these companies’ records were accessible through the SEC’s I-view, the city treasurer found limited documents.

State auditors recommended that the city treasurer gets assistance from the Bureau of Internal Revenue in getting additional financial information on these companies so proper taxes are levied and collected. – 

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