Cabanatuan City to recheck tax records after businesses understated papers

MANILA, Philippines – The Cabanatuan City government will now reassess all submitted tax records after a random check by the Commission on Audit (COA) found businesses understating their papers.

“Although the total income of the city from business taxes during [the calendar year 2023] had increased… the LGU’s collection from business could still have significantly increased had the gross sales/receipts declared by all the business establishment been properly verified,” the COA report read.

The commission pointed out that the City Treasurer, under the City Revenue Code, has the power to verify if the taxpayer is paying the right amount using books of accounts and other available records. The Cabanatuan City goverment now plans to look into the records filed by businesses at the City Treasurer’s Office and in the Office of the City Accountant.

This comes after local businesses Jassian Enterprises and Dem Hel Computer Trading were found to be declaring “significantly lower” gross receipts compared to what the COA computed based on their transactions with the LGU.

The city government sources its office supplies, rain gear, furniture, eco bags and plastic bags, and other janitorial supplies from Jassian Enterprises, while Dem Hel Computer Trading provides the LGU with IT equipment, laptops, two-way radio, and other office equipment.

Jassian Enterprises declared gross sales worth only P1 million in its business permit application in 2023. However, after a COA review, its computed business deals with the LGU totaled P6.89 million in 2022.

A review of Dem Hel Computer Trading’s transactions with the LGU, meanwhile, showed a total of P2.605 million – far from its declared taxable sales of only P364,685.

State auditors also noted that the two companies also have other deals, aside from its business with the Cabanatuan City LGU. This means that both of the businesses’ gross sales could even be higher than what the COA computed during its review. – Rappler.com