BIR runs after accounts of Makati City

PHILIPPINE NEWS SERVICE — THE Bureau of Internal Revenue yesterday froze the financial assets of the Makati city government to recover P1.1 billion in taxes withheld from at least 8,000 city hall employees since 1999, and which the national government says it has not received.

Warrants of garnishment were sent to all banks in Makati ordering them to withhold payment to the city government in favor of the bureau to cover the tax liabilities.

“We really have no choice but to go after Makati City properties if Mayor [Jejomar] Binay fails to settle the amount,” said Revenue District Officer Roberto Baquiran.

“As revenue collectors, we are duty-bound to pursue tax evaders; otherwise, we suffer prosecution and expulsion from public service for failing to do our duties,” Baquiran said in a press conference.

He dismissed allegations that politics was behind the latest action, saying the bureau had issued a demand letter to Binay as early as March 9 ordering the city government to remit the taxes that were withheld from 1999 to 2002.

“This is not political. I’m not aspiring after any public office, and I don’t owe my position to anybody,” Baquiran said.

He said the garnishment would not disrupt the delivery of basic services to the city because P1.1 billion was a small portion of Makati’s huge revenues, but he warned the liability would grow if it was not paid immediately.

The banks that received the bureau’s warrants were the Philippine National Bank, the Land Bank of the Philippines, Metrobank and Philtrust.

Baquiran warned that Binay and the city treasurer could face imprisonment for the unpaid taxes, and denied the mayor’s claim that the obligations had been settled.

Last June, Binay offered to settle its P1.1 billion tax due through a P200-million settlement arranged with Commissioner Jose Buñag.

But in a Nov. 22, 2006 letter to Binay, the bureau said the compromise was rejected, and that the P200 million advanced was considered “a credit against the entire tax liability” of P1.1 billion, Baquiran said.

Binay’s payment of the P200 million was clear evidence that he recognized the city government’s tax obligations, he said.

The bureau had earlier given Binay until March 31 to settle the city’s obligations, but Binay did not do so, Baquiran said.

Binay, a leader of the opposition, accused the Palace of being behind the bureau’s action against him.

“We have been informed that Malacañang has been pressuring BIR officials. This is very unfortunate. We have dealt with the BIR in good faith and had expected a resolution of this issue,” the mayor said.

“Our records would show that Makati has no obligations with the national government, but as expected, the Arroyo administration is misusing the powers of government for their political ends,” Binay said. “We will definitely go to court.”