BIR orders closure of Makati firm

MANILA, Philippines - The Bureau of Internal Revenue (BIR) has ordered the closure of a Makati-based construction firm for failing to remit value added tax derived from its 2008 income.

BIR Deputy Commissioner for Legal and Enforcement Gregorio Cabantac has issued a closure order against Formaply Industries Inc. after a careful investigation made by BIR agents.  The firm, located inside the posh Bel-air Village in Makati and serves  big-ticket clients including five-star hotels in the country, has been issued the closure order last Wednesday.

Cabantac said that the BIR’s investigation revealed that the company’s income tax return (ITR) for 2008 showed an income of P64,602,984.70 yet it did not file any VAT return.

“As early as August 2009, we already called their attention on the discrepancies in their VAT returns. We issued a five-day VAT Compliance Notice for them to reconcile their records. In October, they asked for a 10-day extension which we readily granted. But despite that, they still failed to comply with the law,” Cabantac said.

Cabantac, who was recently named head of the BIR’s “Oplan Kandado Program” by BIR Commissioner Joel Tan-Torres said the closure was the first this year for Oplan Kandado and is also part of the Bureau’s continued and intensified implementation of the Run After Tax Evaders (RATE) Program, which he also heads.

Under the Oplan Kandado Program, business establishments that fail to pay the right taxes are temporarily padlocked by the BIR.

“For so many years, taxpayers only declare what they want to declare. With Oplan Kandado, the BIR now literally padlock business establishments that evade payment of correct taxes,” he said.

According to the BIR, Formaply Industries, Inc. has been in business for more than three decades providing construction services and supplying building materials, with foreign joint-venture subsidiaries in Hong Kong, Singapore and Thailand.

The company’s website lists previous and current clients that include the SM Malls; NAIA Terminals 2 and 3; Davao International Airport; RCBC Tower; Brent School; Sual, Mauban and Malitbog Power Plants; Ateneo University; Marriott Hotel; and Waterfront Hotel, among many others.

The BIR’s implementation of the Oplan Kandado Program and Run After Tax Evaders (RATE) programs are part of the agency’s efforts to raise revenues as it is tasked to collect P830 billion this year.