VP Binay & Makati’s unremitted taxes
The “heat is on”, so to speak, as presidential wannabes geared themselves up for the “big fight” on May, 2016. A “big fight” that shall reward the winner a monthly salary of P120,000 or P8,640,000 for the entire 6-year term. Absolutely, a meager pay for a humongous responsibility. Paltry, the pay maybe, candidates will surely spend billions for the chance to grab it. Apart from spending billions, they shall try to project themselves as truly deserving by giving us (the voters) lengthy enumerations of their so called track record.
As early as now, presidential hopefuls Mar Roxas and Jejomar Binay, though haven’t really filed their candidacies with the COMELEC, are officially in the race. Propelled by the endorsement of President Noynoy Aquino, Sec. Roxas promises to continue the “Daang Matuwid” initiatives of the present administration. On the other hand, VP Jejomar Binay vowed to make the cities and municipalities in the country like Makati. A claim that is basically anchored on that questionable thought that he made Makati what it is today, not the Ayalas.
As far as Sec. Roxas in concerned, he is endorsed by PNoy, thus, logically, he must promise to continue the latter’s mode of governance. That’s a no-brainer. On the other hand, VP Binay’s claim of making all municipalities and cities in the country like Makati is nothing but empty promises. We all know that it cannot be done. That this is simply baloney. Such claim is simply made to impress upon us that he is an expert in local governance because he is progressive Makati’s CEO for a number of years. That, therefore, he is an authority in this aspect of governance and can easily guide LGU executives in transforming their respective localities if elected.
Granting, for the sake of argument, that he is true as self-advertised, then, it is paramount to delve deeper into some inundating facts and see if his claims are true. For one, he claimed to be responsible in making Makati what it is today. The fact is, even in Mayor Yabut’s time, Makati was already the premier municipality in the country. Thank not Mayor Yabut, the Ayalas did it. That’s pretty obvious.
On the other hand, in terms of local government unit’s fiscal management (which VP Binay claimed he is also good at), he was also a big disappointment. Let’s set aside the overpricing claims of Senators Cayetano and Trillanes for the time being. It is well covered by media and every Juan now knows what it is all about. What is not known to many was then Mayor Jejomar Binay’s failure to remit withheld taxes from Makati City employees and suppliers despite repeated demands from the Bureau of Internal Revenue (BIR).
To recall, several years ago, the BIR ordered Makati Mayor Jejomar Binay “to settle the city government’s P1.1 billion unpaid withholding taxes from 1999 to 2002, or it will be forced to go after Binay’s properties”. In its demand letter dated March 9, 2007 to then Mayor Jejomar Binay, the city treasurer and the city accountant, the BIR chief for Withholding Tax Division, Marivic Galban asked the city government “to pay a total of P1,150,331,321.81 representing the unremitted withholding taxes from 1999 to 2002.”
Then Mayor Jejomar Binay never heeded the demand. The case was then elevated to the Court of Tax Appeals (CTA). In a landmark decision, the CTA ordered the City Government of Makati on December 16, 2009 to pay the BIR P1.2 Billion in deficiency taxes. The CTA ordered them to pay the BIR the amount of PhP1,046,833,846.08 and PhP217,807,339.66, representing its deficiency taxes for taxable years 1999 to 2001, and taxable years 2002 to 2004, respectively. These amounts represent deficiency Withholding Taxes on Compensation, Expanded Withholding Tax, Value-Added Tax and Withholding Tax on VAT for the years 1999 to 2004.
Forced to pay, then Mayor Jejomar Binay declared, “this is political harassment”. In heaven’s name, this is not political harassment. Notably, LGUs are exempt from internal revenue taxes. As such tax-exempt entity, these assessments represent largely withheld income taxes from employees and withheld income taxes and VAT from suppliers of goods and services that were not remitted. As deputized collection agents, they are supposed to remit these collected taxes. Despite these facts, then Mayor Jejomar Binay was so adamant in not remitting it. Incidentally, this could be true too in other LGUs.
Apparently, therefore, if VP Binay becomes president (hope not), he does not have the moral ascendancy to tell erring LGU executives to follow the basic law on taxation because he himself has vehemently violated it.
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