City ‘failed’ to collect P484K from supplier

CEBU, Philippines - The Talisay City government was deprived of earning additional revenue because of its failure to deduct value-added tax (VAT) from a supplier, the Commission on Audit noted in a report.

In their annual audit report on Talisay’s transactions in 2014, state auditors discovered that the city failed to deduct P484,660.32 worth of VAT from its payment to a supplier which was paid P11,393,890 for foods, meals and snacks served during various activities of the city.

Audits for calendar years 2013 and 2014 disclosed that the city disbursed the amount of P11,393,890 to Papa Love Lechon Manok. The payments were deducted with expanded withholding taxes worth two percent.

However, the withholding taxes in excess of two percent amounting to P26,269.50 were later refunded to the supplies by the Accounting Section on various dates over requests that it was entitled only to the  two percent withholding tax and exempted from any other taxes.

COA reminded the city government on Section 3 of Revenue Regulations that “any person whose gross sales or services exceed the P1.9 million threshold for the 12-month period should be considered as a VAT-registered person and pay the two percent final tax due.”

COA said there was under-remittance of P484,660.32.

"The under-remittance of P484,660.32 deprives the government of additional income which could have been used to defray other priority projects," the report read.

During an exit conference, Mayor Johnny De los Reyes already promised to COA that they will comply with the recommendation given to them.  (FREEMAN)