CEBU, Philippines - The branch manager of Banco de Oro - Magallanes in Cebu City has belied the statement of Mayor Tomas Osmeña that the branch is among other branches of BDO that failed to submit papers for their business permit.
In a February 3 letter to Osmeña, branch manager Joseph Lao said they have submitted all necessary documents to City Hall.
"Under LFC (Local Finance Circular) 1-93, as amended by LFC 2-07, the only required submission at the time of the annual payment of the tax due is the Schedule of Annual Income, which the Branch has submitted with its Application on 17 January 2017. Said schedule comprehensively provides the basis of computing taxes, fees, and charges as required in the DTI-DICT-DILG joint memorandum Circular No. 01-2016," the letter reads.
Osmeña has said there are 26 BDO branches in the city, including the branch along Magallanes Street, that have not secured their business permits because of non-submission of additional requirements.
Osmeña also said he will close the branches once he arrives from Japan next week.
According to the City Legal Office, some of the requirements in the renewal and approval of business permits that were not complied with include total deposits for checking; savings and other accounts for 2014 to 2016; branch income statement of 2015 and 2016; branch balance sheet of 2015 and 2016; branch budget 2016 and pro-forma 2017; and interest income; loans, past due items; among others.
All 26 BDO branches in the city have not secured their business permits to operate even as the city issued two show cause notices asking them to explain why the city should not revoke its business permit and why the city should not close the bank.
Last month, Osmeña sued the Magallanes branch for allegedly under-declaring and falsifying its declaration of gross sales of only P400,000 in renewing its business permit with the City Treasurer's Office last year.
In its letters to Osmeña, BDO stands firm that the city has no lawful ground to withhold or revoke its business permit or order its closure.
Lao said BDO-Magallanes declared the "correct gross receipts, which served as basis for its 2016 local business tax and business permit fees."
"To reiterate, gross receipts of a bank are limited to interest, commissions, and discounts. This is because the interest, commissions, and discounts are the bank's compensation for its services. Moreover, the deposits received by a bank from its clients are not gross receipts," his letter reads.
Lao said the interest, commissions, and discounts are not income of the bank, but are loans for which the bank pays interest. He added that this is in contrast to manufacturers, wholesaler, or retailers, which entire gross receipts are considered taxable.
"Given the foregoing, and taking into account all the documents provided by BDO-Magallanes, it is submitted that BDO-Magallanes did not commit any irregularity," he said, adding, that the branch has complied with the requirements under the Local Government Code, its implementing Rules and Regulations, the Cebu City Tax Ordinance, and other applicable rules and/or issuances on the determination of gross receipts.
Osmeña will leave the country tomorrow for an official trip to Japan from February 8 to February 13.
He said only the request of BDO branch depositors can stop his decision to close the branch. (FREEMAN)