By Ben Rosario
The Commission on Audit (COA) has flagged business tax collection in San Juan City after discovering the massive under-collection of P736.105 million in taxes allegedly from eight large business taxpayers in the city.
In the 2018 San Juan annual audit, COA also revealed that the city government failed to collect some P155.161 million in real property/special education taxes last year, thus, depriving the city funds to implement much-needed priority projects and activities.
The largest tax delinquencies were recorded from the affluent barangays of San Juan, namely, Greenhills, P68.5 million; Ermitano, P13.07 million; Batis, P9.2 million and Little Baguio, P7.9 million.
State auditors also chided the city government under its former administration for failing or delaying the implementation of P60.138 million in projects.
They said such negligence on the part of city official deprived the public of “immediate benefits/services which could have been derived from the timely implementation” of the planned projects.
“The books of accounts of eight large business taxpayers were not examined in CYs 2017 and 2018 which is not in consonance with Section 171 of RA 7160, thus, resulted in under-collection of business taxes totaling P736.105 million,” the COA revealed.
Audit examiners said it has re-computed the business taxes of top eight business establishments registed in the city based on the highest gross receipts they reported to the Securities and Exchange Commission from the past years 2017 and 2017.
The records of earnings formed the bases of tax dues for 2017 and 2018 which were found to be below by at least P736,104,695.
The COA records revealed that the following may have failed to pay the assessed business taxes: Puregold Price Club Inc., Ortigas and Company Limited Partnership; Motor Image Pilipinas iNc., Motor Image Manila, Inc., Techron Systems Corp., Colinas Verdes Hospital Managers Corporation, Unimart Inc. and Integrated Computer Systems.
COA blamed the City Treasurer’s Department (CTD) for the erroneous collection of taxes.
“The City could have collected more business taxes had the CTD prioritized conducting examination of books of accounts of those large businesses,” the audit body said.
Auditors also reminded the city government that it is allowed by the City of San Juan Revenue Code of 2013 to demand from the business establishments the examination of their respective books of accounts.
“Failure to comply such order shall be subject to the cancellation of its permit to operate and eventual closure without prejudice to criminal prosecution,” they warned.
Reacting to the audit findings, the CTD claimed experiencing difficulty in getting the latest records of audited financial statements, especially the concerned large business taxpayers.
Auditors called on the city government to issue notice of delinquency to formally demand payment of delinquent taxes and penalties due if needed.
In the same audit report, COA noted serious violations in the implementation of the City of San Juan Revenue Code of 2013 in relation to the procedures and remedies in collecting delinquent real property taxes.
According to COA the city government had failed to collect ageing real property and special education taxes that the receivables reached P87.8 million in the past ten years.
“It was noted that out of the P155,160,606 delinquent real property taxes, P68,508,004 or 44.15 percent were from Barangay Greenhills which are mostly private subdivisions, condominiums and commercial establishments/offices,” COA said.
COA reminded the city government that it should implement the provisions of the CSJRC particularly the issuance of notice of delinquency to delinquent taxpayers.
“Its purpose is to inform the concerned taxpayers that failure to pay their obligation will compel the City to avail of the remedies prescribed by law, such as sale at public auction of delinquent properties and/or filing of civil action to enforce collection of delinquent real property taxes,” said COA.