COWD, BIR-10 tax dispute heats up anew

July 8, 2008

cagayan de oro water district By Lizanilla J. Amarga

The ongoing P341 million tax dispute between two government agencies Cagayan de Oro Water District (COWD) and the regional office of the Bureau of Internal Revenues (BIR-10) is heating up again.

The move came even as a Writ of Preliminary Injunction was issued by a local Regional Trial Court last March 17, 2008 in connection to Civil Case No. 2008-007 and the pending case for arbitration COWD filed with the Department of Justice.

This time BIR-10 just served COWD what it calls “Final Notice Before Seizure” to force it to pay the P120,153,464.29 income/franchise tax the water firm owes the tax agency. It was dated June 24, 2008 and signed by BIR-10 revenue district officer Ester Palala.

A Warrant of Garnishment for P23,616,440.45 was also served against COWD for its Land Bank of the Philippines-Velez Branch bank deposits to be “seized, distrained and garnished” in favor of BIR-10.

“Your failure to honor this warrant shall make you criminally liable under Section 277 of the National Internal Revenue Code as amended,” reads the warrant dated June 26, 2008 and signed by Palala and revenue officer Nestor Celaria.

Attached to the Warrant of Garnishment is the Warrant of Distraint and/or Levy dated June 16, 2008 and served last June 26, 2008.

In a statement, COWD management said they received the warrants noon last Thursday, June 26, 2008 and on that same afternoon their bank accounts were garnished.

“In effect, our capability to operate and implement our projects will be adversely affected. Rest assured however that we will do everything we can to continue providing efficient water service,” the water firm said.

COWD said BIR-10 last April 2007 issued a similar Warrant against their our depository banks to order them “to transfer, surrender, and/or remit” COWD’s bank deposits.

The move was to secure payment of the assessed tax liabilities covering the period 1997-2003 in the amount of P340,948,913.57, inclusive of surcharges and penalties but COWD said “the same was lifted a few weeks later.”

The water firm said they are “in good faith” as it “exerted its best efforts and has fully paid its franchise taxes for 2006, 2007 and the current year while paying partially the franchise taxes for the previous years.”

“And yet, the issuance of the warrants of distraint and/or levy and garnishment were still pursued,” COWD statement’s reads.

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Written by admin · Filed Under Cagayan de Oro