COWD facing problems on where to put the cash

July 13, 2008

cowd

By Lizanilla J. Amarga

Cagayan de Oro Water District (COWD) is now having problems on where to deposit their daily cash collections that would put it beyond the local Bureau of Internal Revenues’ (BIR-10) reach and its powers to garnish bank deposits for tax debts.

COWD assistant general manager Bienvenido V. Batar, Jr. said the Commission on Audit (COA) requires them to deposit all their daily cash collections at government banks only and that copies of the deposit slip must be attached daily on the water firm’s financial records.

He said they formerly deposit their daily cash collections with the two government banks Land Bank of the Philippines (LandBank) and Development Bank of the Philippines (DBP) until BIR-10 served them the Warrant of Garnishment for their deposits at the two banks.

“LandBank and DBP are the only government banks in the city…if we continue to deposit our cash collections there, it will be garnished by BIR. We might as well close shop,” he told Gold Star Daily.

Batar who is in-charge of COWD’s administrative, finance and commercial services explained that they could not just buy a big vault and keep their daily cash collections at their main office.

He said this will not only violate COA auditing policies but it would mean entailing additional expenses and would place the cash collections in danger of being easily stolen on a daily basis.

This COWD top-ranking officer further elaborated that COA will not allow them to deposit their cash collections in private banks or cooperatives or any financial institution.

And that even if they did, he said word about such deposits daily would easily get around especially during clearing houses and could easily reach BIR-10.

“We know it would seem that we are running away from the BIR but we have no choice. We are willing to pay but for now we do not have the amount that BIR is asking from us,” he said.

Besides, he added that Presidential Decree 198 exempts them “from all forms of taxes” and that the Department of Justice (DOJ) has yet to rule on this matter.

Batar said there are now, however, some “arrangements” with an entity to make sure that their cash collections are safe from BIR-10’s reach but he refused to disclose the details for security purposes.

Still, he admitted that it would have been safer, more convenient, and within-COA auditing rules if BIR-10 would just wait for the DOJ ruling and not immediately proceed against their bank deposits and assets that even include not just COWD’s vital installations but its main office as well.