Bukidnon provincial board decides to collect P35 million DMPI tax arrears

MALAYBALAY CITY –  The Bukidnon provincial board passed another resolution Wednesday expressing “the strong sentiment and recommendation” to proceed with the collection of real property tax due to Del Monte Philippines, Inc. for a total of P35 million.

The tax arrears covered five years from 2006 to 2010, which includes the principal basic tax due of P26.35 million and penalties.

In a previous resolution passed on June 29, the provincial board opted to collect only the principal basic tax. But the board included about P8.65 million of penalties in the new resolution.

The Provincial Assessor’s Office had computed in March 2011 the basic tax due, of P26.35 million which should have been due for payment on July 7, 2011.

DMPI requested for a reconsideration or recall of the resolution on July 7 on grounds that it is the DMPI Employees Agrarian Reform Beneficiaries Cooperative (DEARBC), which should be taxed because they are the one who has beneficial use of the real properties subject of the law, among other reasons. DEARBC leased thousands of hectares of lands in Northern Bukidnon for the world-renowned Del Monte pineapple
plantations.

Emmanuel R. Nisperos, DMPI group head for Mindanao operations, said in the letter that, however, DEARBC, being a duly registered cooperative is exempt from paying real property tax under Section 234 of the Local Government Code.

DMPI further asserted that cooperatives with accumulated reserves of not more than P10 million, like DEARBC, are exempt from all national, city, provincial, municipal, or barangay taxes, as provided in Article 61 of the new Cooperative Code of the Philippines.

On July 7, after receiving the DMPI letter for reconsideration, the Provincial Treasurer’s Office issued a 10-working day final notice of delinquency due to expire on July 21. The provincial government shouldhave issued the certificate of distraint on that day, but the DMPI officials’ appearance on July 20 changed it.

Lawyer Ramon Velez, DMPI lawyer and senior manager, said during the July 20 session that DMPI and DEARBC had an agreement that it is DMPI who will pay if the reserves exceed P10 million.

Nisperos, in the letter, said that DMPI noted the excess in the second quarter of 2011, so they have sought for the statement of account so they can settle tax dues.  They stressed that prior to 2011, they owe the provincial government no taxes as DEARBC was tax exempt.

The provincial board invited the DMPI officials on their July 20 regular sessions “afford the company due process”.

Then, board member Nemesio Beltran, author of the two resolutions, recommended garnishment in case of failure of collection.

The P26.35 million principal tax due is only a portion of the P105.23 million real property tax due to the company According to the notice of distraint dated June 7 from the Provincial Treasurer’s Office to DMPI, the provincial government is collecting P105.23 million, the whole real property tax the firm owed to the provincial government from 1992 to 2010. The P26.23 million bill came out when lawyers invoked that a prescription rule of coverage for collection of real property tax delinquency allows only five years.

Jeffrey Sayson, Bukidnon provincial legal counsel, clarified to Bukidnon News Wednesday the province needs to issue another assessment to the amount of P35 million.

The SP members, the resolution stated, likewise found out that the DMPI and the DEARBC (DMPI Employees Agrarian Reform Beneficiaries Cooperative) has an existing contract to the effect that any tax due on registered under R.A. 9520 or the Cooperative Development Act, in no longer tax exempt if its accumulated reserves have already exceeded P10 million. “It must be stressed, however, that DMPI and DEARBC, by fiction of law, are separate and distinct entities, each having its own distinct personality and therefore, the tax liability of DMPI is separate from DEARBC, and vice versa,” the resolution added.

The SP, in the new resolution, said that it was agreed by the members and representatives of the Provincial Government of Bukidnon to make a final assessment on DMPI right after this resolution shall have been passed and adopted based on the amount of P35,043,021.

Based on the audited financial report of DEARBC presented in the session, its accumulated reserves over the last five years did not exceed P10 million. But in the copy used by the Provincial Treasurer’s Office, they obtained accumulated reserves of P11 million in 2009. The versions used by DMPI and DEARBC did not match the financial report used by the PTO. DMPI even cited then that the Department of Finance–Bureau of Local Government Finance affirmed the firm’s position that they are tax exempt. They also cited that the provincial government accepted DMPI’s explanation that it is not liable for real property taxes since the firm was able to prove that DEARBC’s accumulated reserves did not exceed P10 million, as of then Gov. Jose Ma R. Zubiri’s June 28, 2010 letter to the DMPI.

Sayson stressed, however, that the provincial government is asserting collection based on the beneficial use principle. He said Supreme Court decisions invoke the principle of collecting tax from the one who is actually using the land, in this case DMPI, not the DEARBC.

But DMPI lawyer Ramon Velez told the provincial board on July 20 that DEARBC, not DMPI, has the beneficial use in their transaction. (Walter I. Balane)

See this story also in: www.mindanews.com

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