BIR issues warrants to 2 Subic firms over taxes

SUBIC BAY FREEPORT , Zambales, Philippines --

Officials of the Bureau of Internal Revenue have served warrants of garnishment to two investors here for unpaid excise and value added taxes.

The warrants, signed by Revenue Commissioner Guillermo Parayno, were served at the depository banks of Subic-based companies Asia International Auctioneers Inc. (AIAI) and Subic Bay Motors Corp. (SBMC). In a statement, the BIR said the move was done to "satisfy the claim of the government in the form of unpaid taxes."

However, investors here, particularly those engaged in vehicle importation and the auction business, condemned the BIR operation, calling it as an "arrogant display of power." In a separate statement, lawyer Estanislao Cesa Jr., counsel of AIAI and SBMC, said the investors were frightened by the BIR operation. Cesa said Parayno was imposing excise and value added taxes to freeport investors despite the tax incentives provided by Republic Act 7227 or the bases conversion law.

The law, he said, states that the allowable taxes to be collected from investors should only be 5 percent of gross income. The tax incentive was imposed to lure foreign and local investors to put up businesses in this premier freeport zone, he said. "The law clearly provides tax incentives which are in lieu of all taxes," Cesa said in the statement. He said a case is still pending before the Supreme Court and the Court of Tax Appeals to resolve the conflict with the BIR and other revenue collection agencies.

"The BIR should have waited for the decision of these courts before issuing the warrant of garnishment. (This) has virtually (stopped) the operations of the legitimate investors in the freeport zone," he said.

Inquirer News Service
Editor's Note: Published on the Philippine Daily Inquirer
http://news.inq7.net/regions/index.php?index=1&story_id=7011