MANILA: A complaint has been initiated by the Bureau of Customs against the builder of Iglesia ni Cristo’s (INC) Philippine Arena, real estate developer New San Jose Builders Company (San Jose) for failing to settle their tax obligations with the agency, Customs said. Also included in complaint are San Jose’s three surety companies.
Customs said its Legal Service transmitted the complaint on April 25 to the Office of the Solicitor General (OSG).
Republic Act No. 9593, or the Tourism Act of 2009, ensures privileges to companies within the Tourism Enterprise Zone. Section 86 of the Act provides that “subject to rules and regulations which properly define capital investments and equipment necessary for various kinds of tourism enterprises, registered enterprises shall be entitled to an exemption of 100% of all taxes and customs duties on importations of capital equipment.”
Customs said San Jose availed itself of the said privilege when it imported construction-related items from 2012 to 2013. It made the importations when it was contracted by Iglesia ni Cristo (INC) to build the Philippine Arena in the City of Malolos, Bulacan province.
The developer was required to post bonds to cover duties and taxes for its shipments since it did not have certificates of exemption from the Department of Finance.
It posted bonds amounting to P947, 292, 025.72 issued by Centennial Guarantee Assurance Corp. (CGAC), Intra Strata Assurance Corp. (ISAC) and Philippine Fire and Marine Insurance Corp. (PFMIC), the three surety companies said in the complaint.
Since the DOF did not grant the exemption, San Jose was required to pay duties and taxes due on their importations. Demand letters were sent by the District Collector of the Port of Manila (POM) to San Jose, CGAC, ISAC and PFMIC in 2015. On July 28, 2015, the District Collector sent a final demand letter to the surety companies.
On December 1, 2015, the acting chief of the POM’s Bonds Division recommended the forfeiture of the bonds for the failure of San Jose and the surety companies to settle their obligations, despite the BOC’s repeated demands.
The POM’s Law Division, likewise, recommended the forfeiture of the matured bonds in a memorandum dated September 20, 2016. It was forwarded by the division’s Officer in Charge to BOC Commissioner Nicanor Faeldon for approval.
Section 1132 of the Customs Modernization and Tariff Act provides civil remedies to the BOC for the collection of duties and taxes. Among these remedies are the distraint of goods and other personal property such as stocks and other securities and the filing of civil or criminal suits against violators.
