Bureau of Local Government Finance Opinion

August 18, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the Regional Director for Local Government Finance, Region IV, People's Mansion Compound, Batangas City, the herein preceding Indorsement requesting opinion relative to the outstanding obligation of San Miguel Corporation (SMC) due the City of Cavite. It appears that under a letter dated August 30, 1995, SMC informed that it will cease operations in the city on September 1, 1995. However, records of the Office of the City Treasurer of Cavite show that SMC paid its business taxes for the 1st, 2nd and 3rd quarter of 1995 only, leaving a balance of P204,838.23, excluding penalties, for the 4th quarter of the same year. It also appears that on the basis of gross receipts realized from January 1 to August 1995, SMC is liable to pay the amount of P511,905.39, also excluding penalties. Section 9.04(g)(par. 2) of Ordinance No. 2571 of Cavite City provides as follows: "Sec. 9.04. Submission of Sworn Statement . . . . "If the business or undertaking is terminated, the official receipt issued for the payment of business tax therefor shall be surrendered to the City Treasurer and a sworn statement of the gross sales and/or receipts for the current year shall be submitted to the City Treasurer within thirty (30) days following the closure. Any tax due shall first be paid before any business or undertaking is finally terminated ." (Emphasis supplied) On the basis thereof, that Office is of the opinion that SMC should pay the taxes due for the 4th quarter of CY 1995 due on gross sales realized in CY 1994, as well as the tax due on gross sales from January to August 1995, as shown below: Amount of Tax Due, 4th quarter, CY 1995 P204,836.23 Amount of Tax Due, Jan. to Aug., 1995 511,905.39 Total Amount Due P716,741.62 ========= Moreover, Section 143 of the Local Government Code of 1991 (LGC), provides that the business tax due on gross sales for the preceding year shall be computed and collected within the first twenty (20) days of January of the following year. The tax may be paid in full or if by installment, in four equal sums within the first twenty (20) days of each quarter of the year. HSTCcD On the basis of the above representations and consistent with the actions taken on previous similar cases, this Bureau concurs in the views expressed by the City Treasurer of Cavite as regards the tax liabilities of said corporation. Be guided accordingly. (SGD.) ANGELINA M. MAGSINO (Deputy Executive Director) Officer-in-Charge