Bureau of Local Government Finance Opinion

January 22, 2010 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred to the City Treasurer, Paraaque City, the within letter dated January 18, 2010 of Ms. JULIET M. UNTALAN, CPA, of No. 0677 Quirino Avenue, Brgy. San Dionisio, Paraaque City, requesting, in behalf of Chemical Commissary Phil., Inc. (CCPI), confirmation of the following opinions, viz. : a. That CCPI, for local taxation purposes, falls under the classification of wholesaler of essential commodities pursuant to Section 143 (c) of R.A. 7160 and shall be taxed at the rate of 50% of 1%; and b. Since no actual examination was made by the deputy examiner authorized by the City Treasurer to do so as evidenced by CCPI records, the assessment issued is null and void and in complete violation of a statutory provision of the Local Government Code of 1991 (LGC), more specifically Section 171 thereof, notwithstanding the fact that the same is a violation of CCPI's constitutional right to due process , which provides that "no person shall be deprived of his property without due process of law". Representations are made that CCPI is principally engaged as a wholesaler of basic food products such as flour, cooking oil, sugar and other dairy products and as such, subject to local business tax at a rate of 50% of 1% pursuant to Section 143 (c) of the LGC. It is alleged that CCPI was subject of an examination of its books of accounts by the Office of the City Treasurer of Paraaque, covering the taxable years 2003 to 2007 or a period of five (5) years, pursuant to Letter of Authority (LOA) CTO 2009 No. 0020 dated March 10, 2009. The alleged examination of books of accounts resulted in an assessment issued on July 9, 2009 for which CCPI opposed for " blatant substantive and procedural violations of the law, R.A. 7160 (The Local Government Code of 1991)." However, CCPI contends that based on their records, no examination whatsoever took place. No certification disclosing the conduct of the examination of books of account was issued nor was there an affixed signature of the deputized examiner certifying that an actual examination and verification was made in compliance with the provision of the LGC particularly Section 171 thereof. In view of the foregoing, her comment and/or appropriate action on the issue raised by CCPI is requested, five (5) days upon receipt hereof. CScaDH Be guided accordingly. (SGD.) MA. PRESENTACION R. MONTESA Executive Director