Vol. XXI, No. 167 [ Business World Online ]
Thursday, March 27, 2008 | MANILA, PHILIPPINES
THE STATE agency in charge of disposing of military lands stands to pay up to P200 million in taxes in connection with an Ayala Land, Inc. project at Fort Bonifacio if the Bureau of Internal Revenue (BIR) refuses to honor its tax exemption.
The Bases Conversion Development Authority could end up paying
P175 million in taxes based on P3.5 billion worth of units
at the Serendra in Fort Bonifacio unless the tax bureau issues
a ruling confirming the state agency’s tax exemption. — BW File Photo
In fact, the Bases Conversion Development Authority (BCDA) was forced to pay P100 million in creditable withholding taxes last month — under protest — just so the titles of condominium units at the posh Serendra project could be transferred to buyers.
Last July, the BCDA asked tax officials not to collect the tax, but has written the BIR chief again because there has been no response to a request for a ruling.
The BCDA says its share of earnings from Serendra, a joint venture with Ayala Land and unit Community Innovations, Inc., is exempt from taxes under the Bases Conversion and Development Act, which says: " proceeds of the sale of portions of Fort Bonifacio shall not be diminished and therefore exempt from all forms of taxes and fees."
BCDA Vice-President Aileen R. Zosa said her agency has again sought clarification from the BIR on whether it is exempt from all taxes and fees, including the creditable withholding tax (CWT) as stipulated under the law.
"We have requested confirmation of our position that any proceeds to be collected by BCDA on the joint development agreement with Ayala Land, Inc. is exempt from all taxes and fees, including CWT," the agency said.
Ms. Zosa said the BCDA had submitted three written follow-ups on Oct. 1 and Nov. 20 last year and on March 13.
The agency, however, has started paying almost P100 million to cover the CWT of fully paid Serendra units and to transfer certificates of title to buyers. "We told BIR that we are paying them under protest. We are still waiting for the ruling."
BIR officials were not available for comment as of press time.
The BCDA said: "The sales proceeds and lease rentals from BCDA’s allocated units in Serendra are proceeds from the sale and/or disposition of portions of Fort Bonifacio. BCDA is the disposing agent of the government. Even our proceeds go to the government, not to the corporation."
Ms. Zosa said the BCDA could end up paying about P175 million in taxes based on P3.5 billion worth of units but the figure could still go up. "Not everything is sold yet the property is still being developed."
Serendra sits on a 12-hectare land at the Bonifacio Global City in Taguig. The mixed-use development consists of 60% open space and 40% "buildable" area.
Ayala Land spokesman Alfonso D. Reyes declined to comment on the tax issue.
Company data showed that out of 737 units in the One Serendra project, a total of 700 or 95% have been taken up while 1,140 units out of 1,200 in Two Serendra have been reserved.
The selling price for high-end units has reached P124,000 per square meter. — Bernardette S. Sto. Domingo
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