Monday, August 25, 2008 [ manilatimes.net ]
GENERAL SANTOS CITY: The City Water District deposited P1.7 million worth of bonds to thße court for a writ of preliminary injunction after local taxmen issued the levy and garnishment order of all its bank deposits because of unpaid tax accounts amounting to P 11.2 million.
The garnishment order was held after Regional Trial Court (RTC) Judge Oscar P. Noel released an order for preliminary injunction against the Bureau of Internal Revenue (BIR) here, a source said Friday.
Francisco Alolod, the water district’s commercial division manager, said BIR served the warrant of distrait and levy against General Santos Water District (GSWD) properties on August 8 to enforce the collection of their alleged delinquent taxes.
“We have been furnishing the tax office with our letter of protest even during the time of former BIR commissioner Guillermo Parayno but we have not yet received any resolution stating whether we are free of tax or not,” said Alolod.
He cited Section 46 of Presidential Decree 198, which states that “a district shall be exempted from paying income taxes, payment of all national government, local government and municipal taxes fees, including any franchise, filing, recordation, license or permit fees or taxes and any fees, charges or costs involved in any party.”
Alolod said the GSWD is just waiting for the court to decide. “We are ready to settle our taxes if ever the court would direct us to do so, but [in the] meantime, we have no other choice but [to] stick on our own policy and principles,” he said.
Alolod said the Philippine Association of Water Districts advised all water district facilities in the country not to pay tax arrears to the BIR for it would adversely affect other BIR-WD cases in the cities of Davao, Cebu and Cagayan De Oro. He revealed President Arroyo’s intervention was already sought to resolve the tax row between the two government entities.
Noel Gonzales, the local BIR district officer, said BIR and GSWD officials were at loggerheads following the execution of the levy and garnishment order after the 20-day temporary restraining order issued by the Court expired last week.
“We will never stop. This will serve as example to taxpayers who have received our assessments but continue to ignore us,” Gonzales said.
In a telephone interview, the lawyer Eric Diesto, chief of BIR’s regional legal division, said they were willing to elevate the case to the higher court if ever the RTC would deny the prayer for preliminary injunction.
“If denied, we will file the motion for reconsideration. And if it will be still denied, we will elevate the case before the Court of Appeals,” said Diesto.
He cited Section 218 of the National Internal Revenue Code, which states, “no court shall have the authority to grant an injunction to restrain the collection of any national revenue tax, fee or charges.”
Earlier, GSWD officials stressed that BIR could not levy on their properties by reasons that these properties are of public dominion. Diesto reiterated it was disagreeable since it was not proven.
“To be considered part of public dominion, the properties must be owned by the state or the republic in the exercise of its governmental functions,” Diesto said.
He said under the provisions of the existing special general laws, all corporations, agencies, or instrumentalities owned or controlled by the government, except the Government Security Insurance System, the Social Security System, the Philippine Heart Insurance Corporation, the Philippine Amusement and Gaming Corporation, were mandated to pay such rate of tax upon their taxable income.--Isagani Palma
