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Wednesday, March 08, 2006
City exec orders inquiry on fertilizer firms
By Danilo V. Adorador III
City Treasurer Lino Daral ordered the scrutiny of all fertilizer firms' book of accounts, in a move to uncover the alleged massive under-declaration of profits that may have defrauded the local government of millions worth of tax revenues.
A parallel undertaking rolled out Tuesday at the City Council as the ad hoc committee tasked to conduct inquiry into the matter said they have validated the existence of the alleged tax-evasion schemes.
Some of these schemes involve the non-compliance or non-renewal of business permit, and the under-declaration of annual gross income, said Councilor Maryanne Enteria, the ad hoc committee chairman.
Non-compliance or non-renewal of business permit makes these companies invisible to the eye of the local tax collectors, Enteria said.
She added that under-declaration is rampant, which is obviously to avoid paying the correct taxes.
Under-declaration of annual profits can easily be detected through records of product shipments, she said.
Enteria earlier presented records of port shipments from the Bureau Of Customs and the Philippine Ports Authority when she reported to the City Council last week the presence of three fertilizer companies operating without business permits.
In that report, she also cited one fertilizer importer whose declared gross annual income allegedly pale in comparison with the expected sales of the imported goods.
Mayor Vicente Emano early this week said he was seriously considering the closure of all these four companies, which had been operating in the city since 2002.
Sun.Star Cagayan de Oro did not find the names of the four companies in the local business directory.
Enteria explained that this might have been due to being only dummies of larger corporations -- a matter that will be determined in the course of the expected month-long investigation.
Daral said he has already assigned six personnel to look into the financial documents of all companies engaged in fertilizer importation, now numbering about 20.
He was unable to divulge their names pending the inspection.
"We will examine their invoices in the past years and their Custom duties and all records at the Bureau of Internal Revenue pertaining to their business transactions," said Daral.
Enteria said they would invite officials from the Department of Agriculture, ports authority, and customs next week to further shed light on all transactions entered into by said companies from 1998 to present.
She puts the lost taxes due to the City Government at around P50 million for the four companies alone since 2002.
Fertilizer importers would face the investigating committee two weeks from now.
(March 8, 2006 issue)
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