THE City Government of Makati appealed to the Bureau of Internal Revenue (BIR) to honor its proposition of paying its more than P1 billion tax due in staggered basis.

Kenneth Dasal, legal officer of Makati City, urged new BIR Chief Kim Henares to honor an earlier agreement with her predecessor regarding the mode of payment on its tax obligations.

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“We had reached an agreement with the former BIR chief, and we are hopeful that Commissioner Henares will uphold the agreement,” Dasal reiterated.

Under the terms, Makati will pay a total of P400 million due. The P200 million must be paid “as soon as possible" while the P200 million balance will be paid in 2011 and 2012 at P100 million a year, respectively.

A payment form in the amount of P200 million, added Dasal, had been signed by the former BIR chief, along with Makati City Administrator Marjorie De Veyra and Makati Revenue District Officer Teodoro Galicia.

He said Makati Mayor Jejomar Erwin “Junjun” Binay Jr. wrote Henares last July 19 asking for a confirmation of the agreement.

In the letter, Binay said the City Government had proposed to settle all claims of the BIR covered by the case pending before the Court of Tax Appeals (CTA).

In December 16, 2009, the CTA ordered the City Government to pay P1 billion in unpaid taxes covering 1999 to 2001, and an additional P217.8 million for 2002 to 2004.

Last April, the BIR had tried to garnish the accounts of the city government in the amount of P1.146 billion, but the Land Bank of the Philippines (LBP) rejected the warrant of garnishment.

Then Makati Mayor Jejomar Binay protested the BIR move as a sign of bad faith, since the agency did not even furnish the city government with a copy of the warrant.

The City Government maintained that is has been remitting national taxes to the BIR, and contested the agency’s basis for its assessment. (AH/Sunnex)