THE Bureau of Internal Revenue (BIR) temporarily closed down Café Demitasse, which is located on Torres St., Davao City, on Tuesday, January 30, due to underpaid taxes based on the assessment made by BIR on the first two quarters of 2017.
Revenue District Officer Rodrigo Rivamonte said that for an establishment to be a qualified VAT taxpayer, it should reach the P1,919,500 sales. Those establishments generating sales beyond this specified amount are subject for tax payments within a certain percentage only.
He clarified that for Café Demitasse's case, the establishment is already a qualified VAT taxpayer with a VAT due supposed to be paid amounting to P2.2 million. The cafe already paid a percentage of this amount, which is P43,000, resulting in a basic tax due of about P2.1 million.
Rivamonte said for the coffee shop to reopen, it would need to pay the 110 percent of the basic tax due, which is P2.3 million.
"Yes they have been warned. That is part of the due process. We would be there. We would be asking them what they have to say for these assessments. Their accountants and lawyers are coming over to thresh out the issues and to see that fair treatment is done," he said, adding the coffee shop's closure should have been done last year together with the closure of a big restaurant in Davao City.
He said the total VAT liability of Café Demitasse amounted to P3.5 million for the first two quarters of 2017, but letters of authority will still be issued to the management of the coffee shop for an investigation for the sales performance of the previous years.
BIR Davao Director Nuzar Balatero said the surveillance of the said coffee shop was completed November of last year but closure was only done now, as the order was just signed last week.
"The management will try to cooperate on what should be done...We will abide with the procedures given by the law," said Marco Fuentes, Café Demitasse consultant.
Fuentes added they would make sure to comply with BIR's requirement to be able to reopen as soon as possible.
Balatero said the incident may serve as a warning to taxpayers who have yet to declare their correct sales, thus have not paid the right amount of taxes.
As the current administration's infrastructure industry is leaning toward completion of more projects with the "Build, Build, Build" slogan, Balatero said the revenue they get from Oplan Kandado will help support the projects.
Rivamonte also said they have establishments in the pipeline for closure, such as bars in Davao City. He has yet to disclose the details but said closure may be conducted within the week.