THE turnover of what was supposed to be Filinvest Land Inc.’s (FLI) final payment to the Cebu City Government did not push through yesterday, while officials tried to sort out issues regarding their records and withholding tax.
City Treasurer Diwa Cuevas confirmed that the City did not receive the check from FLI amounting to P134 million.
“We didn’t receive (the check) because we wanted to meet first. Their (FLI) accountant wanted to put in the OR (official receipt) that it’s the last payment but per our records, there’s something hanging,” Cuevas said.
According to records of the City Treasurer’s Office, had they received the final check from FLI, there would still be a balance of P187,006.73.
This is why the City is hesitant to sign the OR indicating final payment.
In an interview with Sun.Star Cebu, Cuevas admitted that the discrepancy may be a product of a recording error on the part of the City Government.
She explained that payments from FLI were rounded off, which may be where the error occurred.
The subject of the last amortization is the 10.6-hectare property in the South Road Properties (SRP) sold by the City to FLI at P15,000 per square meter or close to P1.6 billion.
FLI paid a down payment of P348 million in 2009.
The balance was payable within six years, ending this year.
The payments made between 2010 and last year were P342 million, P255.5 million, P245.2 million, P234.8 million and P224.4 million.
The amounts were perfectly rounded off when there should be loose change, based on the treasurer’s records, because of the five-percent annual interest, computed on a diminishing balance.
Cuevas will meet with FLI’s accountant today to iron out the balance of P187,000.
“We are going to check this. We think that there was a problem when the amount was rounded off,” said Cuevas.
Yesterday was the second time the turnover of the check did not push through. There was a scheduled turnover last Monday but this was postponed as well.
Based on the records, FLI should pay the City P141.8 million. But the former issued a check for P134 million, withholding two percent of the amount as withholding tax, which will be remitted to the Bureau of Internal Revenue.
The City did not receive the check pending a clarification from the BIR.
Cuevas said she understood the stand of FLI.
“Dili man sad pwede nga dili mo-deduct ang FLI (FLI cannot avoid making the deduction) because they are the withholding agent-corporation that will be subjected to penalties for not remitting (tax),” said Cuevas.
A representative of FLI declined to issue an official statement as of yesterday.
Cuevas said there was a suggestion from BIR to accept the check but indicate that the tax issue is “under protest.”
“On our part, we believe that we shouldn’t be subjected to withholding tax as a government entity,” Cuevas added.