MMDA, BIR reach an out-of-court settlement on withholding tax liabilities

April 18, 2010 11:38 am 

MANILA, April 18 — The Metropolitan Manila Development Authority (MMDA) and the Bureau of Internal Revenue (BIR) have reached an out-of-court settlement in connection with the MMDA’s withholding tax liabilities amounting to more than P116 million.

“We were able to reduce it from P116,451,132.98 to P45 million based on our initial talks, and then, finally, we were able to reduce it further to P25 million after a review of our tax obligation,” MMDA chairman Oscar Inocentes said after a brief meeting with BIR officials last Friday.

Inocentes said BIR Commissioner Joel Tan-Torres approved the compromise settlement after a thorough reinvestigation of the assessed tax liability.

The P25 million will be paid in three tranches.

The first payment, an amount of P10 million, was paid for by the MMDA Friday afternoon at the BIR central office in Quezon City, while the remaining balance will be paid in two installments by postdated checks within two months.

A day prior to the forging of compromise agreement, the BIR had agreed to lift its garnishment of MMDA’s bank accounts upon the request of Chairman Inocentes for a “reinvestigation of the assessed tax or a possible abatement of tax liability”.

The BIR served Warrants of Garnishment on several bank accounts of the MMDA last March 24, 2010 for MMDA's failure to settle its withholding tax liabilities for the years 1997, 2000 and 2001 amounting to P116,451,132.98.

Commissioner Tan-Torres said, “We decided to forgive MMDA and to lift the freeze order on their bank accounts since their management has shown good faith and interest in settling their long outstanding tax debt. (PNA) DCT/CLTC

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