Ex-Manila Mayor Lim faces graft for unpaid taxes during term

A motorcycle enthusiast has filed a complaint against former Manila Mayor Alfredo Lim for incurring half a billion in tax liabilities during his term, saying these deprived the city of safer and better roads.

In his complaint, Reynante Protacio Sacaguing with lawyer Reynaldo Libatique filed a complaint for violation of the antigraft law against Lim, former city treasurer Marissa de Guzman, and former city accountant Maria Lourdes Manlulu.

Sacaguing told the Office of the Ombudsman that the said officials “should be held liable for gross misconduct and gross neglect of duty for their failure to act promptly on the demands made by the BIR within the required period.”

He also said the respondents violated Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act and Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees.

According to the complainant, the city government incurred over P572 million tax deficiency for the year 2007.

Sacaguing, a resident of Sta. Mesa, Manila, said the tax deficiencies and huge financial liabilities incurred by the city had resulted in a breakdown in the delivery of public services, which included keeping the roads safe for motorists.

“The big amount of monies worth millions of pesos to be paid for such tax deficiencies should have been devoted to the healthcare and safety of the urban poor residents of Manila, devoted to public school facilities, or even to charities. Had these respondents done their sworn duties, the City of Manila could have been freed from such tax liabilities,” Sacaguing said in the complaint.

In his complaint-affidavit, Sacaguing accused Lim and his co-respondents of ignoring repeated demands and final notices issued by the Bureau of Internal Revenue (BIR), prompting the latter to turn down any offer for compromise.

Respondents neglected or refused “after due demand or request, without sufficient justification, to act within a reasonable time on any matter pending before him for the purpose of obtaining, directly or indirectly, from any person interested in the matter some pecuniary or material benefit or advantage, or for the purpose of favoring their own interest or giving undue advantage in favor of or discriminating against any other interested party; and/or directly or indirectly having financing or pecuniary interest in any business, contract or transaction in connection with which they intervene or take part in their official capacity.”

“Thus from the foregoing facts and circumstances, the clear and adamant inaction of respondents made the coffers of the City of Manila in full financial setback,” the complaint said.

Based on the complaint, as per BIR audit for the cumulative year 2007, the City of Manila was assessed the amount of P569,551,178.60 for deficiency on tax payments specifically VAT, EWT, withholding compensation, government money payments VAT and withholding tax on government money payments and franchise taxes.

The notice of assessment was received on Dec. 21, 2010, by Lim’s office and indicated that the amount was payable within 15 days from receipt.

On Oct. 26, 2011, the said notice became final without the respondents doing any action on the matter, thus a final notice before seizure was received by the Office of the City Accountant (OCAT).

On Nov. 5, 2011, Lim served a letter of compromise to the BIR commissioner offering a minimum compromise tax rate of 10 percent of the assessed basic tax in the amount of P34,759,567.17 payable in six monthly installments of P5,793,262.70.

The BIR, in reply, considered the current financial status of the city and reduced its tax deficiency to P504,186,349.29.

The OCAT received another collection letter dated April 24, 2012, for an amount due to the BIR of P238,058,693 as disclosed in the 2010 annual audit report of the financial statements of Manila.

Lim sent a reply dated April 27, 2012, and enclosed two partial payments for the balances incurred in the years 2007 and 2008 in the amount of P5,838,419.71 and P19,202,849.10, respectively.

But according to the complainant, only the amounts of P5,838,419.71 and P10,680,787.79 were paid to the BIR on April 30, 2012.

On Sept. 25, 2012, Lim received a letter from the BIR commissioner informing him of the city’s existing P572 million tax deficiency.

Likewise, the BIR commissioner reiterated that the offer for compromise by respondent was denied because the assessments made through post reporting notice, preliminary assessment notice, formal letter of demand and assessment notices had already become final and executory. RC