SC asked to nullify Parañaque’s tax compromise deal with Wenceslao firm

Entertainment City in Paranaque City (Google maps)

MANILA — A former barangay official of Parañaque City has asked the Supreme Court to nullify a controversial compromise agreement entered into by Mayor Edwin Olivarez and the City Council with several companies who owed the local government P111 million in real property taxes.

Jonathan Bernardo, former councilman of Barangay San Dionisio, Parañaque, filed last Friday, a 17-page petition for annulment of judgment or compromise agreement contesting the 62.8 percent discount or about P453 million given by the city to the Wenceslao Group of Companies in November 2013 which owed real property taxes for lots in what has been the Entertainment City business park since 1995.

Named respondents were the city government, represented by Olivarez, and the Wenceslao Group of Companies composed of D.M Wenceslao & Associates Inc., Wendel Holdings Co. Inc., Frabricom Manufacturing Corp. and Aseana Holdings Inc.

Bernardo claimed the compromise agreement should be annulled for being contrary to law and public policy and entered into under fraudulent circumstances which have been disadvantageous to the city.

“By their acts in the discharge of their official functions, said public respondents effectively gave the Wenceslao Group unwarranted benefits, advantage and preference over their tax liabilities through manifest partiality, malice and bad faith by precipitately and hastily approving the draft agreement despite the numerous inconsistencies and contravention of existing laws,” the petition read.

The petitioner said that despite Olivarez’s contention that the Supreme Court approved the agreement in 2014, it should be considered “void and should be annulled by reason of intrinsic and extrinsic fraud, for which the Honorable Court was made to believe that the compromise agreement was rendered in accord with law.”

Bernardo, who earlier filed plunder and graft and corruption cases before the Office of the Ombudsman a few weeks ago against Olivarez and city councilors, said Parañaque was deprived of P500 million in tax revenues as a result of the compromise.

The petitioner claimed that Delfin Wenceslao, owner of the group of the companies, was Olivarez’s silver wedding anniversary godfather and political supporter during the past election.

Bernardo said the council resolution set the real estate property tax payment to P6,000 per square meter in the lands covered by the Wenceslao Group when the actual amount should be P12,000 per square meter in the Entertainment City area.

The petitioner said the compromise agreement violated the Real Property Tax Code and the Local Government Code, adding that the city failed to appraise the property on its current and fair market value, and that that the assessment was not equitable and nor based on a uniform classification.

The tax amnesty given to the Wenceslao Group was made through a mere resolution and not an ordinance which the LGC requires for tax-related matters.

Moreover, Bernardo said, the amnesty and compromise agreement were not published and no consultation was held with the public.

“[B]y granting the enormous discount to the Wenceslao Group, through a mere resolution without public consultation in violation of tax law on uniformity and equitability, public respondent brazenly deprived the constituents of Parañaque of the much needed funds necessary for the basic service and unjustly gave the private respondents undue wealth,” the petition stated.  SFM