Oslob’s P50 million bank deposits held

CEBU, Philippines — The Oslob municipal government has filed yesterday a protest before the headquarters of the Bureau of Internal Revenue (BIR) after the latter garnished P50 million from its two bank accounts.

BIR said Oslob failed to pay P50 million in income and value-added and withholding taxes for its whale watching ventures in 2012 and 2013.

Last week, the bureau sent warrants of garnishment to two banks to garnish the deposits of the municipal government.

Garnishment is a legal procedure by which a creditor can collect what a debtor owes by reaching the debtor's property when it is in the hands of someone other than the debtor.

Under the National Internal Revenue Code’s civil remedies for collection of taxes, the BIR may garnish the property and bank accounts of delinquent taxpayers.

Lawyer Orvi Ortega, provincial legal officer, contested that government funds are not subject for garnishment.

“Nipasang-at ta sa  level sa commissioners sa BIR og formal protest letter relative sa warrant of garnishment sa mga deposito sa bank sa Oslob (government) in the amount of P50 million,” he told reporters.

Prior to last week’s warrants, BIR also sent a demand letter to Oslob in December 2015, but the latter failed to settle its tax obligation. It was reportedly signed and received in January 2016.

But it remains unknown who received the letter addressed to the mayor.

Neither the LGU nor the BIR can tell if the one who received the letter was authorized personnel.

Ortega said the garnishment order was void as the demand letter was not received by the addressee.

"We consider the FLD (formal letter of demand) as void. Therefore no basis for the issuance of garnishment," he said.

“Garnishment is the offshoot of a formal letter of demand nga wala maaksyoni,” he added.

With the garnishment of municipal funds, Oslob Mayor Jose Tumulak said the town may be affected because LGU is primarily depending on the whale watching revenues.

“Gi-freeze ang both accounts pending resolution,” he said.

The mayor said the funds in the two garnished bank accounts are generally composed of regulatory fees collected from the whale watching operations.

The fee is 30 percent of the actual amount that a tourist pays. Sixty percent is for the boatmen’s association, which manages the site, while the remaining 10 percent is for the host barangay, Tan-awan.

In a month, Tumulak said, Oslob earns about P10 million.

In 2017, the town deposited at least P440 million in the bank based on the 2017 report of the Commission on Audit (COA).

In 2016, Tumulak said the town’s internal revenue allotment is roughly P85 million, which is P5 million lower than the generated income from the whale shark operations amounting to P90 million. — KBQ (FREEMAN)