BIR, MMDA reach out-of-court settlement on tax row

After a brief word war on the matter, the Metropolitan Manila Development Authority and the Bureau of Internal Revenue (BIR) reached an out-of-court settlement over the MMDA’s withholding tax liabilities involving some P116 million. MMDA Chairman Oscar Inocentes said he and BIR Commissioner Joel Tan-Torres approved the compromise settlement after a thorough reinvestigation of the assessed tax liability. “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," Inocentes said in an article on the MMDA website. He said the P25 million will be paid in three installments. The MMDA made the first payment of P10 million last Friday at the BIR central office in Quezon City. It will pay the balance in two installments via postdated checks within two months. Before the compromise agreement was forged last Friday, the BIR agreed to lift its garnishment of MMDA’s bank accounts upon the request of 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, for MMDA's failure to settle its withholding tax liabilities for 1997, 2000 and 2001 amounting to P 116,451,132.98. “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," Tan-Torres said. — LBG, GMANews.TV