No deal yet with Del Monte on unpaid taxes

MALAYBALAY CITY (MindaNews/09 July)  – The provincial government of Bukidnon had neither signed nor authorized a compromise deal with Del Monte Philippines Inc. over the firm’s real property tax arrears, Jeffrey Sayson, provincial legal officer, recently said.
Sayson, who was also provincial administrator until July 1, said any negotiation has to go through the provincial board, which passed on Wednesday  Resolution No. 2011-048 strongly recommending the implementation of the collection of the whole real property tax from 2006 to 2010 as assessed in March this year.

Former Malaybalay City councilor Provo Antipasado assumed on July 1 as the Capitol’s new administrator.

Lawyer Marco Parpan, DMPI plantation labor relations and legal services manager told MindaNews on July 9 the company had submitted a letter to the provincial board on July 8 “asking for reconsideration or recall of the demand letter.”

Parpan declined to answer when asked for details of the firm’s position, saying it was “articulated in the letter”.

According to the notice of distraint dated June 7 from the Provincial Treasurer’s Office to DMPI, the provincial government is collecting P105.23 million, the whole real property tax the firm owed to the provincial government from 1992 to 2010.


MindaNews earlier reported that the firm owed P26 million. But Sayson clarified this is the amount of the tax due for the last five years, in case the firm would seek a compromise.

The provincial board resolution recommended “appropriate remedies” for its collection if the same was not paid voluntarily on July 7. Board member Nemesio Beltran Jr. suggested garnishment against the firm.

The Provincial Treasurer’s Office notice of distraint to DMPI expired on July 7.

Sayson said DMPI has the option to file a temporary restraining order in court or submit a compromise proposal to the provincial government.

As of July 1, Sayson said, no such proposal was sent. MindaNews tried to reach DMPI for comment but failed.

In a letter to the provincial government dated June 23, 2010, the firm said they are exempt from paying the real property taxes as they don’t own the lands they are using. They said they leased it from the Del Monte Employees Agrarian Reform Beneficiaries Cooperative (DEARBC), who the provincial government should tax as the owner.

But they cited that the cooperative is also exempted from paying taxes on the real property, assessed as of June 2010 at P95.94 million.

“Under the Local Government Code and the new Cooperative Code of 2008, real properties owned by duly registered cooperatives such as DEARBC, are exempt from real property taxes,” DMPI said in the two-page letter signed by Luis F. Alejandro, general manager and chief operations officer.

DMPI said the Cooperative Code exempts cooperatives with accumulated reserves and undivided net savings of not more than P10 million from “all national, city, provincial, municipal, or barangay taxes of whatever name or nature.”

The firm showed that DEARBC only has P2.81-million accumulated reserve fund.

DMPI even cited then that the Department of Finance–Bureau of Local Government Finance affirmed the firm’s position that they are tax exempt.

Sayson stressed, however, that the provincial government is asserting collection based on the beneficial use principle.

He said Supreme Court decisions invoke the principle of collecting tax from the one who is actually using the land, in this case DMPI, not the DEARBC.

He, however, said that the province was not keen on going to court that is why the computation of P26 million emerged as the “compromise tax the provincial government can accept based on the law”.

But Sayson said DMPI must first admit its tax liability before negotiations may start. He said the firm might still cling on to the position that it is tax exempt.

Roger Guillermo, of the Provincial Treasurer’s Office, was summoned to the Sangguniang Panlalawigan last week to clarify on the firm’s tax arrears from 2006 to 2010 when Vice Gov. Jose Ma. R. Zubiri Jr. told the provincial board of an alleged negotiation with the Capitol.

Guillermo said the treasurer’s office had already issued a notice of distraint or a levy on tax debt covering personal and movable assets of the company.

Zubiri, citing a text message from Gov. Alex Calingasan, said the firm allegedly negotiated to pay only a two-year tax of P8 million prompting him to ask the other board members of their position.

Board member Jay Albarece said that Guillermo admitted that the tax arrears were under negotiation.

Zubiri said on June 29 that the provincial government may waive interests and penalties but not the net of a tax due. (Walter I.Balane/MindaNews).