BIR shuts down 33 branches of LBC subsidiary due to unpaid taxes

A total of 33 branches being operated by a subsidiary of popular cargo and courier services provider LBC Express Inc. were padlocked by the Bureau of Internal Revenue (BIR) last Thursday due to unpaid taxes during the last three years amounting P145.7 million.

In an e-mail to the Inquirer on Saturday, the country’s biggest tax-collection agency disclosed that it shuttered LBC Express-SMM Inc., or formerly known as Bag Acceptance Corp., whose main office is located along Alabang-Zapote Road in Muntinlupa City.

This LBC subsidiary’s branches in southern Metro Manila were also closed down, including eight in Las Piñas City, eight in Taguig City, six in Muntinlupa City, six in Parañaque City, four in Pasay City, and one in Makati City.

The BIR said LBC Express-SMM “modified point-of-sales (POS) machines without prior notification,” hence violated provisions of the Tax Code or the National Internal Revenue Code of 1997, as amended.

Post-evaluation and verification of the company’s 75 POS units showed that it altered, integrated or modified the machines even without approval of the BIR’s respective revenue district offices overseeing the branches’ locations.

Also, the BIR discovered that LBC Express-SMM underdeclared its taxable sales by P105 million in 2013, P27.5 million in 2014, and P13.2 million in January 2015.

The BIR urged the firm to pay its tax liabilities and file value-added tax (VAT) returns with correct taxable receipts.

However, LBC Express-SMM did not comply with the 48-hour as well as five-day VAT compliance notices from the BIR, hence its branches were shut down through the closure orders issued by Deputy Commissioner Nelson M. Aspe.

“Section 115 of the Tax Code, as implemented through Revenue Memorandum Order No. 03-2009, authorizes the BIR to suspend or close the business operations of a taxpayer for a period of not less than five days for failure to: register; issue VAT official receipts or sales invoices; file correct VAT returns; or pay the correct VAT,” the BIR noted.

The agency padlocks tax-deficient establishments under its “Oplan Kandado” program.

READ: BIR shutters 3 QC establishments with unpaid VAT

Commissioner Kim S. Jacinto-Henares earlier noted that the Oplan Kandado and Run Against Tax Evaders (Rate) programs were consistently among the BIR’s top priority programs, as these have significant impact to the attainment of the revenue goal. Rate brings alleged tax evaders to court.

As of end-July, the BIR’s tax take reached P824.1 billion, up 8 percent year-on-year, but 14-percent below the P958.4-billion goal for the first seven months.

For 2015, the BIR should collect P1.674 trillion in taxes, 25-percent higher than the P1.335 trillion in actual collections last year.

In June, the BIR ordered all establishments to submit an inventory list of their machines that generate sales receipts.

Henares said in Revenue Memorandum Circular (RMC) No. 36-2015 issued on Jun. 8 that the mandatory one-time submission due July 31 was in line with the agency’s efforts to “effectively supervise and monitor the issuance of sales invoices/receipts by business establishments.”

Last May, the BIR stopped issuing of provisional permits for sales machines, citing “abuse” in their use.

“Reports show that the three-month validity period of provisional permits is being abused and a significant number of taxpayers’ provisional PTU [permit to use] failed to be converted to final PTU of their CRM/POS/other sales machines/receipting software,” Henares noted in RMC 30-2015 dated May 28.

Early this week, the BIR ordered the use of non-thermal paper receipts by all establishments in the country.

Henares and Finance Secretary Cesar V. Purisima last Monday issued Revenue Regulations (RR) No. 10-2015, which mandated usage of the said type of paper for all cash register machine (CRM), POS machines and other invoice and receipt-generating machines or software.

This rule will immediately apply to newly opened businesses. “All new business registrants with CRM/POS/other similar machines/software with built-in printer for their transactions shall use non-thermal paper only,” RR 10-2015 read.

As for existing establishments, the BIR will give them more time to comply. “Considering the associated costs of transitioning to non-thermal paper, a tiered compliance structure is hereby put in place to allow concerned taxpayers to meet compliance requirements over a three-year period,” it said.

In this regard, the BIR said existing taxpayers with CRM/POS/other similar machines/software that use thermal paper in their daily transactions are subject to the following staggered implementation dates:

• On or before Jul. 1, 2018, for machines registered on Jul. 1, 2014 onwards;
• On or before Jul. 1, 2017, for machines registered from Jul. 1, 2013 to Jun. 30, 2014; and
• On or before Sept. 1, 2016, for machines registered prior Jul. 1, 2012 until Jun. 30, 2013.

The RR also listed down the various information that must be printed on official receipts, sales invoices and other commercial invoices, such as the taxpayer’s registered name and business name, detailed business address, date of transaction, description of the items/goods or nature of service (quantity, unit cost, total cost and value-added tax or VAT amount), among others.

The BIR warned that “any violation of these regulations shall be subject to the corresponding penalties under the pertinent provisions of the National Internal Revenue Code of 1997, as amended, and applicable revenue issuances” of the agency.