LBC: Shuttered subsidiary’s VAT already paid

Cargo and courier services provider LBC Express Inc. on Sunday claimed that its subsidiary covering southern Metro Manila had already paid its due value-added taxes or VAT, hence the closure of its 33 branches by the Bureau of Internal Revenue (BIR) last week was a “surprise.”

READ: BIR shuts down 33 courier service shops

In a statement to the Inquirer, LBC Express president and chief operating officer Miguel Angel A. Camahort said it was “an isolated incident, in the areas covered by LBC SMM (South Metro Manila).”

“LBC SMM received a five-day VAT compliance notice from the BIR dated Aug. 5, 2015. The VAT compliance notice was replied to on Aug. 27, 2015, properly addressing and clarifying the matter, with attached documentary proof that LBC Express had, in fact, duly and properly made all VAT payments,” Camahort said.

According to the executive, “ever since said reply was filed, LBC SMM did not receive any further notices or communication from the BIR on the matter.”

“Thus, the BIR’s Sept. 24, 2015 precipitate closure orders affecting LBC SMM’s branches right before a long weekend came as a complete surprise, especially since the subject VAT payments were in fact properly made and proven,” Camahort said.

“Rest assured, however, that the LBC Group is rectifying the situation and remains open to serve our customers through the rest of its nationwide network,” the executive added.

On Saturday, the BIR reported that it had padlocked the branches of the said LBC Express subsidiary due to unpaid taxes during the last three years amounting P145.7 million.

Eight branches in Las Piñas City, one in Makati City, six in Muntinlupa City, six in Parañaque City, four in Pasay City, and eight in Taguig City were shut down last Thursday through the closure orders issued by BIR Deputy Commissioner Nelson M. Aspe.

The BIR claimed that LBC 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, according to the country’s biggest tax-collection agency.

The BIR added that it had discovered that LBC SMM underdeclared its taxable sales by P105 million in 2013, P27.5 million in 2014, and P13.2 million in January 2015.

The agency further claimed that while it urged the firm to pay its tax liabilities and file VAT returns with correct taxable receipts, LBC Express-SMM did not comply with the 48-hour as well as five-day VAT compliance notices.

“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,” it noted.

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