Builder of INC’s colossal Philippine Arena faces smuggling case

Philippine Arena in Bocaue Bulacan INQUIRER FILE PHOTO / MARIANNE BERMUDEZ

The Bureau of Customs (BOC) on Wednesday said it was running after property developer New San Jose Builders Inc., which allegedly failed to pay taxes for importing construction materials when it built the Iglesia ni Cristo’s (INC) massive Philippine Arena.

In a statement, the BOC said it transmitted a smuggling complaint to the Office of the Solicitor General on Tuesday.

Customs Commissioner Nicanor E. Faeldon also told reporters that New San Jose Builders’ tax dues had reached P1 billion for importing construction materials even as it invoked the tax-free perks under Republic Act No. 9593 or the Tourism Act of 2009. The law gives away incentives to firms within tourism enterprise zones.

Subject to rules and regulations, Section 86 of the law provides that registered enterprises shall be entitled to an exemption of 100 percent of all taxes and customs duties on importations of capital equipment. The section also described capital investments and equipment necessary for various kinds of tourism enterprises.

Faeldon claimed, however, that “their tax-exemption was neither approved by the Department of Finance (DOF) nor the Bureau of Internal Revenue but they still pushed through with their importation.”

The BOC said the construction firm availed of the privilege when it imported construction-related items from 2012 to 2013. The Philippine Arena in Malolos, Bulacan, touted as the country’s biggest coliseum, is INC’s centerpiece in its 75-hectare complex called Ciudad de Victoria.

“They [San Jose] only used a surety bond, so it’s irregular. When their bond expired and was to be forfeited, we wrote them five times but they did not answer us,” Faeldon added.

Since it supposedly does not have a certificate of exemption from the DOF, Faeldon said New San Jose Builders was required to post such bonds in covering the duties and taxes for the shipments.

“It posted bonds amounting to P947,292,025.72 issued by Centennial Guarantee Assurance Corp. (CGAC), Intra Strata Assurance Corp. (Isac) and Philippine Fire and Marine Insurance Corp. (PFMIC),” according to the BOC.

These three surety companies were included in the BOC’s complaint against New San Jose Builders.

“Demand letters were sent by the district collector of the Port of Manila (POM) to San Jose, CGAC, Isac and PFMIC in 2015. On July 28, 2015, the district collector sent a final demand letter to the surety companies.”

After repeated demands, the acting chief of the POM’s bonds division recommended the forfeiture of the bonds on Dec. 1, 2015.

The POM’s law division also subsequently recommended the forfeiture of the matured bonds in a memorandum dated Sept. 20, 2016, the BOC said.