The Bureau of Internal Revenue (BIR) said on Monday it had padlocked LBC subsidiary LBC Express-SMM Inc., formerly known as Bag Acceptance Corp., and its branches in Metro Manila for underdeclaration of tax due for three years totaling P145.7 million.
LBC Express, meanwhile, expressed surprise at the BIR closure orders, saying the VAT payments have been properly made and proven.
“LBC Express-SMM Inc. was the subject of several mission orders authorizing Revenue Officers of the BIR to conduct a post-evaluation and verification of its 75 point-of-sales machines,” the tax bureau said in a statement.
The BIR said it has shuttered the simultaneous operations of LBC Express-SMM’s branches in the cities of Taguig, Makati, Pasay, Parañaque, Las Piñas and Muntinlupa.
The tax agency said the LBC subsidiary underdeclared its correct taxable sales by P105.04 million, P27.49 million, and P13.16 million for taxable years 2013, 2014, and 2015 (January only), respectively.
Furthermore, it said LBC Express-SMM was also found to have modified its point-of-sale machines without prior notification.
The BIR said the results of the enforcement activities showed that the LBC subsidiary caused the machines to be either modified, integrated or altered without prior notification and approval by the revenue district offices concerned.
The closure was made pursuant to the BIR’s Oplan Kandado program.
To clarify some points regarding the 32 branches ordered closed by the BIR, the LBC issued a statement saying the BIR’s Sept. 24 closure orders affecting LBC SMM’s branches “came as a complete surprise, especially since the subject VAT payments were in fact, properly made and proven.”
The statement further said: “This is an isolated incident, in the areas covered by LBC SMM (South Metro Manila). LBC SMM received a 5-Day VAT Compliance Notice from the BIR dated August 5, 2015. The VAT Compliance Notice was replied to on August 27, 2015 properly addressing and clarifying the matter, with attached documentary proof that LBC Express, Inc. had, in fact, duly and properly made all VAT payments.
“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 September 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.”
“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. We assure our customers of business as usual. As always, we remain at your service,” the statement quoted Miguel A. Camahort, president and chief operating officer of LBC Express Inc., as saying.
The BIR is authorized to suspend or close the business operations of a taxpayer for a period of not less than five days for failure to: register; issue value-added tax (VAT) official receipts or sales invoices; file correct VAT returns; or pay the correct VAT under the Section 115 of the Tax Code, as implemented through Revenue Memorandum Order 03-2009. MAYVELIN U. CARABALLO