WHEREAS, on May 11, 2022, the City Accounting Department received a copy of Warrant of Distraint and/or Levy No. ARMD-WDL-2022-008 from the Bureau of Internal Revenue;
WHEREAS, on the said Warrant of Distraint and/or Levy, it was found out that San Juan City has deficiency taxes in the sum of Two Hundred Thirty-Five Million Two Hundred Ninety-Three Thousand Three Hundred Sixteen Pesos and 38/100 (P235,293,316.38) including all increments incident to delinquency pertaining to Taxable Year 2008;
WHEREAS, it was also on May 11, 2022 that the tax liability incurred during the administration of former City Mayor Joseph Victor G. Ejercito, has come to the knowledge of the current administration for the first time;
WHEREAS, two (2) administrations have passed but none of them made earnest efforts to resolve and to pay the tax deficiency that led to the ballooning of tax liability due to BIR, from the amount of Sixty- Five Million Nine Hundred Fifty-Four Thousand Two Hundred Forty-Seven Pesos and 90/100 (P65,954,247.90) basic tax to a sum of Two Hundred Thirty-Five Million Two Hundred Ninety-Three Thousand Three Hundred Sixteen Pesos and 38/100 (P235,293,316.38);
WHEREAS, on May 17, 2022, the City Legal Department wrote a letter to Hon. Caesar R. Dulay, Commissioner of the Bureau of Internal Revenue, requesting for the deferment or suspension of the said warrant while the legal team of San Juan City carefully scrutinize all possible remedies and actions available to the latter;
WHEREAS, one of the remedies available is for San Juan City to apply for a compromise settlement with the BIR;
WHEREAS, in its utmost desire to fulfill the tax obligations of the past administration and to maintain good standing with the said agency without compromising the continuity of the programs of the city for its constituents, City Mayor Hon. Francisco Javier M. Zamora and City Administrator Atty. Dennis Albert S. Pamintuan had a series of discussions with Hon. Caesar R. Dulay and other BIR officials for possibility of a compromise agreement and / or abatement of deficiency taxes including interests, penalties and surcharges;
WHEREAS, there is an application for a compromise settlement with the BIR to: (1) pay only forty percent (40%) of the basic income tax and Value Added Tax (VAT); (2) pay only the basic withholding taxes for final VAT, compensation, expanded and documentary stamp tax; and (3) abate any and all penalties, surcharges and interests that have accrued thereto.
WHEREAS, the proposal of the San Juan City to the BIR will reduce City’s tax liability from Two Hundred Thirty-Five Million Two Hundred Ninety-Three Thousand Three Hundred Sixteen Pesos and 38/100 (P235,293,316.38) to Forty Million Nine Hundred Ninety-Seven Thousand Nine Hundred Forty Two Pesos and 75/100 (P40,997,942.75), thus saving public funds amounting to One Hundred Ninety Four Million Two Hundred Ninety-Five Thousand Three Hundred Seventy-Three Pesos and 63/100 (P194,295,373.63);
WHEREAS, before any compromise settlement is made, there is a need to set aside funds to assure any financial obligation in the agreement is met;
WHEREAS, there is an urgency to settle the obligations incurred by the previous administration to prevent the serving of the Warrant of Distraint and/or Levy which could lead to the distraining of goods, chattels or effects, and other property of San Juan City, levying of real property and interest in/or rights to real property of San Juan City or garnishing of funds of San Juan City;
NOW THEREFORE, BE IT ORDAINED AS IT IS HEREBY ORDAINED, by the Sangguniang Panlungsod of the City of San Juan, Metro Manila in a session duly assembled that:
Section 1. The Supplemental Budget No. 3 of the City of San Juan, Metro Manila for Fiscal Year 2022 in the total amount of Forty Million Nine Hundred Ninety Seven Thousand Nine Hundred Forty Two Pesos and 75/100 (Php 40,997,942.75) for the payment of prior year’s obligation of the City is hereby approved.
The Budget documents consisting of the following are incorporated herein and made integral part of this Ordinance:
Section 2. Sources of Funds. The source of fund for the Supplemental Budget No. 3 for the Fiscal Year 2022 in the total amount of Forty Million Nine Hundred Ninety Seven Thousand Nine Hundred Forty Two Pesos and 75/100 (Php 40,997,942.75) shall be coming from the Unappropriated Surplus – 2021.
Unappropriated Surplus 2021 | P40,997,942.75 |
Total Available Funds for Supplemental Budget | P40,997,942.75 |
Section 3. Use of Funds. The amount of Forty Million Nine Hundred Ninety Seven Thousand Nine Hundred Forty Two Pesos and 75/100 (Php 40,997,942.75) is hereby appropriated for the Supplemental Budget No. 3, Series of 2022 of the City Government of San Juan, as follows:
Proposed New Appropriations Language
For SB-3-2022
New Appropriations by Program/Project/Activity
Program/Project/Activity | Current Operating Expenditures (Personal Services) | Current Operating Expenditures (Maintenance and Other Operating Expenses) | Capital Outlay | Financial Expenses | Total |
A. General | |||||
I. General Administration Services | - | - | - | - | - |
II. Operations – Maintenance & Other Operating Expenses and Capital Outlay | - | - | - | - | - |
Sub-Total | - | - | - | - | - |
B. Project | |||||
I. Locally-funded Projects | |||||
Sub-Total | - | - | - | - | - |
BUDGETARY REQUIREMENT/SPECIAL PURPOSE FUND | |||||
PRIOR YEAR’S OBLIGATION | - | 40,997,942.75 | - | - | 40,997,942.75 |
Sub-Total | - | 40,997,942.75 | - | - | 40,997,942.75 |
TOTAL APPROPRIATIONS | - | 40,997,942.75 | - | - | 40,997,942.75 |
Section 4.GENERAL PROVISIONS:
4.1 The City Mayor is authorized to sign for in behalf of the City, all contracts, documents and papers pertaining to transaction involving activities funded under the Special Activities; appointments of contractual personnel and all projects, either in lump sum amount or specifically named and detailed herein and that are funded under this Appropriation Ordinance. Any such contract signed by virtue hereof is deemed valid and is ratified and confirmed.
4.2 In the interest of efficiency and economy, the Local Chief Executive (LCE) may consolidate the functions of any office with those of another to implement the pertinent provisions of RA 9388. Any executive order issued by the LCE on this respect shall be immediately executory unless revoked by the Sangguniang Panlungsod within sixty (60) days from its issuance.
4.3 Use of Appropriated Funds and Savings- Funds shall be available exclusively for the specified purpose for which they have been appropriated. However, the City Mayor or the City Vice Mayor as Presiding Officer of the Sangguniang Panlungsod as the case may be, are hereby authorized to augment any item in the approved supplemental budget for their respective offices from savings in other items within the same class of their respective office appropriations;
4.4 Any and all attachments to this Ordinance such as Form LBPF No. 9 (Statement of Supplemental Appropriation); and LBP Form No. 8 (Statement of Funding Sources) are hereby deemed incorporated herein.
Section 5. Separability Clause – If for any reason, any section, item or provision of this Ordinance including the herein General Provision is declared unconstitutional or invalid, other sections, items or provisions hereof which are not affected thereby shall continue to be in full force and effect.
Section 6. Theissuance and approval hereof is subject to compliance by the City Government on existing laws and COA rules and regulations on expenditures, appropriations and procurement.
Section 7. Effectivity. This Ordinance shall take effect upon the approval of the Sanggguniang Panlungsod Council.