BIR shuts down 2 Cebu firms over tax liabilities

The Bureau of Internal Revenue in Central Visayas (BIR-13) has temporarily suspended the operations of a restaurant in Mabolo, Cebu City, and a warehouse of a barbecue restaurant company in Subangdaku, Mandaue City, due to multiple tax violations.

According to BIR-13 Legal Officer Jay Rozen Bartazan, the 88 BBQ House in Mabolo and its warehouse in Subangdaku violated Section 115 of the Tax Code of 1997.

“They made payments, but they under-declared their income. So, it was insufficient. Their under-declaration is more than 30 percent, which is one of the grounds for suspension and temporary closure,” Bartazan said.

“In BIR, there is a certain threshold of P3 million. Since they exceeded the threshold, they have to register as a VAT taxpayer, which they failed to do. This is a violation of the tax code,” he cited.

BIR-13 regional director Douglas Rufino told DAILY TRIBUNE that their investigation team found the restaurant had been using unregistered receipts and cash register machines and failed to issue the required value-added tax receipts.

BIR-RDO 81 issued a notice of discrepancies on 17 September 2024, but the restaurant management failed to explain.

BIR issued Revenue Memorandum Order 37-2024 which established new classifications on gross sales for business taxpayers. The initiative aligns with Section 21(b) of the tax code, as amended, and Section 47 of the Ease of Payment Taxes Act.

Gross sales refer to total sales revenue, net of VAT if applicable, during the taxable year, without any other deductions. The measure aims to streamline tax administration and ensure that tax obligations correspond to the scale of business operations.

Under the Philippine Tax Law, micro taxpayers or those with gross sales or receipts below P3 million annually are generally exempt from VAT. Instead, they are subject to a three percent tax on their gross sales or receipts if they opt not to register for VAT.

But, if a micro Taxpayer like 88 BBQ House whose gross sales exceed the P3 million threshold at any time during the year, they must register for VAT and comply with the corresponding VAT regulations.