By Charles R. Pepito, Ernesto Banawis
A branch of BDO Unibank Inc., the country’s biggest bank owned by tycoon Henry T. Sy Sr., has been accused of tax evasion by Cebu City Mayor Tomas R. Osmeña for paying only P35 in business taxes for 2015.
Osmeña has already issued an order, dated March 22, 2017, to the branch manager to explain why it should not be closed immediately.
“Do you know how much the BDO branch in Jones paid in business taxes for 2015? P35. Not P35 million. Not P35,000. P35,” Osmeña said in his Facebook post.
He referred to the BDO branch on Osmeña Boulevard, formerly named Jones Avenue, the main thoroughfare linking the city’s central business district and uptown areas.
“BDO is run by tax evaders and law breakers. They will be shut down,” Osmeña said in post that has gone viral in Cebu. It already has 19,000 likes and 10,858 shares since last weekend.
He also uploaded a copy of an order he issued, dated March 22, 2017, to show cause in five days “as to why the City of Cebu shall not order the immediate closure of BDO-Cebu Osmeña branch”.
Addressed to Branch Manager Pilarino M. del Rio, records from the Business Permit and Licensing Office, the Mayor’s Office and the Treasurer’s Office showed that the BDO branch only declared a gross income of P6,986 in calendar year (CY) 2016.
According to the order, this amount was reflected in its CY 2016 Business Permit 1161. The same amount was reflected in its application for renewal CY 2016 and CY 2017.
The mayor said the branch reported 11 employees, composed of a manager, a cashier and nine employees. “By no stretch of the imagination would the amount of P6,986, or a gross income of P582 a month, be enough to cover the employee salaries…and other overhead expenses,” Osmeña pointed out.
Because of these reasons, he accused the branch for falsifying its application and evading payment of the correct taxes.
Earlier, bank officials had maintained that they complied with the legal requirements.
They succeeded in securing a temporary restraining order, after the mayor had threatened to close down another branch for paying only P2,000 in business taxes.
“We have complied with the requirements but despite that, the city government has refused to accept payments for local taxes and fees, and issue the permits contrary to what they did in the past,” BDO said.
Last week, however, Osmeña discovered that another branch paid only P35.
The chief executive of BDO, Nestor Tan, had said the bank is planning to put up 50 to 70 branches this year. He said most of these branches would be built outside the National Capital Region.
BDO is eyeing a 10-percent growth in net profit in 2017 to P28.810 billion, from the 2016 projection of P26.129 billion, amid the robust domestic economy that would sustain the expansion of its core businesses.
BDO posted a net income of P19.321 billion in the first nine months of 2016. BDO expects net interest income to grow 16 percent this year to P76.556 billion, from the projected P65.780 billion in 2016.
Total assets are expected to reach P2.6 trillion this year. BDO has more than 1,000 operating branches and over 3,000 automated teller machines nationwide. It also has a branch in Hong Kong and 26 overseas remittance and representative offices in Asia, Europe, North America and the Middle East.
Acting on BDO’s application for issuance of a writ of preliminary injunction, a local court issued an injunction order on March 28, enjoining the Cebu City mayor from performing any act that leads to and/or causes the closure of BDO’s branches in Cebu City, including requiring information or document not prescribed by existing law and regulations, as well as making statements similar to those made in the newspapers.
“With this injunction order, BDO looks forward to having its pending business-permit applications in Cebu City be acted upon by the city mayor, considering that BDO has submitted all the required documents needed by the city government. BDO assures its Cebu City branch personnel and clients that it has complied with legal requirements in ensuring continuing business and uninterrupted service in Cebu City, and this injunction order is an affirmation of its compliance,” BDO said in a statement.