City loses P25M in taxes due to fake documents

The Cebu City government is deprived of at least P25 million real property taxes due to “fake” electronic Certificate Authorizing Registration (eCAR).

Acting City Assessor Eleodoro Diaz IV said that two e-CARs were already validated by the Bureau of Internal Revenue and found to be counterfeit. There are 13 other eCARs that are yet to be validated.

“ECARs are issued by the BIR as proof that you have paid the capital gains tax, the donors tax, the state tax and the documentary stamp tax. This is one of the requirements to be submitted to the Registry of Deeds to support the transfer of the land title to the owner,” he told reporters.

Diaz said his office together with the Employment Management Committee on Inquiry, and the BIR are already conducting investigation on the proliferation of fake eCARs since August. At least two employees at the City Assessors Office are being monitored because of their alleged involvement in the proliferation of fake eCARs.

Diaz vowed that these two City Hall employees will be dismissed from the service if proven that they are involved in defrauding the city government millions in taxes. Diaz said he coordinated with the BIR upon receiving reports about the use of fake documents by some property owners to evade paying the right amount of taxes.

BIR OIC-Chief Human Resource Management Division Gloria FallerPeque said they discovered that the two eCARs subject for verification were not among the documents issued by them. BIR refused to give the serial numbers because these are still subject for further investigation.

Diaz said the efforts of his office to look into the authenticity of the documents submitted for his approval is among the thrust of the current administration to go after the tax cheats. If the eCAR is fake, it means no payment was made by the property owner before the BIR and it is affecting the tax collection of the government. Local government units benefit from the tax collected by BIR through its share of the Internal Revenue Allotment.

Diaz said the BIR will look into the criminal liability of the property owners who submitted fake eCARs. Diaz admitted the possibility that the practice has been going on for several years now.

He explained that once the property sale is perfected, the buyer will go to the BIR to secure eCAR after payment of taxes then proceed to the Registry of Deeds for the transfer of titles, then to the City Assessor’s Office.

Diaz also advised property owners to avoid transacting with fixers and ensure that the documents they secure are authentic.