PBA AVOIDS P532.7M TAX DUES

THE Philippine Basketball Association (PBA) escaped paying huge tax deficiencies amounting to P532.7 million after the Court of Tax Appeals (CTA) approved the compromised agreement it entered into with the Bureau of Internal Revenue (BIR).

In a 12-page decision dated September 21, the tax court approved the PBA and BIR’S compromise agreement allowing the pro league to pay P48.5 million for settlement of its tax deficiencies worth more than P532.7 million, including interest and surcharges covering the years 1988-1998, 1999 and 2000,

“Upon review of the supporting documents attached to the joint motion and the joint verified compliance, the Court finds that petitioner PBA has fully settled the legally required minimum amounts for compromise settlement...,” the CTA ruling said.

The PBA fully settled the amount under the agreement.

The CTA noted that there is sufficient compliance with the law through the submission of the certificate of availment last February 12, 2020, which states that PBA’S applications for compromise agreement have been approved by the National Evaluation Board (NEB) together with other documents showing unanimous approval by the members of the NEB. The CTA described a compromise as a contract whereby the parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced.

“Judicial Compromise Agreement is hereby approved and this Judgment Based on Compromise Agreement is hereby rendered in accordance therewith. The parties are hereby enjoined to faithfully comply with all the terms and conditions of the aforesaid Judicial Compromise Agreement,” the ruling read.

Under the compromise agreement, PBA offered and the BIR accepted in July 2019 the total payment of P48.5 million or the net amount of 40 percent of all deficiency percentage taxes and 100 percent of all withholding taxes less than the more than P23.2 million previously paid in 2002 and 2003.

Prior to the compromise agreement, the BIR issued formal assessment notices and letters of demand in January 2003 for the years 19881998, 1999 and 2000 over tax deficiencies worth more than P532.7 million inclusive of interests and surcharges, according to the agreement.

The PBA availed itself of the voluntary assessment and abatement program in 2002 and paid P3 million in advance and offered a compromise settlement of 15 percent of basic deficiency taxes in 2003 and paid the amount of P20.2 million.

The bureau denied the offer and the association raised the case to the court to cancel the warrant of distraint and/or levy issued in July 2016.

The PBA submitted a Proposal for Amicable Settlement to the BIR which was eventually approved by the parties.

The CTA has now deemed the case close and terminated.

The decision was penned by Associate Justice Juanito Castañeda Jr. and concurred by Associate Justice Jean Marie Bacorro-Villena.