Mayor files raps vs. mall owners
Osmeña says SM Prime Holdings understated size of building to avoid paying higher taxes
SM defers comment until its tax department reviews the mayor’s claims
CEBU City Mayor Tomas Osmeña yesterday filed criminal charges against four officials of SM Prime Holdings, Inc. for allegedly misrepresenting the size of its building to reduce its tax obligations to the City Government amounting to about P23 million.
Osmeña, through City Legal Officer Joseph Bernaldez, filed the complaint before the Office of the Cebu City Prosecutor against SM Prime Holdings for violation of Art. 318 of the Revised Penal Code (other deceit).
Named respondents to the complaint are Hans T. Sy, Jr., SM Prime Holdings chairman of the Board; Jose Cuisia, Jr., vice chairman of the Board; Hans Sy, executive director; and Imelda Lim, the firm’s senior tax manager.
Interviewed after he filed the complaint, Osmeña said that SM Prime Holdings understated the size of SM Seaside City.
The proper tax obligations of SM this year alone should have been about P37 million, but they only paid P14 million, or an underpayment of tax amounting to about P23 million, Osmeña told reporters yesterday.
“This was the kind of cor- ruption that is going on in the (Michael) Rama administration. These people think that because they are SM, they can get away with it,” he said, calling SM officials as cheaters.
Market value
Osmeña said that SM declared that SM Seaside City has a fair market value of only P1.9 billion.
But a thorough reassessment by the City Assesor’s Office showed that its fair market value is P3.58 million.
Likewise, Osmeña said the mall was built on the setback property.
He said the City Government sent a letter to SM Prime Holdings stating that all their occupancy permits, including tenants therein, were put on hold.
“You should correct it first. Or else, we will shut down the building. They have to follow the law. If we let it go, the next mayor will let it go until you cannot enforce it anymore,” said Osmeña.
Assessment
The complaint came after Osmeña ordered a thorough assessment of tax declaration of SM Seaside City Cebu, which declared a fair market value of P1,337,381,140.
But after a thorough review of all the records relative to its tax declaration, Osmeña said the city assessor found “substantial and material misrepresentation” of the mall’s floor areas and the underclated portions of the building, such as basement, pavement, and roof parts.
Subsequently, the City Assesor’s Office issued a revised Real Property Field Appraisal and Assesment Sheet stating that SM Seaside City’s tax obligation to the City Government is P37.6 million this year.
In July this year, SM Prime Holdings paid P14.04 million, or a shortage of about P23.56 million in tax obligations for this year alone, the mayor said.
Osmeña said an employee assigned at the City Assesor’s Office confirmed that a tax declaration was issued to SM Prime Holdings despite the absence of an ocular
inspection of the mall.
Osmeña said the building permit and occupancy permit issued to SM Seaside City were issued on Aug.10, 2012 and March 12, 2016, respectively.
The tax declaration was also issued in the later part and in “chronological order.”
“Undoubtedly, this act (of SM Prime Holdings) was made precisely to defraud the City of Cebu from collecting the correct and exact taxes, an act clearly prejudicial to the latter,” said Osmeña in his complaint-affidavit.
Such fraudulent represen- tation by SM is a form of “deceitful act” and thus a violation of Art. 318 of the Revised Penal Code, the mayor said.
“They’re the most influential, richest company in the country. If they’re cheating Cebu City, they’re cheating the country. Ako ra ang boang. Ako ra ang isog. (I’m the only one crazy and brave enough). It’s going to be hard to fight them, but I have to put my foot down. I’ll do this for Cebu,” Osmeña said in a press conference.
Aside from the criminal cases, the mayor said the City will freeze all the building permits of SMPHI until they demolish and correct the discrepancies.
If proven guilty, he wants all SM stores in the shopping mall closed, including its movie house.
He, however, clarified that the closure will not include “innocent” stall owners and occupants.
Osmeña will also file charges against the previous administration for allegedly allowing the developer to build on a setback.
Response
For its part, SMPHI declined commenting on the matter until they can review the details of the mayor’s complaint.
“We cannot comment until we can refer the matter to our tax department who will have to review the details of the mayor’s statement regarding the SRP real property taxes,” SMPHI said in a text message to