By CHRISTIAN WAKEFIELD, Reporter
CEBU third district Rep. Pablo John Garcia warned Cebu City Acting Mayor Michael Rama, city councilors, and other officials that they could be held liable for malversation should it turn out that titles to two hectares of lot at the South Road Properties (SRP) were indeed already transferred to Filinvest Land Incorporated (FLI).
Garcia claimed the transaction is in violation of Commission on Audit (CoA) rules regarding payment of taxes and incidental expenses in the sale of government-owned lands.
Under Section 23 of the joint venture agreement between FLI and the Cebu City Government, the city allegedly bound itself to pay “all capital gains taxes and documentary stamp taxes, as well as survey fees and other expenses accruing in the sale and transfer” of the 10.6 hectare property acquired by FLI by outright purchase.
“This is in flagrant violation of Section 197 of COA Circular No. 92-386 that provides that expenses to the registration and transfer of ownership from the local government to the vendee shall be borne by the vendee,” said Garcia.
In real estate transactions, capital gains taxes, documentary stamp taxes and transfer taxes will be around seven and a half percent of the total purchase price, or the fair market value, whichever is higher, said Garcia.
“Given that first payment was P348 million for the first two hectares, the amount paid for these taxes would have been more than P26 million,” said Garcia.
The figure does not include, he said, other incidental expenses such as survey fees, which Cebu City likewise allegedly committed to shoulder.
Garcia characterized as a “bonanza” the over P112 million FLI would gain in violation of the law from not paying capital gains, documentary stamp taxes and transfer taxes on the P1.5 billion transaction.