A BUREAU of Internal Revenue (BIR) regional office’s plan to issue a closure order against listed developer Megaworld Corp. had no basis, Finance Secretary Carlos G. Dominguez III said.

“There was a threat to close down a publicly listed company without any basis. There is no finding that they (Megaworld) did not pay the tax, there is none,” Mr. Dominguez said to reporters on the sidelines of a Department of Finance (DoF) event in Manila on Monday.

Shares of Megaworld plunged on May 17 after the BIR Revenue Region 8B – South NCR sent a media advisory regarding its plan to issue a closure order against the company the next day.

The order was withdrawn later that day, after Megaworld said it would comply with the audit.

“I’m just saying I haven’t seen an assessment and charge sheet. I haven’t seen it. By announcing it publicly like that on a publicly listed company, you are not affecting only the company, you are affecting the shareholders. It is not correct,” the Finance chief said, noting the Social Security Service (SSS) and the Government Service Insurance System (GSIS) are shareholders of Megaworld. 

In a separate Viber message to reporters, Mr. Dominguez said shareholders of Megaworld collectively lost about P111 million in value between May 17 to 23. Of this total, the paper losses of SSS and GSIS are around P37 million.

The BIR Revenue Region No. 8B – South NCR had claimed the closure order stemmed from Megaworld’s refusal to comply with an audit to check if the company paid taxes on one-time transactions on the sale of properties in Taguig City.

However, Mr. Dominguez said Megaworld did not deny the BIR access to its books, but was only questioning the regional office’s jurisdiction.

“Settle the jurisdictional issue first before you go out. Don’t be stupid. It was the left hand not knowing what the right hand is doing. Come on, that’s not professional thought,” he said, adding that the BIR closure order never reached his desk.

Mr. Dominguez said the audit on Megaworld would now be conducted by the Large Taxpayers Service of the BIR National Office, not the regional office.

On Saturday, the DoF ordered the suspension of orders creating special audit tax forces on real estate developers and multilevel marketing firms, as well as task forces for Philippine Offshore Gaming Operators and electronic sabong firms. It also ordered a halt on all field audit and other operations under these task forces.

“I stopped these investigations because I don’t want something like that, a legitimate thing to do to be used to harass people for false pretense, for nothing,” Mr. Dominguez said. — Tobias Jared Tomas