Summary

SAI Philippines completed a levy audit at the seaport and terminal management company – Prudential Customs Brokerage Services Inc. Port Terminal Management Corp. (PCBSI PTMC). The objectives of the audit were to verify the accuracy and completeness of the transfer of fees to the government, as well as the accrual of interest and penalties for late payments. Delays of 1 to 40 days were noted in the remittances of government shares arising from special and other cargo related services over the period from January 1, 2021 to May 31, 2022. However, PCBSI PTMC timely remitted to the Philippine Ports Authority the annual fixed fee of 75 million Philippine pesos (USD 1.3 million) for the period from June 1, 2022 to May 31, 2023, and 46 million Philippine pesos (USD 0.8 million) for the period from June 1, 2023 to December 31, 2023. Auditors found that PCBSI PTMC failed to remit government shares from equipment rental for January and February 2021 as well as March 2022. SAI also noted failure to remit variable fees amounting to 121,300 Philippine pesos (2,070 USD) which represents 60% of the gross revenue from June 2022 to December 2023 for the provision of additional services not included in the determination of the minimum concession fee. Therefore, SAI calculated that this violation resulted in the non-payment of VAT in the amount of 14,600 Philippine pesos (USD 249). Resulting interest and penalties totaling 46,300 Philippine peso (USD 0.8 thousand) were incurred. Moreover, auditors noted that a Star Breeze foreign cruise ship's arrival at the port of Puerto Princesa and associated terminal fees were not reflected in the reports. SAI issued a number of recommendations, including ensuring regular reporting of actual traffic through the port, and PCBSI PTMC's compliance with the payment schedule for quarterly variable concession fees, etc.