A Korean samgyupsal restaurant in Cebu City was ordered closed by tax authorities on Tuesday after the Bureau of Internal Revenue (BIR) flagged alleged underdeclaration of sales.
The Bureau of Internal Revenue–Revenue District Office 81 (Cebu City North) implemented the closure of Kaya Restaurant in Bonifacio District, Barangay Kasambagan, under its “Oplan Kandado” enforcement drive on April 28, 2026.
BIR officials said the establishment was found to have underdeclared its sales by more than 30 percent, which they classified as fraudulent under the National Internal Revenue Code of 1997, as amended.
RDO 81 officials said the action followed surveillance and validation work conducted by enforcement teams, including monitoring and data verification.
“We discovered serious violations… specifically, there was under declaration of sales in the amount of more than 30 percent. So it is considered fraud,” the RDO 81 director said.
Authorities said the closure was not immediate and came after the restaurant was issued multiple notices to explain and correct its tax filings.
“Procedural due process was provided to the taxpayer. A 48-hour notice was served to them and then a five-day VAT notice. But despite these notices, the establishment failed to rectify its tax deficiencies,” the official added.
BIR personnel initially issued a mission order to verify reported transactions against actual sales.
A BIR spokesperson said the inspection confirmed discrepancies between declared and actual income.
“Upon conducting the mission order, we have discovered that indeed there has been an under declaration and that under declaration is more than 30 percent of the sales,” the spokesperson said.
The agency said it first issued a 48-hour notice requiring the business to explain the discrepancy and settle liabilities.
“We give them 48 hours to explain or justify the said under declaration,” the spokesperson said.
Although the restaurant submitted a reply, the BIR said it failed to adequately address the findings.
“Their reply did not really justify… because they did not dwell on the under declaration,” the official added.
A five-day VAT compliance notice was later issued, but authorities said the establishment still failed to comply within the given period.
With the lapse of required deadlines, BIR personnel enforced the closure order in the afternoon of April 28, between 2 p.m. and 3 p.m.
The restaurant owner was not present during the operation, but the order was received by a manager authorized through a special power of attorney.
The BIR said the closure remains temporary and may be lifted once tax deficiencies are settled.
Officials added that the enforcement forms part of efforts to ensure compliance and fairness in the business sector.
“Under the directive of the commissioner, we do the Oplan Kandado to serve as a message to other taxpayers,” the spokesperson said. (SBA)
Photo by Kaiser Jan Fuentes
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