MANILA, Philippines (UPDATE) – The Bureau of Internal Revenue (BIR) has slapped charges against officials of a construction firm who have been accused of failing to supply accurate information on their income tax return and to pay taxes amounting to nearly P69 million.
This is the second tax evasion case filed by the country’s main revenue agency in line with the Aquino government’s promise to crack down on cheats and smugglers to raise revenues and trim the budget deficit.
The BIR filed the tax complaint against Dennis Masigan and Natalie Ng Masigan, president and corporate secretary, respectively, of DSM Construction and Development Corp. They reside in the posh Corinthian Gardens.
Also charged was Eldrin Masigan in his capacity as vice president for operations of the corporation.
They are facing charges at the Department of Justice for failing to supply correct and accurate information in their 2006 income tax return. Their company was also found to have income tax and value-added tax deficiencies worth P52.5 million and P16.1 million, respectively.
The charges stemmed from DSM’s failure to report to the BIR the P80-million compromise settlement it received in full from Mega World Globus Asia Inc. in 2006. The settlement was considered as the construction industry’s largest arbitration award involving unpaid billings.
Earlier, the BIR filed tax evasion charges against pawnshop owner William Villarica, who paid only P25,600 in income tax between 1998 and 2009, but was able to buy a P26 million Lamborghini sports car.
Accomplices in tax evasion cases
In a related development, Finance Secretary Cesar Purisima said the government will also go after company auditors and lawyers who are involved in forging income tax declarations.
Purisima warned that licenses of those who will be charged may be revoked by the Professional Regulation Commission.
“We will review accreditation of auditors who audit large taxpayers. We are holding accounting profession responsible and we will file against erring accountants and lawyers,” he said.
The finance chief said they will also hold liable banks which have been accomplices in tax evasion cases.
Purisima said some banks are using a “second set” of financial books instead of financial statements filed before the BIR as bases in granting loans to borrowers.
Annually, the government is losing P250 billion due to tax evasion. Its tax revenue to gross domestic product (GDP) ratio stands at only about 13%, significantly lower compared to the 16% average posted by neighboring countries.
“From that, it’s obvious that we’re losing roughly 3% of our GDP. There’s really a room for improvement,” Purisima noted. –abs-cbnNEWS.com
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