Dentist from Caloocan City charged with tax evasion for grossly underdeclaring service income received thru credit card payments

Dentist from Caloocan City charged with tax evasion for grossly underdeclaring service income received thru credit card payments

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against DR. ALEXANDER EDUARDO REYES GARCIA (Dr. GARCIA) for Willful Attempt to Evade or Defeat Tax, and Deliberate Failure to Supply Correct and Accurate Information in his Income Tax Return (ITR) for taxable years 2011, 2012 and 2013 in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

DR. GARCIA was likewise charged with Deliberate Failure to file his Value Added Tax (VAT) Returns and Failure to Register as VAT Taxpayer for taxable years 2011, 2012 and 2013 in violation of Section 275, in relation to Section 236(G)(1) of the  Tax Code.

DR. GARCIA is a dentist operating under the business name SACRED HEART DENTAL CENTER with business address at 129 Asuncion Street, Morning Breeze Subdivision, Brgy. 84 Zone 8, Caloocan City.

The case against DR. GARCIA stemmed from information extracted from the Information Systems database indicating that income payments made to the dentist for the years 2011, 2012 and 2013 amounted to P42.45 million. On the other hand, total income declared by DR. GARCIA in his ITRs for the said three-year period amounted to P2.98 million, broken down into: P0.891 million in 2011; P0.999 million in 2012; and P1.09 million in 2013.

Verification of the said third-party information by investigators through access letters sent to credit card companies whose services were utilized by the clients of DR. GARCIA to pay him revealed that he received from BDO Unibank, Inc. P3.30 million in 2011, P3.13 million in 2012 and P1.84 million in 2013. He also got from Citibank, N.A. P10.89 million in 2011, P7.52 million in 2012 and P15.77 million in 2013. In sum, DR. GARCIA earned P14.19 million in 2011, P10.65 million in 2012 and P17.61 million in 2013.

A comparison and evaluation of DR. GARCIA’s declared service income as against the income he actually received from the said credit card companies showed that he substantially underdeclared his correct taxable income/receipts by 1,492% or P13.30 million in 2011, 966% or P9.65 million in 2012 and 1,516% or P16.52 million in 2013.

Under Sec. 248 (B) of the Tax Code, under-declaration of taxable income by more than 30% constitutes a prima facie case of fraud.

He likewise failed to register as VAT Taxpayer considering that the amount of his service fees starting in 2011 exceeded the threshold amount of P1.92 million and thus, failed to file the required VAT returns and pay the corresponding VAT due thereon.

As a consequence of his acts and omissions, DR. GARCIA was assessed a total tax liability amounting to P31.64 million, inclusive of surcharges and interests, broken down into: 2011 - P11.91 million (Income Tax - P8.35 million and VAT – P3.56 million); 2012 - P7.88 million (Income Tax - P5.46 million and VAT – P2.42 million); and 2013 - P11.85 million (Income Tax - P8.30 million and VAT – P3.55 million).

The case against DR. ALEXANDER EDUARDO REYES GARCIA is the 281st filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of the National Investigation Division.

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Delinquent Software and Manufacturing Companies charged with willful failure to pay tax

Delinquent Software and Manufacturing Companies charged with willful failure to pay tax

The Bureau of Internal Revenue (BIR) today filed separate criminal complaints with the Department of Justice against two (2) delinquent corporate taxpayers (including their responsible corporate officers) - for Willful Failure to Pay Taxes under the National Internal Revenue Code of 1997, as amended (Tax Code).

Charged with violating Section 255 in relation to Sections 253 and 256 of the Tax Code were INTERACTIVE MOBILE AT EXTREMES SOLUTIONS COMPANY (INTERACTIVE MOBILE) and its responsible corporate officers – General Manager/Managing Director RINO JOSE G. CAPATI, Treasurer JASON ANTHONY P. VIDAURE, and Corporate Secretary MITCHELLE G. LIRAZAN. INTERACTIVE MOBILE is a Philippine corporation primarily engaged in designing, developing and selling software applications for mobile computing tasks and processes with registered address at 242 Cityland 8, 98 Gil Puyat Ave., Makati City. Together with its responsible officers, INTERACTIVE MOBILE was assessed deficiency tax liabilities for taxable year 2006 in the sum of P7.43 million, inclusive ofsurcharges and interests, broken down as follows: Income Tax (IT) - P4.36 million; Value Added Tax (VAT) - P2.97 million; Expanded Withholding Tax (EWT) – P73,089.16; and Compromise Penalty (CP) - P26,000.00.

Likewise charged with the same violation were EMERALD MULTI-RESOURCES & MANUFACTURING CORPORATION (EMERALD), its President ERNESTO R. CRUZ, Treasurer DIANNE WHIRLETTE N. PATRICIO, Vice-President CAYETANO J. VIRAYO, and Corporate Secretary VIVIAN V. ANDALUZ. EMERALD is a Philippine corporation primarily engaged in the manufacturing of automotive soft trim with registered address at No. 6 Carlo Drive, Bagumbayan, Taguig City. Together with its responsible officers, EMERALD was assessed deficiency tax liabilities for taxable year 2008 in the sum of P13.8 million, inclusive of increments, broken down as follows: IT – P9.44 million; and VAT - P4.36 million.

Documents submitted and filed by investigators of Revenue District Office Nos. 49 (North Makati) and 44 (Taguig City & Pateros) showed that the abovementioned respondents were served the corresponding Letters of Authority (LOA), Preliminary Assessment Notices (PAN), Final Assessment Notices (FAN) and Formal Letters of Demand (FLD) with Details of Discrepancies but failed to protest said assessments, hence making the same final, executory, unappealable, and demandable.

The subsequent issuance of the Preliminary Collection Letter, Final Notice Before Seizure, and Warrant of Distraint and/or Levy were ignored by the respondents, as the said tax assessments remained unpaid. The respondents’ obstinate failure and continued refusal to pay the long overdue deficiency tax assessments, despite repeated demands, constitute willful failure to pay the taxes due to the government.

The cases against INTERACTIVE MOBILE AT EXTREMES SOLUTIONS COMPANY and EMERALD MULTI-RESOURCES & MANUFACTURING CORPORATION, together with their respective responsible corporate officers, are the 282nd and 283rd, respectively, filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. These are likewise RATE cases of Revenue Region No. 8, Makati City.

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On Q2 2014 GDP growth

Statement of Finance Secretary Cesar V. Purisima on Q2 2014 GDP growth


“The second quarter GDP growth of 6.4% demonstrates the increasing resiliency and diversity of the Philippine economy with varied sectors of the economy leading our growth.

“While consumption is the traditional driver of growth in the Philippines growing 5.3% this quarter, exports took the lead with a robust 10.3% growth. On the supply side, industry grew at 7.8%, of which manufacturing led with 10.8% growth, compensating for the slower growth in construction. Agriculture also grew at 3.6%, rebounding from its Q2 2013 contraction of -0.2%, and the previous quarter’s 0.9% growth.

“This is positive news for our country as the second quarter figure shows the potential of the Philippines to sustain inclusive economic development as new sectors of the economy begin to pick up speed. But, we can do better.

“We are confident the fundamentals of rapid growth are in place and some adjustments in government disbursements will bring growth to a higher path

.

“To realize our potential to grow even faster, President Aquino’s administration will continue to focus efforts on institutionalizing good governance reforms including but not limited to Fiscal Incentives Rationalization, Tax Incentives Monitoring and Transparency Act, shortening the Foreign Investments Negative List, and the Amendments to the Build Operate Transfer Law that will support our already successful Public Private Partnership program.

“For example, we recently signed into law the liberalization of banks to allow 100% foreign ownership. These are all steps in the right direction as we continue on the right path of increasing investments in infrastructure and in our people, thus addressing bottlenecks to our growth and realizing the full potential of the Philippines.

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Over 80% of applicants passed preliminary screening for Customs posts

Over 80% of applicants passed preliminary screening for Customs posts

 

The Bureau of Customs has released the names of about 5,000 applicants who passed the preliminary screening to fill 1,056 vacant positions at the Bureau’s main office and various collection districts throughout the country. The pre-screened applicants, comprising about 80% of 6,013 who submitted their application to the BOC, are required to take the general ability and competency exam to be administered by the Civil Service Commissioner (CSC) on August 31, 2014 (Sunday).

The general ability and competency exam was specially developed by the CSC for the BOC. The test will be administered by the CSC in three locations— in  Metro Manila for applicants from the National Capital Region (NCR) and Luzon; St. Theresa’s College in Cebu for those in the Visayas; and the University of Mindanao-Matina Campus in Davao for Mindanao applicants. Examinees must be at the testing centers at least one hour before the time of the examination which will begin at exactly 8:00am on August 31.

Many of the applicants who were disqualified either did not have or had the inappropriate civil service eligibility or professional license or credential from the Professional Regulation Commission, Philippine National Police or the Philippine Bar, under the Supreme Court. Other reasons for the disqualification include lack of required relevant working experience or training and failure to indicate choice of position or port/office being applied for and to provide work and training experience or information in the Personal Data Sheet. Several applicants were also disqualified outright for having relatives in the BOC up to the fourth degree of consanguinity. Employees vying for promotion but have been working in the Bureau for less than a year or are in their current positions for less than one year were also excluded.

Examinees that pass the first exam will be required to take aptitude and psychometric tests as well as specific exams to further test the qualification and fitness of applicants to perform the duties of the position they are applying for. These may include skill-based or physical fitness tests.

The list of pre-screened applicants who are required to take the test on August 31 are posted in the website of the Bureau of Customs www.customs.gov.ph; as well as the website and Facebook page of the Department of Finance. The list is also posted at the Collection District Offices of the Bureau of Customs nationwide.

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BOC, DTI WARN AGAINST PROLIFERATION OF SUBSTANDARD TILES, PLYWOOD

BOC, DTI WARN AGAINST PROLIFERATION OF SUBSTANDARD TILES, PLYWOOD

 

In violation of Customs rules, more than half of ceramic tiles and plywood imported into the Philippines in July 2014 may have been imported and released from Customs without the required clearances from the Bureau of Philippine Standards (BPS) of the Department of Trade and Industry (DTI). Further investigations are ongoing to establish the precise amounts, but there is sufficient evidence that the amounts already released are substantial.

Thus, the Bureau of Customs and Bureau of Philippine Standards warn the public to be vigilant when buying ceramic tiles and plywood. The consumer should look for the Philippine Standard (PS) Quality or Safety Certification Mark License/s; or Import Commodity Clearance/s (ICC) issued to manufacturers or importers, respectively. They should also ensure that the packaging or product has an authentic PS Mark or ICC sticker affixed on it.

Initial investigation shows that:

  1. Of the 66,493 tons of tiles imported in July 2014:
  • 26,226 tons (39% of the total) were released without BPS clearance
  • 14,704 tons (22% of the total) were cleared for release, and may have already been released, without BPS clearance
  • For another 22,818 tons (34% of the total) which were released or cleared for release, BPS is verifying whether the appropriate clearances were issued
  1. Of the 31,077 tons of plywood imported in July 2014
  • 7,566 tons (24% of the total) were released without the necessary BPS clearance
  • 13,843 tons (45% of the total) were cleared for release, and may have already been released, without the necessary BPS clearance
  • For another 8,271 tons (27% of the total) which were released or cleared for release, BPS is verifying whether the appropriate clearances were issued

To ensure the safety of Filipino consumers and prevent the repeat of such occurrences, measures will be put in place to monitor compliance by importers as well as Customs examiners and appraisers of all import permit and clearance requirements more closely. Such measures will include:

  • Regular sharing of data on regulated imports with import-regulating agencies such as BPS, to verify whether they issued permits on Customs-cleared shipments.
  • Investigations, and when appropriate, sanctions against Customs employees who cleared imports of regulated products without import permits.
  • Legal action against importers who imported products without required import permits.
  • Product recall and appropriate legal action by DTI against subject importers.
  • Conduct of information and educational campaign on PS and ICC Mark Schemes for all stakeholders

Most building and construction materials sold in the market are required to undergo the BPS Product Certification Scheme for product safety and reliability. These include steel pipes and bars; cement; ceramic tiles; equal-leg angle bars; flat glass; Polybutylene (PB) pipes; Polyethylene (PE) pipes; Unplasticized Polyvinyl Chloride (uPVC) pipes and rigid electrical conduit; plywood; rerolled steel bars; sanitary wares; steel sheets for roofing; as well as low-carbon steel wires. Furthermore, all manufacturers and importers of products covered under mandatory certification are required to apply for ICC or PS License, and to subject their products to tests based on the requirements of applicable Philippine National Standards (PNS) at the BPS Testing Center or any DTI-accredited laboratory prior to its distribution and sale.

The general public and permit-issuing agencies can also monitor the volumes of imports of all products, including regulated goods, through the regular monthly data releases of the Bureau of Customs, which can be viewed and downloaded from the Bureau of Customs website at http://customs.gov.ph/import-reports/.

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