The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against LORENZA DAVID HUANG (HUANG) for Willful Attempt to Evade or Defeat Tax, and Deliberate Failure to Supply Correct and Accurate Information in her Income Tax Returns for taxable years 2009 and 2010, all in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).
HUANG is an active insurance advisor, licensed mutual fund representative and authorized distributor of various products of insurance. Her registered address is at 19 Don Antonio, Villa Beatriz, Holy Spirit, Quezon City.
In the course of investigation, access letters were prepared and sent to various companies requesting for certifications as to income payments made by them to HUANG. Replies to said access letters showed that HUANG received income payments ofP11,467,966.87 & P93,199.74 in 2009, P15,790,345.47 & P406,775.76 in 2010 and P19,638.03 & P411,039.29 in 2011.
HUANG’s tax returns for taxable year 2009 and 2010 were secured by investigators. After evaluation and comparison of documents and information at hand, the BIR discovered that HUANG deliberately failed to supply correct and accurate information in her annual income tax return for taxable years 2009 and 2010.
HUANG received a total income payment of P11.56 million in 2009 but only declared a gross income of P3.92 million with the BIR for the same year, thus grossly underdeclaring her reported gross income by P7.64 million or 194.62%. For 2010, she received a total income payment of P16.20 million but only declared a gross income of P4.05 million with the BIR, thereby substantially underdeclaring her reported gross income by P12.15 million or 300.33%.
Under Section 248(B) of the Tax Code, an underdeclaration of taxable income by more than 30% constitutes a prima facie case of fraud tantamount to tax evasion.
The estimated aggregate tax liabilities of HUANG amounted to P13.13 million for deficiency income tax covering taxable years 2009 and 2010, inclusive of surcharges & interests.
The case against LORENZA DAVID HUANG is the 179th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.
Tax Watch: DOF Uses Statistics to Reveal Tax Anomalies
Finance Chief: Tax Evaders “Cannot Hide” From Henares
Broadening the tax base has always been a goal of Secretary of Finance Cesar V. Purisima. The finance chief however stressed the need to monitor statistics specific to different taxpaying groups.
“As part of our tax watch campaign to increase transparency in tax payments and ask our citizenry to be conscientious in paying the right taxes, we will be regularly revealing insights about payments from taxpayers in various classifications,” Purisima said.
“We want to raise awareness about tax payments and ask the public if the numbers we observe make sense.”
While the Bureau of Internal Revenue notched a 7-percent year-on-year increase in the number of income tax filers from 2011 to 2012, Purisima also highlighted a number of examples from analyses of BIR collections that signified areas for improvement and increased vigilance.
Purisima noted the anomalous nature of the tax base of pawnshops to illustrate the need for reconciled statistics.
“Why is it that we have 5,230 pawnshops that paid in 2012, but the BSP supervises 6,301? The average tax payment for pawnshops also went down from P363,085 in 2011 to P315,812 in 2012,” Purisima said.
The finance secretary noted that questionable tax statistics could be found all over the Philippines, especially in some of its popular tourist traps.
“In Binondo, based on BIR records, there are only 120 registered restaurants. The interesting thing is, the average tax they paid in 2012 was P156,780, which is actually a decrease from 2010 of P222,000,” Purisima said, referring to the crowded home of popular Chinatown eateries.
“This average is lower than the average tax payment of restaurants in Baguio, Tarlac, Legaspi City, and the Cordillera Administrative Region. Is that right?”
“In Palawan, we only have 47 restaurants that paid taxes, and those restaurants paid P353,000 on average. But data from DOT says that Palawan arrivals have increased dramatically since the Underground River was registered as one of the seven natural wonders of the world,” Purisima added.
The Finance Secretary also pointed out that while the BIR has managed an impressive performance in collection of income taxes, collections of value-added tax (VAT) lagged.
“Between 2009 and 2012, income tax collection from corporations increased by 46%. Income tax from wage-earners increased by 63%. VAT collection only increased by 19% over that period, so there is much room for improvement on VAT,” added the finance chief.
Statistical analysis has also revealed promising results from the implementation of the recently passed Sin Tax Law.
“Excise tax collections from ‘sin’ products from January to May of 2013 are up 32%, despite the fifty percent drop in tobacco removals,” Purisima said.
Purisima left with words of advice for those who persisted in their efforts to evade tax collection.
“You can run, but you cannot hide from Commissioner Henares.”
Biazon Welcomes DOF’s Proposed Organizational Reform
Customs Commissioner Ruffy Biazon welcomed the Department of Finance (DOF) proposal to transfer the Bureau of Customs’ (BOC) accreditation and post entry audit functions to the Bureau of Internal Revenue (BIR).
In a briefing with the Customs media today (August 5, 2013), Biazon said, while he is generally happy with the performance of the BOC’s Post Entry Audit Group (PEAG) when its revenues of over PhP 400 million in 2011 jumped to over PhP 700 million in 2013, he has no objection to the DOF proposal to transfer PEAG’s function to the BIR.
“This will definitely be a big help for the BOC as the BIR does not only have more trained people in audit and taxation, but they also have more stringent audit procedures.” Biazon said, adding that, “However, there are considerations that we need to iron-out with the BIR before the DOF proposal could be a reality, like the valuation and classification issue on importations.”
According to Biazon, the function of PEAG is to elevate the level of compliance by importers to customs rules and procedures. As such, PEAG’s role is not only about collecting the right duties on importations, but also its compliance to world customs rules and procedures in the area of classification and valuation.
“These are customs functions that will have to be addressed first before PEAG could be transferred to the BIR. And this compliance involves proper valuation and classification of importations, in accordance with the Tariffs and Customs Code of the Philippines (TCCP) and World Customs Organizations (WCO) practices.” Biazon said.
Biazon also said, the DOF proposal to transfer the BOC’s accreditation function to the BIR will help unburden the BOC of its task of seeing to it that all importers are legitimate. Prior to Biazon’s assumption as Customs Chief, the BOC’s Interim Customs Accreditation and Registration (ICARE) was one of the problematic units of the bureau. However, with Biazon’s reorganization of ICARE, fictitious companies earlier registered by ICARE were delisted.
“The BIR would be the best agency to determine the legitimacy of companies as they have extensive records and more comprehensive procedures in verifying the real existence of companies.” Biazon said.
According to Biazon, the BOC is now in the midst of several reform programs, in compliance with President Simeon Benigno Aquino III’s order to clean the BOC of misfits, curb smuggling and generate more revenues.
“The DOF proposal is, therefore, a welcome move which we hope to seriously explore and discuss its implementing rules and guidelines.” Biazon said.
MB places Rural Bank of San Jose Del Monte, Inc.
under PDIC receivership
All valid insured deposit claims will be paid
The Monetary Board (MB) placed the Rural Bank of San Jose Del Monte, Inc. under the receivership of the Philippine Deposit Insurance Corporation (PDIC) by virtue of MB Resolution No. 1254 dated August 1, 2013. As Receiver, PDIC took over the bank on August 2, 2013.
Rural Bank of San Jose Del Monte is a four-unit bank with Head Office located at 204 Quirino Highway, Tungkong Mangga, San Jose del Monte City, Bulacan. Its three branches are in Apalit, Pampanga; and in Meycuayan and Sapang Palay, Bulacan. Latest available records show that as of June 30, 2013, Rural Bank of San Jose Del Monte had 3,917 accounts with total deposit liabilities of P367.7 million. A total of 3,855 deposit accounts or 98.4% of the accounts have balances of P500,000 or less and fully covered by deposit insurance. Total insured deposits amounted to P334.1 million or 90.9% of the total deposits.
PDIC said that upon takeover, all bank records shall be gathered, verified and validated. The state deposit insurer assured depositors that all valid deposits shall be paid up to the maximum deposit insurance coverage of P500,000.00.
The PDIC also announced that it will conduct a Depositors-Borrowers Forum on August 6-8, 2013 to inform depositors of the requirements and procedures for filing deposit insurance claims. Claim forms will be distributed during the Forum. The schedule and venue of the Forum will be posted in the bank premises and in the PDIC website, www.pdic.gov.ph. The claim forms and the requirements and procedures for filing are likewise available for downloading from the PDIC website.
Depositors may update their addresses with the PDIC representatives at the bank premises or during the Forum using the Mailing Address Update Forms to be furnished by PDIC representatives. Duly accomplished Mailing Address Update Forms should be submitted to PDIC representatives accompanied by a photo-bearing ID of the depositor with signature. Depositors may update their addresses until August 12, 2013.
Depositors with valid deposit accounts with balances of P15,000.00 and below need not file deposit insurance claims. But depositors who have outstanding obligations with the Rural Bank of San Jose Del Monte including co-makers of the obligations, and have incomplete and/or have not updated their addresses with the bank, regardless of amount, should file deposit insurance claims.
For depositors that need not file deposit insurance claims, PDIC targets to start mailing payments to these depositors at their addresses recorded in the bank by the 3 rd week of August 2013.
For depositors that are required to file deposit insurance claims, the PDIC targets to start claims settlement operations for these accounts by the 4 th week of August 2013. The schedule of the claims settlement operations will be announced through notices to be posted in the bank premises and other public places as well as through the PDIC website,www.pdic.gov.ph.
According to the latest Bank Information Sheet (BIS) as of June 30, 2013 filed by the Rural Bank of San Jose Del Monte with the PDIC, the bank is majority-owned by the Heirs of Reuben M. Protacio (38%), Mario M. Leygo (17.5%) and Wilfredo R. Olaguer (17.5%). Its Chairman and President is Wilfredo R. Olaguer.
For more information, depositors may communicate with PDIC Public Assistance personnel stationed at the bank premises. They may also call the PDIC Toll Free Hotline at 1-800-1-888-PDIC(7342), the PDIC Public Assistance Hotlines at (02) 841-4630 to (02) 841-4631, or send their e-mail to firstname.lastname@example.org.
Statement of Finance Secretary CESAR V. PURISIMA on the change of the Philippine Rating Outlook to “Positive” from “Stable” by R&I, Inc.
Statement of Finance Secretary CESAR V. PURISIMA
on the change of the Philippine Rating Outlook
to “Positive” from “Stable” by R&I, Inc.
“It is with great pride that I learned today that Ratings and Investment Information, Inc., changed the Philippine Rating Outlook to ‘Positive’ from ‘Stable’ while affirming our investment grade rating of BBB-. The gains of good governance are again recognized by those who monitor world economies, with our tax collection reforms and our landmark sin tax reform law contributing greatly to the positive outlook.
“I commend R&I for noting not just the prudent fiscal management we have implemented under President Aquino, but the great strides we have taken towards lasting peace in Mindanao. With the recent signing of the wealth sharing annex to the Framework Agreement on the Bangsamoro, we have come closer to enshrining perpetual inclusive growth in law for all Filipinos.
“I thank R&I for this timely and balanced evaluation of the Philippines.