BIR files charges vs toy firm, 3 MWSS executives for tax evasion

MANILA, Philippines - The Bureau of Internal Revenue has filed tax evasion charges against a toy company and three executives of the Metropolitan Water and Sewerage System (MWSS).

Charged before the Department of Justice are Wanly Toys International Corp. and its corporate officers – Imee Tan Yao (president), Haide J. Yao (corporate treasurer), and William C. Pan Jr. (CPA). The company has business address in Tondo, Manila.

In a statement, the BIR said it filed the complaint against the company “for willful attempt to evade or defeat payment of taxes, and deliberate failure to supply correct and accurate information after it was discovered to have deliberately and substantially underdeclared its income for taxable year 2008.”

According to documents from the BIR Reconciliation of Listings for Enforcement System, Wanly Toys allegedly made a total sales of P107,339,197.31 in 2008.

But if compared to its declaration in tax returns and accompanying financial statements, the company purportedly under-declared its income by 76.34 percent or by a total amount of P81,742,626.40.

The BIR stated that an underdeclaration of taxable income of more than 30 percent is considered as substantial underdeclaration and constitutes prima facie evidence of a false or fraudulent return under the Tax Code.

According to the BIR, the total deficiency tax liability of Wanly Toys for the said taxable period was P26,398,919.60, inclusive of all increments (Income Tax – P9,086,413.13; and Value-Added Tax – P17,312,506.47)

The BIR charged Pan for allegedly issuing an unqualified opinion in his certification of the financial statements of Wanly Toys for taxable year 2008 despite the latter’s underdeclaration of its reported revenues/income.

The case against Wanly Toys and its responsible corporate officers is the 21st filed under the Run After Tax Evaders program of the BIR under Commissioner Kim S. Jacinto-Henares.

The BIR identified the three MWSS officials as Oscar I. Garcia, Ferdinand P. Mahusay and Lorenzo S. Sulaik, all member of the MWSS’ governing board of the corporate and regulatory offices.

The charges were filed before the Department of Justice after separate investigations conducted by the BIR based on findings by the Senate committee on finance that some GOCC and GFI executives had excessive salaries and unwarranted bonuses and allowances.

BIR commissioner Kim S. Jacinto-Henares ordered the Run After Tax evaders team to file the criminal complaints for tax evasion over the three executives’ alleged deliberate and repeated non-declaration of revenues or income they earned in various years and their purported consequent failure to pay the income taxes due thereon.

“The BIR discovered that Messrs. Garcia, Mahusay and Sulaik concealed their true income by their deliberate and willful failure to file their income tax returns for the taxable years in question, thus resulting in the non-payment of taxes due thereon,” the bureau said in a statement.