BIR files suit vs Benguet power cooperative

MANILA, Philippines - The Bureau of Internal Revenue (BIR) has filed charges against an electric cooperative in Benguet and an owner of a photo store for tax evasion.

In a filing before the Department of Justice (DOJ) yesterday, the BIR filed a criminal complaint for tax evasion against Michael Chan, the registered sole proprietor of New Canary Photo in Cubao, Quezon City and the Benguet Electric Cooperative (Beneco).

According to the BIR, Chan “willfully attempted to evade or defeat tax and deliberately failed to supply correct and accurate information in his income tax returns from 2008 to 2009.”

The BIR said that for 2008 and 2009, Chan earned P165 million in 2008 and P156.56 million in 2009.

“Despite earning such taxable income, he only declared in his income tax returns (ITR) P103.58 million for 2008 and P55.23 million for 2009, thus grossly underdeclaring his sales by P61.47 million or 59.34 percent and P101.33 million or 183.46 percent in 2008 and 2009, respectively,” the BIR said.

Meanwhile, the BIR also filed tax evasion charges against Beneco for failing to pay the right amount of taxes and providing proper information on withholding tax return and documentary stamp tax payments.

Beneco is an electric cooperative based in La Trinidad, Benguet.

According to the BIR, Beneco purchased from Equitable PCI Bank which is now known as Banco De Oro Unibank two parcels of land in December 2009. However, the BIR said Beneco underdeclared the amount of the land.

Third-party information gathered by the BIR showed that the selling price of the property is P183.45 million and not P85 million.

“Investigation showed that after determining the actual consideration of the sale and after deducting the taxes previously paid, the estimated aggregate tax liability of Beneco related to the subject sale transaction is P14.59 million, inclusive of surcharges and interests, broken down into creditable withholding tax of P11.67 million and documentary stamp tax of P2.92 million,” the BIR said.