The Bureau of Internal Revenue (BIR) and the Department of Finance filed complaints against Nitoka Industrial Corp. and Chiat Sing Cardboard Corp., both manufacturing companies owned by Filipino-Chinese businessmen.
Named as respondents were Nitoka president Thelma U. Lee, vice president Daniel U. Lee, treasurer Samuel Lee and Maybelle Lim, treasurer and assistant secretary.
Also charged were Chiat Sing president Sze Kou and treasurer Taneda Sze.
According to Finance Undersecretary Emmanuel Bonoan, Nitoka was in the business of manufacturing, assembling, reconditioning and dealing in industrial sewing machines, equipment and machinery.
"Nitoka’s deficiency income tax, including penalties and legal increments, amounted to P8.7 million in 2002 and P9.3 million in 2003," Bonoan said.
Bonoan said that from the audit report of the BIR, it was discovered that Nitoka had importations totaling more than P451 million in 2002 and more than P541 million in 2003.
Considering the size of its importation, Bonoan said Nitoka should have generated income in its normal course of doing business.
"Nitoka not only failed to file its income tax returns in two successive years, it also failed to file the necessary withholding tax returns and value-added tax returns," he said.
Chiat Sing, on the other hand, is engaged in the manufacture, importing, exporting and wholesale trading of cardboard, paperboard, corrugated carton containers and other allied products.
Bonoan said Chiat Sing had under-declared its income in the amount of P10.6 million in 1999 and P5.7 million in 2000 from its under-declared importation of raw materials and under-declared sales of P160 million in 1999 and P113 million in 2000.
"Chiat Sing actually sought relief from tax assessment through BIR’s voluntary assessment program (VAP)," Bonoan said. The program grants taxpayers the privilege of being given the last priority in the audit and investigation for erroneous payment of tax liabilities up to Dec. 31, 2000.
According to Bonoan, Chiat Sing availed itself of the VAP covering the taxable years 1999 and 2000. However, he said the VAP only stops the audit but does not waive the accruing tax payments.