BIR Commissioner Jose Mario Buñag said Jaime Torres, owner of the St. James College with branches in Quezon City, Parañaque City and Calamba, Laguna, has failed to remit P48.9 million in taxes to the government.
The BIR denied Torres’ claims that he correctly filed his income tax return for the year 2000.
Buñag said their investigation revealed Torres wrongly declared his own taxable income since he filed it under the SJCS (St. James College System).
The BIR also found out that Torres also sits as the president of Jaime T. Torres Educational Foundation Inc. (TEFI).
TEFI became the lessee-operator of the St. James school system based on a lease-agreement between the two firms.
The agreement stated the amount of P20 million as lease will be payable in a year in advance upon the signing of the contract with an increase of 10 percent a year for a term of 10 years.
The BIR said Torres’ income tax return for 2000 showed that he did not declare his income arising from the lease agreement of his properties.
To make matters worse, Torres claimed exemption from payments of taxes by invoking the Tax Code provisions on non-profit educational institutions.
The BIR claimed there is substantial underdeclaration of income on the part of Torres constituting prima facie evidence of false or fraudulent return under the Tax Code.
Buñag pointed out Torres did not declare the amount equivalent to 100 percent of the lease income of P20 million in 1998.
Likewise, Torres failed to declare P22 million in 1999, P24.2 million in 2000 and P26.62 million in 2001 on his filed returns, Buñag said.
Buñag explained that Torres deliberately withheld the correct amount of taxes due him.
Buñag said Torres "willfully failed" to account, as part of his own personal income, for the lease income he received from the foundation.
Torres also tried to disguise his taxable income under the supposed exemption he had claimed when BIR investigators made the timely discovery, Buñag said.
"Once again, the BIR-DOF (Department of Finance) alliance has produced another achievement in effecting the RATE (Run After Tax Evaders) program," Buñag said.
"This demonstrates clearly our determination to flush out all businessmen who resort to all means of tax dodging which we can never allow," he said.
Buñag said Torres’ continued and unjustified refusal to give access to his books of accounts forced the BIR to file a complaint with a pending warrant for his arrest.
He said the assessment of Torres’ tax liability was based on the "best evidence obtainable" based on the National Internal Revenue Code (NIRC).
The BIR’s detailed computation of Torres’ tax liability for taxable years 2000 and 2001 revealed a total tax liability of P48,900,631.87 consisting of deficiency income tax and VAT from 2000 to 2001. — With Jose Rodel Clapano