Biggest catch: BIR files P5.5-billion tax evasion case vs trader

MANILA, Philippines - A businessman was charged with tax evasion before the Department of Justice for allegedly using three different tax identification numbers (TIN) to defraud the government of some P5.5 billion in taxes.

Internal Revenue Commissioner Kim Henares said Macario Gaw Jr. violated the National Internal Revenue Code when he used three different TINs in filing his income tax returns in 2007 and 2008.

“That shows there was a real intent to mask the activity as capital gains when actually it’s an ordinary asset,” he said.

Henares said BIR records show Gaw bought 10 parcels of land in 2007 for P4 billion and sold them for P8 billion, and instead of classifying the sale as an ordinary asset sale, he declared the transaction as capital asset sale and paid lower amount of taxes.

“He paid only six-percent Capital Gains Tax amounting to P9 million in 2007 and P418 million in 2008 to evade payment of the 32-percent income tax and 12-percent VAT due to sale of lands classified as ordinary assets,” she said.

Henares said Gaw should have paid P5.5 billion in taxes for the sale of the lots.

“We are assessing him and he should pay,” she said.

“The tax liability is addressed if he pays. But the criminal liability stays.”

Finance Secretary Cesar Purisima said the complaint against Gaw is the biggest case filed so far under the RATE (Run After Tax Evaders) program.

Tax collection remains a serious concern of the government, he added.

Purisima said the government has lost an estimated $5 billion in unpaid taxes.

“We only have 12.8 percent or about three percent less,” he said.

“This translates to about $5 billion.”