Porsche dealer pays P1 B in taxes

MANILA, Philippines - PGA Cars, Inc., the sole distributor of Porsche and Audi vehicles in the Philippines, has settled some P1 billion in contested taxes and penalties the firm owed the Bureau of Internal Revenue (BIR) and escaped what could have been a huge tax evasion case.

PGA Cars is part of the Coyiuto Group of Companies owned by businessman Robert Coyiuto Jr., who was ranked 19th in a June 2011 list of Forbes magazine’s Top 40 Richest Filipinos with a net worth of $400 million.

BIR sources told The STAR that if the company did not pay the P1 billion by the start of the year, it would have been the subject of the first tax evasion case to be filed by the BIR for 2012 under its Run After Tax Evaders (RATE) program.

“They already paid,” one source said.

At least three sources in the bureau who are privy to the matter confirmed that PGA Cars owed the bureau roughly P1 billion in alleged back taxes from 2007 to 2010. A source close to the Coyiutos said that the amount comprises “contested tax assessment and not back taxes.”

The amount includes excise taxes slapped on the luxury vehicles distributed by PGA Cars, the Audi and the Porsche.

According to the National Internal Revenue Code (NIRC), the excise tax rate on luxury cars is as follows:

If the net importer’s selling price is over P600,000 to P1.1 million, the excise tax is P12,000 plus 20 percent of value in excess of P600,000; over P1.1 million to P2.1 million, the excise tax is P112,000 plus 40 percent of value in excess of P1.1 million; and for over P2.1 million, the excise tax is P512,000 plus 60 percent of value in excess of P2.1 million.

BIR Commissioner Kim Henares neither confirmed nor denied the matter, saying that investigations conducted by the BIR on tax matters of companies are confidential.

Henares said the agency does not discriminate in its campaign against tax evaders.

“In our campaign, we do not discriminate against anyone. We just want to make sure that individuals and companies are paying the right taxes,” Henares said.

The STAR repeatedly tried to get Coyiuto’s side on the matter but he was not available for comment as of press time.

PGA Cars remains one of the country’s prominent and popular luxury car distributors.

In published articles, Coyiuto has been quoted as saying that in 2010 sales of Porsche increased by 42 percent because of the awards earned by the brand, while Audi sales increased by 94 percent from the 2009 levels.

The BIR has been filing every other week cases before the Justice department against alleged tax evaders.

Marking its first RATE case for 2012, the BIR filed before the Department of Justice (DOJ) a case against Basement Salon Corp., owned by Fritz and Katherine Webb, children of former senator Freddie Webb.

The BIR said Basement Salon did not issue receipts to its customers.

As of November 2011, data from the BIR showed that the agency has filed 79 tax evasion cases before the DOJ since Henares took over the agency in July 2010.

Of the 79 tax evasion cases, 63 are pending with the Justice department while 19 have already been resolved.

Of the 19 cases resolved by the department, the DOJ ruled in favor of the BIR in at least 16 cases and against the agency in the others.

The 79 tax evasion cases have total claims of P31.836 billion.