First case: Tax evader faces arrest, imprisonment

MANILA, Philippines - The Bureau of Internal Revenue (BIR) has sought the arrest of businesswoman Gloria Kintanar, a distributor of Forever Living products, who was found guilty of tax evasion charges by the Court of Tax Appeals (CTA) and the Supreme Court (SC).

Kintanar, who had unpaid taxes worth P6.3 million, would be the first person in the country’s history to be jailed for tax evasion.

In an Omnibus Motion filed with the CTA, the BIR sought the issuance of a writ of execution for the collection of the taxes as well as a warrant of arrest and a hold departure order against Kintanar.

The SC’s Third Division affirmed last January an earlier ruling by the CTA that found Kintanar guilty of violating two counts of Section 255 of the National Internal Revenue Code.

The SC affirmed the CTA’s ruling which sentenced Kintanar from two to four years in prison, a fine of P20,000 and the payment of her back taxes.

The CTA earlier set a hearing last March 16 for the BIR’s Omnibus Motion but the hearing was cancelled and instead Kintanar was given 10 days to comment on the tax agency’s motion.

BIR Commissioner Kim Henares said the Kintanar tax evasion case is a landmark case because the SC upheld the CTA’s doctrine on “willful blindness.”

The doctrine means that individuals or corporations are accountable for errors on their tax returns and can no longer say that these errors are the fault of their accountants.

“The only thing that needs to be shown is that she is aware of her obligation to file annual income tax returns but she nevertheless, voluntarily, knowingly and intentionally failed to file the required returns,” the CTA said.

Henares said the affirmation of the “willful blindness” doctrine will now make it easier for the BIR to prosecute tax evasion cases, as delinquent taxpayers could no longer pass on the blame to their accountants or the people they hire to prepare their tax returns.

The case against Kintanar goes as far back as 2005 after she failed to file her income tax return for 2000 and 2001.

The BIR said Kintanar earned substantial income as independent contractor of Forever Living products but has not been paying taxes.

The case against Kintanar is among the first tax evasion cases to have reached the SC and decided with finality.

The bureau continues to file cases against tax evaders under its Run After the Tax Evaders (RATE) program as part of efforts to raise revenues.

This year, the BIR is tasked to collect P1.066 trillion.