Maker of ‘Popemobile’ charged with tax evasion

Tax evasion charges were filed yesterday before the Department of Justice (DOJ) against the makers of the bulletproof "Popemobile" used by Pope John Paul II during World Youth Day celebrations in Manila in January 1995.

The Bureau of Internal Revenue (BIR) lodged the complaint against the two top officials of Italcar Pilipinas who are also owners of Francisco Motors Corp. (FMC), which assembled the vehicle, and the comptroller of Italcar.

BIR Commissioner Guillermo Parayno Jr. said Italcar Pilipinas, a wholly owned subsidiary of FMC, is engaged in the importation and sale of motor vehicles.

Charged were Fernando Francisco, managing director, president and chairman of Italcar Pilipinas; Jorge Francisco, Italcar vice president and treasurer; and Italcar comptroller Antonio Caringal.

"The Francisco brothers along with Caringal also under-declared their income and they failed to withhold taxes on income payments," Parayno said, adding that the trio made an overstatement of deductions for the taxable year of 1999.

He said FMC built the "Popemobile," which was equipped with a see-through, bulletproof glass box to provide security to the Pontiff.

The unusual security measure was taken after Pope John Paul II was wounded in an assassination attempt in 1981.

The company, Parayno said, began building its fortune in the automotive industry by assembling passenger jeepneys, a common public transport in the country.

In the same complaint, the BIR chief also charged Renato Herrera, a herbalist who formulated the Glo Herbal powders, for non-filing of income tax returns covering the year 2001 to 2003.

Parayno said Herrera, whose products sold in the millions, also illegally acquired a second tax identification number.

And based on the BIR’s assessment, he said the herbalist has a P150-million deficiency in terms of taxes for the year 2001 alone.

"The charges against the Franciscos, Caringal and Herrera was part of the Run After Tax Evaders, or RATE (operation of the BIR) to underscore the seriousness of our continuing campaign against tax evaders," Parayno said.

The DOJ and the BIR have been playing up tax evasion cases in the last two months as part of its intensified tax generation campaign, filing charges against prominent individuals caught violating tax laws.

Parayno stressed that tax evasion is a crime and those who do not pay taxes "must be punished because they take away from the government and our people vital resources for economic recovery and national development."

On the average, the government loses about P80 billion to tax cheats each year, BIR chief noted.

"The National Tax Research Center has estimated an annual average loss of more than P26 billion from tax evasion by businessmen and professionals alone. In addition, more than P54 billion are lost to corporate tax evaders," Parayno said.

The tax gap, which drains the nation’s coffers of badly needed resources, is likely to result in leakage in the present income tax system, he warned.

"Many individual taxpayers do not report second- or third-employment incomes. Others file fictitious claims of personal and additional exemptions, under-declare business or professional income and overstate expenses. Some do not file (income tax) returns at all, do not remit withheld taxes or abuse tax exemptions and incentives," Parayno said.

He vowed there would be no letup in the BIR’s pressure on tax evaders.

"Tax evaders must realize that operation RATE is real and that sooner or later, we will get to them. Media organizations have started forming alliances with us to promote our continuing campaign against tax evasion," he said.

As part of the BIR’s integrated campaign to promote responsible tax payment, Parayno said the BIR is running a series of print advertisements offering rewards of up to P1 million for information that would lead to the recovery of uncollected taxes and prosecution of tax evaders.

He said he also issued the implementing guidelines on the RATE operation’s reward system. A hotline is also ready to take calls on tax evasion incidents.

"Informers can call the BIR’s national investigation division at 926-5449 and 922-4751," Parayno said.