Ex-MWSS board member faces tax evasion rap

by Ina Reformina, ABS-CBN News

Posted at Jul 22 2011 02:15 AM | Updated as of Jul 22 2011 06:59 PM

MANILA, Philippines - A former board member of the Metropolitan Waterworks and Sewerage System (MWSS) has been recommended to be charged in court for failure to file his income tax returns (ITR) for 2 consecutive years, but got away with being charged with attempt to evade or defeat tax.

Lorenzo Sulaik, charged by the Bureau of Internal Revenue (BIR) in December of last year for violations of Sections 254 and 255 of the National Internal Revenue Code (NIRC), will end up being charged in court for violation of just the latter.

In a 7-page resolution dated June 1, 2011 but made available just recently, Assistant State Prosecutor Juan Pedro Navera, who conducted the preliminary investigation on the complaint, recommended the filing of 2 separate informations against Sulaik in court for failure to file his ITRs in 2008 and 2009 in spite of earning nearly P8-million for the 2 consecutive years as a member of the board of corporate and regulation offices of the MWSS.

The BIR said Sulaik earned P3.21 million in 2008 and P4.51 million in 2009.
 
Navera said that the BIR's allegation that Sulaik also violated Sec. 254 of the NIRC, or the attempt to evade or defeat taxes, should be dismissed because the facts presented to support the charge “are still the same facts arising from the failure to file income tax returns for taxable years 2008 and 2009.”

“[W]e find the charge for violation of Section 254 lacking in probable cause and thus, must be dismissed,” Navera said.

In its complaint, which also listed as respondents other MWSS board members Oscar Garcia and Ferdinand Mahusay, brother of Jose Pidal scandal whistleblower Udong Mahusay, the BIR claimed Sulaik should be charged in court for his “deliberate” failure to file his ITRs in 2008 and 2009 and "failure to file the taxes due despite knowledge of his obligation to do so.”

The BIR pegged Sulaik's aggregate tax liability at P4.05-million, inclusive of surcharges and interest.

During the preliminary investigation on the complaint, Sulaik argued that the BIR should be running after the MWSS and its officers whom, he said, were the ones responsible for computing, withholding and remitting his taxes.

He said that his income from the MWSS were “fringe benefits to which taxes are due from the employer.”

Sulaik eventually filed his ITRs for 2008 and 2009 on Nov. 26, 2010.

Navera, in his resolution, said the late filing of returns “sets a dangerous precedent, where a taxpayer can renege on his obligation to file the required returns and not pay his tax liabilities and just wait for the letter of authority, if any, and just subsequently file his ITRs.”

Navera's recommendations were approved by Senior Deputy State Prosecutor Manuel Gudio, Jr. and Prosecutor General Claro Arellano.