Businessman facing P5.5-B tax evasion case

ABS-CBN News

Posted at Aug 26 2010 02:03 PM | Updated as of Aug 26 2010 10:14 PM

MANILA, Philippines - The Bureau of Internal Revenue (BIR) has filed tax evasion charges against a businessman for failing to pay P5.5 billion in taxes.

Facing the complaint is Macario Lim Gaw, who allegedly entered wrong information in his 2007 and 2008 income tax returns, and failed to file value-added tax (VAT) returns for taxable year 2008. Gaw is president of packaging firm Mega Packing Corp. and liquefied gas petroleum supplier Macro LPG Co.

Finance Secretary Cesar Purisima said the case was by far the biggest filed under the BIR's Run After Tax Evaders or RATE program, which aims to clamp down on tax cheats to boost government revenues.

Purisima said Gaw used multiple tax identification numbers, a criminal offense under Section 275 of the National Internal Revenue Code.

"This made it so difficult for the bureau to discover the scheme," Purisima said.

BIR Commissioner Kim Henares said Gaw bought 10 lots in the Marina area and sold these to a subsidiary of a firm involved in the PAGCOR City project in 2007.

The lots were bought for approximately P4 billion, and subsequently sold for P8 billion or double the total purchase price.

But instead of classifying the lots as ordinary assets, Gaw declared them as capital assets, allowing him to pay only the 6% capital gains tax upon sale.

Henares said Gaw evaded payment of the 32% income tax and 12% VAT on sale of ordinary assets.

The BIR is compelling Gaw to pay P5.5 billion in back taxes. The businessman is also facing criminal charges.

The BIR has so far filed 5 tax evasion cases before the DoJ since July in line with the Aquino administration's promise to run after tax evaders and smugglers. - Report from Ina Reformina, ABS-CBN News