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Businessman ordered arrested over P5.5-B tax evasion case

Posted on October 31, 2011 10:58:09 PM [ BusinessWorld Online ]

A BUSINESSMAN has been ordered arrested over tax evasion charges filed by the Bureau of Internal Revenue (BIR), with the warrant to be served by the National Bureau of Investigation (NBI).

In a resolution dated Oct. 19 and released by the BIR yesterday, the first division of the Court of Tax Appeals has issued an arrest warrant against businessman Macario L. Gaw, Jr. with a P120,000 bail bond. The businessman has a total tax deficiency of P5.5 billion for the period 2007-2008.

“The court, after due deliberation, finds the existence of probable cause for the issuance of warrant of arrest against the accused in these consolidated criminal cases,” the resolution read.

In a telephone interview, BIR Commissioner Kim S. Jacinto-Henares said that the arrest warrant will be sent by the court sheriff to the Department of Justice (DoJ), which will order the NBI to serve the order.

Justice Secretary Leila M. de Lima has assured that the warrant will be served, added the BIR chief.

“Yes, she has assured us of the implementation of the warrant. In fact, she was the one who ordered it,” Ms. Henares said, referring to Ms. de Lima.

For her part, Ms. de Lima, in a text message, said she has instructed Prosecutor General Claro A. Arellano to obtain a copy of the arrest warrant and hand it over to the NBI for implementation.

In August last year, the BIR filed tax evasion charges against Mr. Gaw for failing to pay the correct income taxes for 2007 and 2008. He also did not indicate correct information in income tax returns and failed to file value-added tax (VAT) returns for 2008.

The BIR said Mr. Gaw, president of Mega Packaging Corp. and Macro Liquefied Petroleum Gas Co., has tax deficiency broken down as P1.3-billion basic income tax, P1 billion as basic VAT and the rest in interest and surcharges.

The case stemmed from Mr. Gaw’s purchase of 10 parcels of land in 2007 and 2008 worth P4.12 billion that were later on sold for P8.42 billion. The lots were declared as capital assets with Mr. Gaw paying only 6% of the capital gains tax worth P9.11 million for 2007 and P418.75 million in 2008. If the lots were declared ordinary assets, these could have been subjected to 32% income tax and 12% VAT.

The BIR claimed that Mr. Gaw used multiple Tax Identification Numbers, making it harder to track the violations.

The DoJ has found probable cause and ordered the filing of charges against Mr. Gaw at the Court of Tax Appeals (CTA) in March.

Last week, the CTA’s second division ordered the arrest of spouses Jacinto C. Ligot and Erlinda Yambao Ligot over tax evasion charges also filed by the BIR.

The retired general was former military comptroller and was named in a plunder case at the Office of the Ombudsman. A plea bargain between him and the Ombudsman has been approved by the Sandiganbayan but its implementation was withheld. -- Nathaniel R. Melican
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BIR to investigate banks on estate tax

    Published : Monday, October 17, 2011 00:00 [ manilatimes.net ]
    Written by : KATRINA MENNEN A. VALDEZ

THE Bureau of Internal Revenue vowed to put an end to the “collusion” between banks and heirs of the deceased in eroding estate tax collection.

Deputy Commissioner Estela Sales, who heads the legal and inspection group, told reporters that the agency has intensified its review on the mode of transfer of properties to individuals, particularly whether such transfer is acquired through donation inter vivos or as an inheritance.

”We want to determine whether there are badges of fraud as to the transfer of properties which is being done to avoid payment of higher taxes, which is the estate tax,” Sales said.

“There are suspicions and if we are able to prove such fraud then the transfer can be nullified pending the payment of the proper tax due plus criminal liability on the part of the taxpayer and the bank itself,” she said.

Finance Secretary Cesar Purisima earlier said the estate tax is one of the most problematic areas as far as tax administration is concerned given the substantial number of people who die every year. In 2010, the government raised merely P1.34 billion in estate taxes out of the P822.6 billion in total taxes collected. In 2009, the BIR realized P915 million from the estate tax. Claro Ortiz, BIR head revenue executive assistant and overall coordinator for Run After Tax Evaders, said banks will be equally held criminally liable as that of the erring heir should the collusion be proven. ”Its a common secret that a number of banks actually allow the heirs of their [deceased] depositors to withdraw or transfer money despite knowledge that a depositor has indeed already expired,” he said.

”The BIR aims to put an end on that practice by going after not only the heirs but as well as the banks who consented the same,” he added.
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KNOWING YOUR BIR REGULATIONS AND ISSUANCES

Revenue Regulations (RRs)
are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes

Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.

Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio

Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.

Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.

BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.