“This latest victory is a result of the continuing and intensified joint effort of the BIR and the DOJ upon the direct instructions of Internal Revenue Commissioner Joel Tan-Torres to coordinate with the National Bureau of Investigation (NBI) and the Criminal Investigation and Detection Group (CIDG) in the surveillance, investigation and prosecution of tax evasion cases to reinvigorate the RATE program,” Cabantac said.

The Bureau of Internal Revenue’s (BIR) Run After Tax Evader’s (RATE) Program won another round in tax evasion charges it previously filed against the Taiwanese owners of a garments company operating at the Cavite Special Economic Zone in Rosario, Cavite for failing to pay Php10.5 million in taxes.

BIR Deputy Commissioner for Legal and Enforcement and RATE head Atty. Gregorio V. Cabantac said the Department of Justice (DOJ) has recommended the filing of charges versus Shu Wai Pak and Kim Fai Tung, president and general manager, respectively, of Better Philippines Apparel, Inc., formerly registered as PAMELA, Inc.

In his 8-paged resolution, Chief State Prosecutor Jovencito R. Zuno has recommended the filing of charges for twelve counts of violations of the National Internal Revenue Code (NIRC).

As a duly-registered PEZA enterprise, the company, engaged in the manufacture, sale, import and export of garments products such as blouses, shirts, dresses, jackets, jeans and suits, enjoys Value-Added Tax (VAT) and Income Tax exemptions, except for a 5% Special Tax based on gross income.

The website of the Manila Economic and Cultural Office (MECO) lists Better Philippines Apparel as one of the “Taiwanese companies which have brought successful operations in the Philippines.”

“Our investigation revealed that from 1996 to 2000, the company imported apparel worth US$1.7 million and exported garments worth US$3.5 million. We also obtained documents showing that the company employed over a hundred employees annually who were paid a total of Php1.5 million in salaries,” Cabantac revealed.

But BIR records showed that as of March 2006, the firm has not remitted any tax payment to the government for the years 1996 to 2000.

“This demonstrates that the company’s officers failed to file the necessary tax returns despite clearly earning taxable income for the period, and our efforts to inform them of their obligations through written notices as early 2004,” Cabantac added.

Zuno upheld the BIR’s allegations that the firm owed government Php9.5 million for the special tax of 5% PEZA rate and over Php1 million for the withholding tax on the wages of its employees.

“This latest victory is a result of the continuing and intensified joint effort of the BIR and the DOJ upon the direct instructions of Internal Revenue Commissioner Joel Tan-Torres to coordinate with the National Bureau of Investigation (NBI) and the Criminal Investigation and Detection Group (CIDG) in the surveillance, investigation and prosecution of tax evasion cases to reinvigorate the RATE program,” Cabantac said.

He said the RATE program, which recently won its Php1.2-billion tax case against Makati City Mayor Jejomar Binay, already met and exceeded the USAID-Millennium Challenge Corporation (MCC) target of filing over 127 tax evasion cases.

“For the first time since its inception in 2005, the RATE program won various criminal tax evasion case convictions at the court of tax appeals, regional trial court and municipal trial, with an unprecedented six case convictions all in 2009,” Cabantac added.  BIR has a batting average of 85% winning cases at the courts covering over Php 9 billion.

Among the big cases the RATE program filed at the DOJ were the Php95-million tax evasion case versus Techpoint Corp., the Php126-million case against CEDCO, Inc., and the Php20-million case against Linde Refrigeration, among other cases, plus the more than 20 cases filed by Cabantac in the celebrated tax credit scam involving over Php200 million.