BIR runs after Telecom Trader from Urdaneta City

The Bureau of Internal Revenue (BIR) today filed a criminal complaint against a popular restaurant and its responsible corporate officers, together with the Register of Deeds of Manila, in connection with the transfer of title over a parcel of land and all the improvements therein without the required Certificate Authorizing Registration (CAR) from the BIR and without the payment of the internal revenue taxes due on the sale thereof for taxable year 2008.

Charged at the Department of Justice were BULWAGANG FILIPINO RESTAURANT, INC. (Bulwagang Filipino) and its responsible corporate officers MA. CRISTINA K. MUÑOZ, ROQUE K. MUÑOZ, JR., CATHERINE MUÑOZ and BENJAMIN AQUINO for one (1) count of willful attempt to evade or defeat payment of income tax for its failure to declare as part of its gross income the gain it realized from the sale of its real property in Ermita, Manila, one (1) count of attempt to evade payment of documentary stamp tax (DST) due on the sale and one (1) count of attempt to evade payment of Value-Added Tax (VAT) due on the sale. They were likewise charged for three (3) counts of willful failure to file Quarterly Income Tax Return (ITR), Annual ITR, and quarterly VAT return for taxable year 2008, in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

On the other hand, Atty. MARISSA E. TOMINES, in her capacity as Register of Deeds of Manila at the time of registration of the property, was likewise charged for tax evasion for willfully aiding and abetting in the commission of tax evasion, in accordance with the provision of Section 253 (B) of the Tax Code.

Investigation by the BIR disclosed that on March 19, 2008, Bulwagang Filipino executed a Deed of Absolute Sale with Supercare Medical Services, Inc. (Supercare) transferring ownership of a parcel of land and all improvements therein situated at No. 573 Maria Orosa St. corner Arkansas St., Ermita, Manila for a consideration of P33 million. On the same date, a second Deed of Absolute Sale covering the same properties was executed by the same parties for P15 million which amount was used and annotated as the purchase price for purposes of transferring the title to the buyer. Records show that no CAR was issued by the BIR in connection with the said transaction indicating that no taxes, creditable withholding tax and documentary stamp tax, were paid in connection with said sale transaction. Neither were there documents in the Land Registration Authority to support the transfer of title. In fact, no CAR serial number was indicated by the Register of Deeds of Manila in the new title issued to Supercare.

The above scheme of executing two deeds of sale to underdeclare the purchase price and to evade payment of taxes by simulating the issuance of a CAR could not have succeeded without the aid of the Register of Deeds who issued the new title over the property without indicating a CAR serial number to decrease the probability of fraud detection.

Further investigation revealed that the property that was sold to Supercare was the place where Bulwagang Filipino conducted its business prior to the sale. As such, the subject property is considered an ordinary asset and the gains realized from its sale must be reported as part of the gross income which the seller failed to declare for purposes of income tax and VAT.

Bulwagang Filipino is also being asked to pay the government P31.71 million in deficiency taxes for 2008, including surcharges and interests, broken down as follows: Income Tax – P22.13 million; VAT – P8.51 million; and DST – P1.07 million.

The case against BULWAGANG FILIPINO RESTAURANT, INC., its responsible corporate officers MA. CRISTINA K. MUÑOZ ROQUE K. MUÑOZ, JR., CATHERINE MUÑOZ and BENJAMIN AQUINO, and Atty. MARISSA E. TOMINES, in her capacity as then Register of Deeds of Manila, is the fifty-fourth (54th) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.