An “active” SILVER TRUMPETS & COMPANY, INC. (SILVER TRUMPETS), including its President MA. LUZ C. PANGILINAN, was “aired” today by the Bureau of Internal Revenue (BIR) for declaring “no operation” in its Quarterly Valued Added Tax (VAT) Returns and Annual Income Tax Return (ITR) for taxable year 2003 after a criminal complaint for tax evasion was filed against it with the Department of Justice for willful attempt to evade or defeat tax, deliberate failure to supply correct and accurate information and pay tax, and making false entries in the company tax returns, in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).
SILVER TRUMPETS is a domestic corporation whose primary purpose is to act as marketing arm for television/film program producers, to sell broadcast advertising spots or spaces to advertisers and to offer consultancy services for media planning and other related media services.
Investigation showed that SILVER TRUMPETS filed its Quarterly VAT returns and ITR for taxable year 2003 and indicated therein that it has “No Operation.” However, an inquiry into the Summary List of Purchases submitted to the BIR by Warner Bros. (F.E.), INC. disclosed that SILVER TRUMPETS was paid P10.09 million for services rendered to the former in 2003.
The discovery led the BIR to issue and serve a Letter Notice (LN) to SILVER TRUMPETS asking the latter to rebut the said discrepancy. SILVER TRUMPETS, however, failed to reconcile the discrepancy prompting investigators to compute its total income tax and VAT liabilities for which the BIR issued and served the required assessment notices and collection letters to SILVER TRUMPETS.
Notwithstanding repeated demands and the lapse of considerable length of time, SILVER TRUMPETS has still failed and refused to pay its tax liabilities. Together with such obstinate refusal to pay, the act of SILVER TRUMPETS in declaring it had “No Operation” in 2003 when in fact it had taxable income in the said taxable year constituted prima facie evidence of fraud tantamount to tax evasion.
SILVER TRUMPETS was assessed a total deficiency tax for 2003 amounting to P9.2 million, inclusive of surcharges and interest, broken down as follows: Income Tax – P2.2 million; and VAT – P7.0 million.
The case against SILVER TRUMPETS & COMPANY, INC. and its President MA. LUZ C. PANGILINAN is the sixty-first (61st) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise the first (1st) RATE case of Revenue Region No. 9, San Pablo City.