The Bureau of Internal Revenue (BIR) today filed with the Department of Justice (DOJ) a criminal complaint against ABANTE INDUSTRIES, INC. (ABANTE) and its responsible corporate officers – President CHARLES C. UY and Vice-President/Corporate Treasurer ROSITA C. UY – for four (4) counts of willful attempt to evade or defeat tax, four (4) counts of willful failure to supply correct and accurate information in its Annual Income Tax Returns (ITRs) and sixteen (16) counts of willful failure to supply correct and accurate information in its Quarterly Value Added Tax (VAT) Returns for taxable years 2004 to 2007, all in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).
ABANTE is a domestic corporation whose primary purpose is to engage in the business of manufacturing goods such as knitted fabrics and to trade the same on a wholesale or retail basis. Its business address is located at 275 Boomtown Industrial Park, Tambubong, Bocaue, Bulacan.
Included in the charge sheet was NELIA YULO PASCO, a Certified Public Accountant with office address at Room 311 Anita Building, Timog Avenue cor. Quezon Avenue, Quezon City, for four (4) counts of violation of Section 257 (A) (2) of the Tax Code for certifying financial Statements containing misstatements of facts covering taxable years 2004 to 2007.
Using information coming from the Bureau of Customs and dividing the amount of importation by the Cost Ratio per Financial Statements, the BIR uncovered substantial underdeclaration of sales by ABANTE amounting to P109.60 million, P378.77 million, P576.22 million and P60.53 million in 2004, 2005, 2006 and 207, respectively.
The undeclared sales per investigation is computed by dividing the sum of the undeclared importations by the ratio of cost to sales per financial statements minus the sales declared per ITR.
Audited Financial Statements and Tax Returns filed by ABANTE with the BIR showed it only declared sales amounting to P58.91 million in 2004, P41.87 million in 2005, P34.92 million in 2006 and PP46.54 million in 2007.
Under the Section 248 (B) of the Tax Code, a substantial underdeclaration of more than thirty percent (30%) constitutes prima facie evidence of fraud.
For the taxable years 2004 to 2007, TEVES was slapped with a deficiency tax assessment of P1.28 billion, inclusive of surcharges and interests, broken down into: P958.33 million – Income Tax; and P320.21 million – VAT.
The case against ABANTE INDUSTRIES, INC. (ABANTE), President CHARLES C. UY, Vice-President/Corporate Treasurer ROSITA C. UY and CPA NELIA YULO PASCO is the seventy-third (73rd) 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 fourth (4th) RATE case of Revenue Region No. 5, Caloocan City.