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Manufacturing company charge with tax evasion

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against PHILPACKAGING CORPORATION (PHILPACKAGING), its President CAMINO D. BENEDICTO, and its Treasurer JUANITO L. BENEDICTO for one (1) count of willful attempt to evade or defeat payment of Income Tax for taxable year (TY) 2010, one (1) count of willful attempt to evade or defeat payment of Value Added Tax (VAT) for TY 2010, one (1) count of willful failure to supply correct and accurate information in the Annual Income Tax Return (ITR) for TY 2010, and four (4) counts of willful failure to supply correct and accurate information in the VAT Returns for the four quarters of TY 2010, all in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

PHILPACKAGING is a domestic corporation registered with the Securities and Exchange Commission primarily engaged in the business of manufacturing goods such as plastic woven cloth and bags, and trading of the same on wholesale and retail basis with business address at Suite 1401 The Centerpoint, Julia Vargas corner Garnet Road, Ortigas Center, Pasig City.

Investigation disclosed that Republic Cement and Peerless Products Manufacturing Corporation made purchases from PHILPACKAGING amounting to P186.30 million and P18.99 million, respectively, for TY 2010. Investigators likewise discovered that PHILPACKAGING received income amounting to P449,030.00 from Pepmaco Manufacturing Corporation based on the latter’s filing of BIR Form 2307 (Certificate of Creditable Withholding Tax at Source) for TY 2010.

A comparison of the abovementioned amounts in the sum of P205.74 million with the declarations of PHILPACKAGING with the BIR revealed that PHILPACKAGING substantially underdeclared its sales by P163.33 million (385.11%) by reporting gross sales amounting to only P42.41 million for TY 2010.

PHILPACKAGING was assessed an aggregate deficiency tax for TY 2010 in the amount of P50.83 million, inclusive of surcharges and interests, broken down as follows: Income Tax – P14.43 million; and VAT – P36.40 million.

The case against PHILPACKAGING CORPORATION (PHILPACKAGING), its President CAMINO D. BENEDICTO, and its Treasurer JUANITO L. BENEDICTO is the 129th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.