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) 2009, one (1) count of willful attempt to evade or defeat payment of Value Added Tax (VAT) for TY 2009, one (1) count of willful failure to supply correct and accurate information in the Annual Income Tax Return (ITR) for TY 2009, and four (4) counts of willful failure to supply correct and accurate information in the VAT Returns for the four quarters of TY 2009, 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.
Third Party Information disclosed that Pacific Sugar Holdings Corp., Republic Cement and Peerless Products Manufacturing Corp. made purchases from PHILPACKAGING amounting to P10.55 million, P109.05 million and P6.67 million, respectively, for TY 2009. Investigation likewise showed that PHILPACKAGING received in the same year additional income amounting to P37,259.00 from Holcim Philippines, Inc. as certified by the Chief of the Withholding Tax Division of the BIR.
A comparison of the abovementioned amounts in the sum of P126.31 million with the declarations of PHILPACKAGING with the BIR revealed that PHILPACKAGING substantially underdeclared its sales by P85.24 million or 208% by reporting gross sales amounting to only P41.07 million for TY 2009.
Under the Tax Code, an underdeclaration of more than 30% is substantial and constitutes prima facie evidence of fraud tantamount to tax evasion.
PHILPACKAGING was assessed an aggregate deficiency tax for TY 2009 in the amount of P72.66 million, inclusive of surcharges and interests, broken down as follows: Income Tax – P51.37 million; and VAT – P21.29 million.
The case against PHILPACKAGING CORPORATION, its President CAMINO D. BENEDICTO, and its Treasurer JUANITO L. BENEDICTO is the 130th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.