The Bureau of Internal Revenue (BIR) today filed two (2) separate criminal complaints with the Department of Justice against ERNESTO Y. YAP (YAP) for willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information in his Income Tax Return (ITR) and Value Added Tax (VAT) Returns for Taxable Years (TY) 2009 and 2010, in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).
YAP is a Filipino operating under the business name DECO COMMERCIAL with residential address at 1677 Purok Manga, Sto. Niño (Pob.), Panabo City, Davao del Norte and business address at Brgy. Sto. Niño, Panabo Central Market, Panabo City, Davao del Norte. He is engaged in the business of sale of hardware and construction materials.
YAP was the subject of a tax audit/investigation by the BIR pursuant to Electronic Letter of Authority (eLOA) Nos. 201000005893-94. Pursuant to the said eLOAs, investigators obtained third-party information from Holcim Philippines, Incorporated (HOLCIM) whose certification disclosed that YAP made purchases from the company in 2009 and 2010 amounting to P82.45 million and P86.04 million, respectively. YAP failed to declare said purchases with the BIR.
A comparison of his declared gross income per ITR for TY 2009 and 2010 of P4.84 million and P5.29 million, respectively, with the income per investigation by the BIR of P96.84 million and P115.23 million in 2009 and 2010, respectively, showed a substantial under-declaration of 1,898% or P92.00 million for TY 2009 and 2,076% or P109.94 million for TY 2010.
Likewise, a comparison of his declared sales per VAT returns for TY 2009 and 2010 of P4.99 million and P5.29 million, respectively, with the taxable sales per investigation by the BIR of P96.84 million in 2009 and P115.23 million in 2010 disclosed a gross underdeclaration of 1,839% or P91.85 million (2009) and 2,076% or P109.94 million (2010).
Under Sec. 248 (B) of the Tax Code, an under-declaration of taxable income by more than 30% constitutes a prima facie evidence of a false or fraudulent return.
YAP was sued for an estimated aggregate tax liability amounting to P172.80 million, inclusive of surcharges and interests, broken down into: P83.63 million – 2009 (Income Tax – P59.85 million; and VAT – P23.78 million); and P89.17 million – 2010 (Income Tax – P64.37 million; and VAT – P24.80 million).
The two cases against ERNESTO Y. YAP are the 139th and 140th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. They are likewise RATE cases of Revenue Region No. 19, Davao City.