DOF to check tax records of rice traders

MANILA, Philippines – The Department of Finance department and Bureau of Internal Revenue (BIR) will be reviewing the tax payment records of the country’s rice traders and have asked National Food Authority (NFA) chief Lito Banayo to provide them a list of the businessmen.

Finance Secretary Cesar Purisima on Thursday acknowledged that the review of the traders’ tax records is an offshoot of accusations by President Benigno Aquino III during his State of the Nation Address (SONA) that the previous administration had over-imported rice and caused the NFA’s debt to balloon to P177 billion.

“We have to check their income tax returns given the volume of the importation. We will leave no stone unturned in the fight against tax evaders,” Purisima said at a press briefing at the Department of Justice (DOJ).

Aside from the rice traders, the BIR has also been instructed to review the existing guidelines on accrediting auditors in the belief some of them are in cahoots with tax evaders.

Purisima said the government should take such action against erring auditors as revoking their licenses.

On Thursday, the BIR filed tax evasion charges before the DOJ against Dennis Masigan, president, and Natalie Ng Masigan, corporate secretary, of DSM Construction and Development Corporation (DSM) for failure to supply correct information in the firm’s 2006 income tax return and pay the corresponding income tax.

The two, according to the BIR, also failed to file value-added tax (VAT) returns and pay the VAT for 2006.

Charged with the couple was Eldrin Masigan, vice president for operations of the corporation.

Based on BIR records, DSM‘s income tax for 2006 ran to P52.47 million and its VAT deficiencies, P16.06 million.

The charges stemmed from DSM’s failure to report to the BIR an P80-million compromise settlement it received in full from Mega World Globus Asia, Inc. (Mega World) in 2006.

The BIR said the settlement was at that time considered the “construction industry’s largest arbitration award” for unpaid billings claimed by DSM against Mega World on construction contracts.

“The deliberate and willful failure of DSM to supply correct and accurate information in its 2006 income tax return and pay the correct income tax therefore as well as willful failure to file VAT return and pay VAT for 2006 are patent violations of the pertinent provisions of Section 255 of the Tax Code of 1997,” the BIR said.