BIR Files P416M Tax Evasion Cases vs POGO-linked firm, realty sellers

MANILA, Philippines — The Bureau of Internal Revenue (BIR) has filed three criminal complaints before the Department of Justice against a Philippine offshore gaming operator (POGO)-linked firm, a construction company and real estate sellers, with combined estimated tax liabilities amounting to P416 million. In a statement, the BIR said the largest case was filed against Zun Yuan Technology Inc., a POGO-linked company, for failing to pay taxes and supply correct and accurate information in tax returns. The case involves an estimated total tax liability of P402.74 million. Last year, President Marcos signed into law a measure banning all POGO operations in the Philippines, citing illicit activities and threat to national security. While Zun Yuan reported revenues from its POGO operations, the BIR said the firm failed to declare substantial taxable income from offshore gaming activities, resulting in significant deficiencies in income tax, value-added tax (VAT) and withholding taxes. BIR Commissioner Charlito Martin Mendoza vowed to continue pursuing taxpayers who deliberately evade their tax obligations, regardless of the industry or scheme involved. Whether the violation involves underdeclared income, false tax filings or misrepresentation of transactions, Mendoza said the bureau would pursue every case supported by evidence. “Honest taxpayers deserve a system that is fair and that means holding accountable those who deliberately evade paying the correct taxes,” he said. The BIR filed 269 criminal complaints nationwide under the Run After Tax Evaders (RATE) program in the first half. The second complaint was filed against AEP Construction and its officers for an estimated total tax liability of P6.02 million. Investigators found that the company substantially underdeclared its taxable income, resulting in deficiencies in income tax and VAT. The third case, which involves an estimated total tax liability of P7.31 million, covers two VAT-registered real estate sellers who face criminal charges for willful failure to pay taxes and willful failure to supply correct and accurate information in their tax returns. Authorities found that the sellers treated the transactions as subject to capital gains tax despite being VAT-registered and engaged in the sale of real properties in the ordinary course of business. This resulted in deficiencies in income tax and value-added tax. Based on its findings, the Bureau recommended the filing of criminal charges before the Justice department for violations of the National Internal Revenue Code.