BIR files tax evasion case vs construction firm

The Bureau of Internal Revenue on Thursday filed before the Justice Department a tax evasion case against officials of a construction firm that supposedly did not pay the right amount of taxes and failed to declare correct information in its income tax return. Charged for income tax and value-added tax (VAT) deficiencies were spouses Dennis and Natalie Masigan, president and corporate secretary, respectively, of DSM Construction and Development Corp. (DSM). Eldrin Masigan was also charged in his capacity as DSM's vice president for operations. "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, and willful failure to file VAT return and pay VAT for 2006 are patent violations of the pertinent provisions of the Sec. 255 of the Tax Code of 1997," the Bureau of Internal Revenue said in a statement. In 2006, the firm received an "arbitration award" of P80 million from Mega World Globus Asia Inc. covering unpaid fees for the construction of Salcedo Park Twin Towers in Makati, the bureau said in the statement. But DSM did not declare the amount in its income tax return that year, the BIR said. The Masigans are also being sued for income tax and VAT deficiencies in 2006 amounting to P52 million and P16 million, respectively. At a briefing at the Justice Department, BIR Commissioner Kim Hacinto-Henares said the bureau will widen its investigation on DSM’s tax deficiencies and see if the company committed similar violations before and after 2006. Finance Secretary Cesar Purisima, who was also at the briefing, reiterated "it can't be business as usual" under the new administration. He warned that the Finance Department would also investigate erring auditors in cahoots with tax evaders. "We are holding the accounting profession responsible for their work. We will be filing cases against erring accountants and even lawyers," said Purisima. The tax evasion complaint against DSM officials is the second the BIR filed under its Run After Tax Evaders or RATE program under President Benigno Aquino III's term. —JE/VS, GMANews.TV