DOJ seeks HDO vs trader in 'biggest' tax evasion case under Aquino

The government has asked the Court of Tax Appeals to issue a hold departure order (HDO) against a real estate businessman embroiled in a P2.3 billion tax evasion case. In a motion signed by Senior State Prosecutor Susan Dacanay and dated November 8, the Department of Justice (DOJ) said an HDO should be issued because "there is real danger" that Macario Gaw Jr will leave the country to evade charges he is facing. The DOJ said that Gaw's tax evasion case was the biggest under the Aquino administration. Gaw is facing two counts of violation of section 255 of the National Internal Revenue Code of 1997. The DOJ said the businessman failed to pay the following:

• P1,010,354,572.93 as basic value-added tax liability, exclusive of penalties, surcharges and interests; and
• P1,316,860,155.56 as basic income tax liability, exclusive of penalties, surcharges, and interests.

“Considering the gravity and magnitude of the offense committed and the damage and prejudice caused to the government as well as the imposable penalty which involves imprisonment, not to mention that he has vast resources, there is real danger that accused will flee the country to avoid criminal liability," Dacanay said in her request to the Court of Tax Appeals. The DOJ insisted that Gaw should be prevented from leaving the country during the pendency of the tax evasion cases. According to records obtained by the DOJ, Gaw has two houses inside the Corinthian Gardens in Quezon City, one along Castrillo Street and another along David Street. If found guilty, Gaw will be ordered to pay at least P10,000 and be imprisoned not less than one year but not more than 10 years for each count. The Bureau of Internal Revenue (BIR) filed the case against Gaw in August 2010 for failing to correct the amount of taxes and wrongfully classifying land sales. According to the BIR, Gaw entered wrong information in his 2007 and 2008 income tax returns. The bureau also claimed that he failed to file returns for value-added tax in 2008. Gaw used three tax identification numbers to skirt laws on paying taxes, BIR Commissioner Kim Jacinto-Henares said, adding that securing multiple TINs is criminally liable under Section 275 of the National Internal Revenue Code. Gaw purchased 10 parcels of land in 2007 for P4 billion. Throughout the succeeding eight months after the purchase, he sold the property for P8 billion. Instead of classifying the sale of the 10 lots as an ordinary asset sale, Gaw declared the transaction as capital asset sale. The sale of ordinary assets carry higher taxes compared with capital assets. — LBG, GMA News