By Tetch Torres
INQUIRER.net
First Posted 18:28:00 04/07/2011
MANILA, Philippines—The Department of Justice (DoJ) ordered the filing of tax evasion case against a billionaire businessman before the Court of Tax Appeals.
In an 8-page resolution approved by Prosecutor General Claro Arellano, the DoJ gave the go for the prosecution of Macario Lim Gaw for violation of Section 255 of the National Internal Revenue Code (NIRC); which provides penalty for a tax payer’s failure to file return; supply correct and accurate information; pay tax withhold and remit tax and refund excess taxes withheld on compensation.
The resolution is dated March 17, 2011, but was released to the media on Thursday through a press conference by Justice Secretary Leila De Lima.
In December, 2007 and from April to June, 2008, Gaw bought a total of 10 properties consisting of an aggregate area of 19.5592 hectares from which he sold in July, 2008.
The DoJ, in its resolution stated that Gaw failed to pay the corresponding tax for the income he earned for the sale of the said properties.
Gaw said that he already paid the corresponding capital gains tax as he insisted that the sold properties were capital assets and not ordinary assets as claimed by the Bureau of Internal Revenue (BIR).
Gaw paid the 6 percent capital gains tax amounting to P9,111,801.69 for 2007 and P418,746,021.11 for 2008 to evade the payment of the 32 percent income tax and the 12 percent VAT due to sale of lands classified as ordinary assets.
However, the DoJ pointed that evidence showed the transactions of Gaw, as well as his continuing transactions showed he is engaged in real estate business under the BIR revenue regulation 7-2003.
“While respondent would insist that the revenue regulation merely pertains to selling and not buying, the revenue regulation does not distinguish since the revenue regulation itself states that the property purchased for future use in the business, even though this purpose is later thwarted by circumstances beyond the taxpayer’s control, does not lose its character as an ordinary asset,” the DoJ said.
The DoJ added that Gaw himself, in an agreement to sell dated April 3, 2008, which he submitted to the DoJ showed that he is actually into business of selling real properties for profit.
The BIR said Gaw is registered as a one-time transaction tax payer which, according to the BIR are those who are selling properties which is not in the nature of a regular business transaction.
But the DoJ reiterated the statement made by the BIR that Gaw has extensive knowledge in real-estate business having handled nine real-estate transactions for various corporations.
Gaw is the president of Mega Packaging Corp. and Makro LPG.
INQUIRER.net
First Posted 18:28:00 04/07/2011
MANILA, Philippines—The Department of Justice (DoJ) ordered the filing of tax evasion case against a billionaire businessman before the Court of Tax Appeals.
In an 8-page resolution approved by Prosecutor General Claro Arellano, the DoJ gave the go for the prosecution of Macario Lim Gaw for violation of Section 255 of the National Internal Revenue Code (NIRC); which provides penalty for a tax payer’s failure to file return; supply correct and accurate information; pay tax withhold and remit tax and refund excess taxes withheld on compensation.
The resolution is dated March 17, 2011, but was released to the media on Thursday through a press conference by Justice Secretary Leila De Lima.
In December, 2007 and from April to June, 2008, Gaw bought a total of 10 properties consisting of an aggregate area of 19.5592 hectares from which he sold in July, 2008.
The DoJ, in its resolution stated that Gaw failed to pay the corresponding tax for the income he earned for the sale of the said properties.
Gaw said that he already paid the corresponding capital gains tax as he insisted that the sold properties were capital assets and not ordinary assets as claimed by the Bureau of Internal Revenue (BIR).
Gaw paid the 6 percent capital gains tax amounting to P9,111,801.69 for 2007 and P418,746,021.11 for 2008 to evade the payment of the 32 percent income tax and the 12 percent VAT due to sale of lands classified as ordinary assets.
However, the DoJ pointed that evidence showed the transactions of Gaw, as well as his continuing transactions showed he is engaged in real estate business under the BIR revenue regulation 7-2003.
“While respondent would insist that the revenue regulation merely pertains to selling and not buying, the revenue regulation does not distinguish since the revenue regulation itself states that the property purchased for future use in the business, even though this purpose is later thwarted by circumstances beyond the taxpayer’s control, does not lose its character as an ordinary asset,” the DoJ said.
The DoJ added that Gaw himself, in an agreement to sell dated April 3, 2008, which he submitted to the DoJ showed that he is actually into business of selling real properties for profit.
The BIR said Gaw is registered as a one-time transaction tax payer which, according to the BIR are those who are selling properties which is not in the nature of a regular business transaction.
But the DoJ reiterated the statement made by the BIR that Gaw has extensive knowledge in real-estate business having handled nine real-estate transactions for various corporations.
Gaw is the president of Mega Packaging Corp. and Makro LPG.
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