BIR files P359-M tax evasion case vs. multi-level marketing firm Royale

The Bureau of Internal Revenue (BIR) on Thursday filed before the Department of Justice a P359 million tax evasion complaint against a Quezon City-based multi-level marketing group for its failure to file accurate information on its income tax returns. 

 

In its complaint, the BIR said Royale Business Club International, Incorporated (Royale) violated the National Internal Revenue Code of 1997 when it “willfully attempted to evade or defeat tax” and deliberately failed to supply correct and accurate information in its annual income tax returns and quarterly value added tax returns” for 2011, 2012 and 2013. 

 

The company is engaged in the marketing of consumer products and distributorship of food supplements, cosmetics and pharmaceutical products and beverages. 

GMA News is trying to get the company's side as of posting time.

 

Also charged were the company’s president Julius Allan Nolasco, vice president for finance Isa Angela Bautista, assistant treasurers Jeanette Maghirang and Imelda Pedron and assistant accounting manager Marjorie Molina. 

 

An investigation by the BIR showed Royale received income payments from various banks including the Bank of Philippine Islands (P141.60 million), Metrobank (P468.55 million) and Banco de Oro (P171.07 million). 

 

The company, however, only declared in its ITR gross sales amounting to P39.14 million in 2011, P106.69 million in 2012 and P196.68 million in 2013. 

 

“In sum, Royale received income payments from the said banks amounting to P190.79 million in 2011, P236.38 million in 2012 and P354.06 million in 2013. Investigators, however, discovered that Royale declared in its ITR gross sales amounting to P39.14 million in 2011, P106.69 million in 2012 and P196.68 million in 2013, thus, substantially underdeclaring its correct taxable sales by 387 percent or P151.64 million in 2011, by 122 percent or P129.69 million in 2012 and by 80 percent or P157.38 million in 2013,” the complaint read. 

 

The BIR computed Royale's aggregate deficiency tax liability to be P359.75 million, inclusive of surcharges and interests, broken down into P135.87 million in 2011, P115.39 million in 2012 and P108.49 million in 2013. 

 

Also on Thursday, the BIR sued a Makati-based metal products and semi-conductor peripherals manufacturing company and its officers for “willful failure to pay taxes for taxable year 2009." 

 

Charged before the DOJ were Vivetech Corporation (Vivetech) and its president and chairman Edwin Lumague and treasurer Roedel Lumague. The company is primarily engaged in the manufacturing and trading of metal products, jigs, filters and peripherals used in the semi-conductor and electronics industries, said the BIR. 

 

They were charged for unpaid tax liabilities amounting to P32.96 million, inclusive of increments. 

 

The BIR said Vivetech failed to protest their assessments of tax liabilities within the 30-day reglementary period, thereby, making the agency’s electronic letter of authority, preliminary assessment notice and formal assessment notice “final, executor, unappealable and demandable.” 

 

“The subsequent issuances of the preliminary collection letter, final notice before seizure and warrant or distraint were ignored by the respondent, as the said tax assessments remained unpaid. The respondent’s obstinate failure and continued refusal to pay its long overdue deficiency tax assessments, despite repeated demands, constitute willful failure to pay the taxes due to the government,” the BIR said. —NB, GMA News