Sardines firm charged with tax evasion

Mega Fishing Corp., maker of canned and pouched sardines under the brand "Mega Sardines", was charged with tax evasion by the Bureau of Internal Revenue (BIR) before the Department of Justice (DOJ) for duping the government P52.3 million worth of taxes in 2002 and 2003. Charged yesterday under Operation RATE (Run After Tax Evaders) were company president William Tiu Lim and treasurer Marilou Tiu Lim. Investigations showed that Mega Fishing failed to report income, receipts and sales in amounts exceeding 30 percent of those declared per tax returns for taxable years 2002 and 2003. "Substantial under-declaration of income in an amount exceeding 30 percent of that declared in the tax return constitutes prima facie evidence of false or fraudulent return," the BIR said Based on data obtained by BIR from third party information, sales of Mega Fishing amounted to P115.597 million for taxable years 2002 to 2003. However, it only declared sales amounting to P29.844 based on the income tax returns (ITRs) it filed with the BIR for taxable years 2002 and 2003. "Mega Fishing substantially under-declared its income by 548 percent for taxable year 2002 with P45.992 million based on third party information and by P7.099 million based on its ITR and by 206 percent for taxable year 2003 with P69.60 million based on third party information and P22.744 million based on its ITR," the BIR said. This forced the BIR to assess Mega Fishing an estimated deficiency income tax and value added tax (VAT) in the amount of P30.38 million for 2002 and P21.91 million for 2003. An informant tipped the BIR investigators that Mega Fishing was using a provisional receipt in the name of Mega Sardines Corp. that was not registered with the tax agency in violation of the National Internal Revenue Code (NIRC). The informant further averred that the company would only issue its own sales invoices under Mega Fishing when the client demanded or insisted. Mega Fishing was incorporated in 1995 and employs about 800 employees both inland based and fishing ground. It supplies 80 percent of raw materials for various canning companies both in Metro Manila area and Zamboanga. It owns seven sets of commercial deep-sea purse seiners totaling 55 fishing vessels. - GMANews.TV