Businesswoman in Pagcor coffee mess sued for alleged tax evasion

The Department of Justice (DOJ) has found probable cause to charge Carlota Cristi Tan, the controversial former cofffee concessionaire of the Philippine Amusement and Gaming Corporation (Pagcor), with tax evasion. In a 10-page resolution, the DOJ panel of prosecutors recommended that a case be filed against Tan for two counts of violation of Section 254 and two counts of violation of Section 255 of the National Internal Revenue Code. Section 254 refers to the attempt to evade or defeat tax, while Section 255 refers to failure to supply correct and accurate information. Tan is a respondent in a plunder case filed by the current management of Pagcor after it was bared that her company, Promolabels, cornered P700 million of the state-owned gaming firm’s P1 billion expenditure for coffee. No less than President Benigno Aquino III, in his second State of the Nation Address, had said that the P1 billion that Pagcor's previous management had spent on coffee was one of the cases of abuse of power that his administration wanted to address. According to the DOJ, Tan, through her business under the names Carmona Race Track and Promolabels Specialty Shop, willfully evaded taxes when she underdeclared her income as coffee concessionaire of Pagcor in its casinos in 2003 and 2004. The DOJ said Tan's Promolabels operated the Figaro Coffee Shops (now Le Bistro) in the casinos run by Pagcor. In the complaint it filed with the DOJ, the Bureau of Internal Revenue (BIR) said certifications issued by Pagcor showed that Tan received P36,724,513.13 in 2003, and P70,244,083.67 in 2004. However, the businesswoman only declared to the government her income as P16,064,523.15 in 2003, and P25,816,926.38 in 2004. The BIR said Tan's underdeclaration in 2003 was 128.61 percent, while in 2004 it was 172.09 percent. "We find there is prima facie evidence that respondent Tan willfully failed to supply the correct and accurate information in her income tax returns (ITRs) for the years 2003 and 2004. The deficiencies in the ITRs of respondent Tan, as  compared to the evidence at hand, are overwhelming," the DOJ said. The DOJ noted that Tan had a tax deficiency of P19,672,712.93 in 2003, and P39,328,068.39 in 2004, for a total of P59,000,781.32, including surcharge of 50 percent and interest. On Tan's defense that she merely relied on the information of her managers and her hired auditors, the DOJ said as taxpayer and business owner, Tan has the duty to verify the information given to her by her employees. "The defense raised by respondent Tan is a mere denial that is best ventilated in a full-blown trial," the DOJ added. — Mark Merueñas/KBK, GMA News