DOJ recommends filing of tax cases vs. 'BGC Boys' for P1.68-B tax liabilities

The Department of Justice (DOJ) has recommended the filing of 44 criminal tax cases against the "BGC Boys" or "Bulacan Group of Contractors" over combined tax liabilities amounting to P1.68 billion, the Bureau of Internal Revenue (BIR) said Thursday.

According to the BIR, the DOJ in separate resolutions found probable cause to charge former DPWH Bulacan assistant district engineer Jaypee De Leon Mendoza, first district engineer Henry Alcantara, and first district engineer Brice Ericson Hernandez with tax evasion under Section 254 and related violations under Section 255 of the National Internal Revenue Code (NIRC), as amended.

The individuals are part of the so-called "BGC Boys" or "Bulacan Group of Contractors," who are already facing a tax evasion case, following a lifestyle check which the BIR earlier found not to match their income.

The BIR said the cases will be filed before the Court of Tax Appeals.

In a statement, the bureau said, "The BIR used the expenditure method, a recognized method for reconstructing income in tax investigations, wherein unexplained expenditures exceeding reported income may be treated as evidence of unreported taxable income."

With this method, discrepancies were found in their declared income and actual spending, along with the non-filing and underreporting of tax returns over multiple taxable years.

According to the BIR, the DOJ recommended filing of 16 criminal informations against Mendoza for P179.785 million in total tax liabilities from 2021 to 2024; 18 criminal informations against Alcantara for P913 million in total tax liabilities from 2022 to 2024; and 10 criminal informations against Hernandez for P593.776 million in total tax liabilities from 2020 to 2024.

"The DOJ's finding of probable cause is an important milestone in the enforcement process. These cases demonstrate the Bureau's continuing commitment to enforce the tax laws based on evidence and in accordance with the law," BIR Commissioner Charlito Martin Mendoza said in a statement.

"The Bureau will continue to enforce the tax laws firmly, fairly, and consistently, while respecting due process at every stage of the proceedings," he added.

Hernandez and Mendoza are currently detained at the New Quezon City Jail.

Meanwhile, Alcantara is under the Witness Protection Program.

The three are also facing graft complaints with the Office of the Ombudsman. Their assets were also earlier included in the first batch of freeze orders, which covered 135 bank accounts and 27 insurance policies.

To recall, President Ferdinand "Bongbong" Marcos Jr. in August reported that 20% of the total P545-billion budget for flood control projects went to only 15 contractors, which he described as a "disturbing assessment."

The President has vowed to ensure that those involved in anomalous projects would be held accountable, triggering controversy in both chambers of Congress to launch their own probes into the issue. — VDV, GMA News