BIR files 2nd Malampaya-related tax evasion case

The Bureau of Internal Revenue (BIR) on Thursday filed a second tax evasion complaint related to the controversial Malampaya gas fund.

 

The BIR filed a P78.65-million tax evasion complaint against Lorenzo Leoncio, owner of LB Leoncio Trading and Construction, which is engaged in construction and other commercial transactions in Palawan.

 

His firm was contracted by the provincial government of Palawan to construct several infrastructure projects paid for with Malampaya funds for taxable year 2008.

 

In its investigation, the BIR found that Leoncio declared in his income tax return gross revenues of P18.04 million.

 

The BIR, however, later found that he earned P91.82 million in 2008, which meant he underdeclared his income by P73.78 million or by 409 percent.

 

The BIR's findings were based on checks issued by the Palawan local government, disbursement vouchers, and official receipts issued by his firm.

 

He was slapped with a criminal complaint for willful attempt to evade or defeat tax, deliberate failure to supply correct and accurate information in his ITR and fourth quarter value-added tax return, and failure to file his first, second, and third quarter VAT returns for taxable year 2008.

 

He will also face a complaint for violation of Sections 254 and 255 of the National Internal Revenue Code of 1997 as amended.

 

The first Malampaya-related complaint was filed in November against Bella Tiotangco - owner of BCT Trading and Construction  (BCT), based in Sitio Digiboy, Guadalupe, Coron, Palawan.

 

According to the BIR, BCT was contracted by the provincial government of Palawan to construct several infrastructure projects funded by Malampaya funds in 2008.

 

The BIR that her gross revenues for 2008 were P401.48 million, revealing that underdeclared her income by by P233.71 million or by 139%.

 

Also, the BIR found out that Tiotangco underdeclared her value added tax declaration for the 2nd, 3rd and 4th Quarters of 2008 by P71.55 million (224%), P123.66 million (318%) and P123.11 million (246%), respectively.

 

Once computed, Tiotangco's total deficiency tax liability to the government in 2008 amounts to P277.21 million, inclusive of surcharges and interests, broken down as follows: income tax of P181.31 million; and VAT of P95.90 million.

 

The Malampaya fund was created through Marcos-era Presidential Decree 910 to be used for energy development and exploitation programs.

 

Malampaya is a natural gas field located in the West Philippine Sea, off northwest Palawan. The project is spearheaded by the Department of Energy and operated by Shell Philippines Exploration B.V. (SPEX) with joint venture partners Chevron Malampaya LLC and PNOC Exploration Corporation.

 

Test drills conducted by SPEX in 1989 confirmed the presence of about 2.7 trillion cubic feet of natural gas reserves and 85 million barrels of condensate — liquid hydrocarbon mainly composed of propane, butane, pentane and heavier hydrocarbon fractions — located some 3,000 meters below sea level. — JDS, GMA News