Food Supplement Trading Company Charged with Tax Evasion

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Food Supplement Trading Company Charged with Tax Evasion

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against ABS GEN HERBS INTERNATIONAL (ABS GEN) for Willful Attempt to Evade or Defeat Tax, Deliberate Failure to File Value Added Tax Returns (VATR) for the 1st, 2nd and 3rd quarters of taxable year 2009, and Deliberate Failure to Supply Correct and Accurate Information in its VATR for the 4th quarter of taxable year 2009; 1st, 2nd, and 4th quarters of taxable year 2011; and four (4) quarters of taxable years 2010, 2012, and 2013, in violation of Sections 254 and 255 of the NationalInternal Revenue Code of 1997, as amended (Tax Code).

Likewise charged for the same violations were its responsible corporate officers – Chairman/President PAUL R. GUPANA, and Treasurer GRACE G. GUPANA.

Respondent ABS GEN is a domestic corporation primarily engaged in the business of trading and/or direct selling of goods such as processed foods, general merchandise on wholesale and retail basis, including exportation and importation. Its office address is at PG Tower, 115 Malakas St., Diliman, Quezon City.

In order to ascertain the true sales/receipts of ABS GEN, access letters were sent to its clients, MERCURY DRUG CORPORATION (MERCURY) and GETZ BROS PHILIPPINES, INC. (GETZ BROS), who both issued certifications as to the amount of income payments and taxes withheld they made for the account of ABS GEN for taxable years 2009 to 2013.

Investigators likewise discovered that ABS GEN failed to file its VATRs for the first three (3) quarters of taxable year 2009 and failed to declare its true and correct income in its VATRs for sixteen (16) quarters from the 4th quarter of 2009 to the 4th quarter of 2013, except the 3rd quarter of taxable year 2011.

A comparison of the income payments ABS GEN received from MERCURY and GETZ BROS with its VATR sales declarations with the BIR disclosed that the respondent corporation substantially underdeclared its correct taxable sales by P37.72 million in 2009, P11.82 million in 2010, P3.58 million in 2011, P4.08 million in 2012, and P5.11 million in 2013.

As a consequence of their acts and omissions, ABS GEN and its responsible corporate officers were likewise sued for an aggregate deficiency VAT liability amounting to P18.88 million, inclusive of surcharges and interests, broken down into: 2009 – P12.26 million; 2010 – P3.47 million; 2011 – P0.99 million; 2012 – P1.01 million; and 2013 – P1.15 million.

The case against ABS GEN HERBS INTERNATIONAL, together with its responsible corporate officers, is the 383rd filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of the National Investigation Division. (reytdlc)