The Bureau of Internal Revenue (BIR) today filed separate criminal complaints with the Department of Justice against six (6) Filipino Asian Development Bank (ADB) employees for Willful Failure to Pay Taxes for taxable year 2013 under Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

Charged were MARIAN G. ARELLANO, EILEEN PURITA Q. BATTUNG, ELBERT E. BUENO, HELEN Y. CARNECER, MARY ANNE A. CHANECO, and ANNA S. CERVANTES. The six (6) respondents are registered taxpayers and Filipino nationals employed at the Asian Development Bank (ADB) located at No. 6 ADB Avenue, Mandaluyong City, within the jurisdiction of BIR Revenue District Office (RDO) No. 41, Mandaluyong City.

As registered taxpayers, ARELLANO, BATTUNG, BUENO, CARNECER, CHANECO, and CERVANTES filed their Income Tax Returns (ITRs) for taxable year 2013 declaring gross compensation income amounting to P2.04 million, P1.25 million, P1.23 million, P1.24 million, P1.01 million, and P1.57 million, respectively.

The Agreement between ADB and the Government of the Republic of the Philippines states that only officers and staff of the ADB who are not Philippine Nationals shall be exempt from Philippine Income Tax. Thus, respondents ARELLANO, BATTUNG, BUENO, CARNECER, CHANECO, and CERVANTES, being ordinary employees of ADB and Philippine Nationals, are subject to Income Tax. However, they all refused to pay any income tax due on their respective ITRs.

The willful failure of the respondents to pay their income tax liability was further emphasized by their obstinate refusal to pay their taxes despite notification and assistance from the BIR to ADB Filipino employees to file their returns and pay the corresponding tax dues. The BIR through its ADB Task Force briefed ADB officials and ADB Filipino employees and answered concerns and issues on the taxability of the compensation income of Filipino ADB employees.

A BIR kiosk was even established at the lobby of the General Headquarters of ADB to serve as a one-stop window where local ADB personnel can transact business and accommodate registration, transfer of registration and updating of records, filing of ITRs and payment of taxes. Further, payment of taxes by Filipino ADB employees was extended by the BIR from April 15, 2013 up to July 15, 2013.

The income tax liabilities of respondents ARELLANO, BATTUNG, BUENO, CARNECER, CHANECO, and CERVANTES for taxable year 2013 amounting to P0.79 million, P0.46 million, P0.42 million, P0.46 million, P0.36 million, and P0.59 million, respectively, remained unpaid despite the Collection Letters sent by the BIR requesting for payment thereof.

The cases against MARIAN G. ARELLANO, EILEEN PURITA Q. BATTUNG, ELBERT E. BUENO, HELEN Y. CARNECER, MARY ANNE A. CHANECO, and ANNA S. CERVANTES are the 295th, 296th, 297th, 298th, 299th, and 300th filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. These are likewise RATE cases of Revenue Region No. 7, Quezon City.