The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against GLORIMART TRADING, INC. (GLORIMART) and its President GLORIA G. NAVARRO and Treasurer LUIS NAVARRO for willful attempt to evade or defeat tax, willful failure to file Income Tax Return (ITR) and to pay tax thereon, and deliberate failure to supply correct and accurate information in its Value Added Tax (VAT) Return for the fiscal year ended June 2008, in violation of Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

GLORIMART is a domestic corporation primarily engaged in the business of a general supermarket, importation, exportation, buying, selling or otherwise disposing and dealing in general merchandise, whether wholesale or retail. Its office is located at No. 20 Badjao, La Vista, Quezon City.

An evaluation of documents gathered from the BIR and the Register of Deeds of Manila and Quezon City by BIR investigators revealed that GLORIMART sold to Shoemart, Inc. in January 7, 2008 parcels of land located in Manila, Quezon City and Novaliches covered by twenty-one (21) Transfer Certificates of Title (TCTs) and six (6) deeds of sale. The said deeds of sale showed a total selling price of P465.19 million, including 12% VAT, and a total zonal value of P592.26 million.

The BIR found that the said parcels of land were previously used in business by GLORIMART as its supermarket outlets (more popularly known as Glo-ri’s Supermart) and as such, the subject lots should be treated as ordinary assets under the Tax Code. Being ordinary assets, the gain or loss from the sale of said assets should be declared by GLORIMART as an ordinary gain or loss in its ITR for 2008.

The Certificates Authorizing the Registration (CARs) of said lots issued by the BIR showed that only the creditable withholding tax, documentary stamp tax and registration were paid.

Further verification revealed that GLORIMART did not file its ITR for 2008 where such sales should have been reported as income.

The said sales being subject to VAT should have also been reported fully in the VAT returns of GLORIMART. However, only the sales amount of P30.87 million with a corresponding VAT of P4.84 million was declared by GLORIMART in its January 2008 VAT return.

GLORIMART was thus assessed a total deficiency tax liability amounting to P632.83 million, inclusive of surcharges and interests, covering the fiscal year ended June 2008, broken down into Income Tax of P476.77 million and VAT of P156.06 million.

The case against GLORIMART TRADING, INC. and its President GLORIA G. NAVARRO and Treasurer LUIS NAVARRO is the 111th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.