Cedric Lee charged with tax evasion-A A +A
Thursday, March 27, 2014
CEDRIC Lee and his company Izumo Contractors were charged with tax evasion before the Department of Justice (DOJ) on Thursday for allegedly not remitting P194.47 million to the government from 2006 to 2009.
Izumo chief operating officer John Ong and chief financial officer Judy Gutierrez Lee were the businessman’s co-respondents in the complaint filed by the Bureau of Internal Revenue (BIR).
In unearthing Izumo’s tax liabilities, the BIR said it received confidential information denouncing the company for understating its income.
Access letters were sent by the BIR to clients to determine the true income received by Quezon City-based Izumo, whose projects include the Davao del Sur Cultural Sports Business Center and the Maasin City Integrated Market Complex.
Replies to said access letters in the form of certifications showed that Izumo received a total amount of P302.63 million in income payments from 2006 to 2009, broken down into: City Government of Butuan – P80.64 million (P48.02 million – 2006; P32.63 million – 2007); City Government of San Juan – P59.76 million (P46.31 million – 2006; P13.45 million – 2007); City Government of Pasay - P12.36 million (2008); Provincial Government of Davao del Sur - P113.33 million (2009); and Municipal Government of Tagudin, Ilocos Sur – P36.54 million (P18.46 million – 2008; P18.08 million – 2009).
Further investigation showed that Izumo declared in its income tax return (ITR) P5.54 million in 2006, P9.14 million in 2007, P21.34 million in 2008 and P40.20 million in 2009 for a total amount of P76.22 million.
After comparing Izumo's gross income with its clients, the BIR found that the company "substantially" underdeclared its taxable income by P88.79 million or 1,602 percent in 2006, by P36.93 million or 404 percent in 2007, by P9.49 million or 44 percent in 2008 and by P91.20 million or 227 percent in 2009.
Under Section 248 (B) of the Tax Code, underdeclaration of taxable income by more than 30 percent is considered substantial and constitutes a prima facie case of fraud tantamount to tax evasion.
Izumo's tax deficiency, inclusive of surcharges and interests, was broken down into P89.77 million for 2006, P33.78 million for 2007, P8.27 million for 2008 and P62.65 million for 2009.
Lee, who hogged headlines last January for leading a group of men in mauling actor/television host Vhong Navarro, also owns the Waste Management Incorporated, managing director of Colossal Mining Corp. and president of Phil-Asia Dredging and Reclamation Corp.
The BIR also filed P2.93-million tax evasion complaint against Philippine Medical Association (PMA) president Dr. Leo Olarte, weeks after the agency released a newspaper advertisement depicting doctors as a burden to other taxpayers.
Olarte slammed the advertisement for showing doctors as tax cheats but BIR Commissioner Kim Henares said the portrayal was based on various complaints received by the agency that doctors were not issuing receipts.
Senator Nancy Binay filed a resolution early this month seeking an investigation into the BIR's shame campaign against tax evaders. The BIR expects to raise P1.456 trillion this year. (Sunnex)