Corpus Christi School charged with tax evasion-A A +A
Saturday, August 24, 2013
TAX evasion raps worth P14.5 million were filed with the Department of Justice on Thursday against the officials of Corpus Christi School (CCSI) in this city and an accountant for failing to pay the correct dues to the government in 2010.
Charged by the Bureau of Internal Revenue (BIR) were Alfonso del Fierro Jr. (president), Mark Alfonso del Fierro (chief financial officer) and Elpedio Cuay (independent accountant), who certified the 2010 financial statements of CCSI despite "essential misstatement" of facts related to the school’s landholdings and taxable income.
Records show that CCSI, which offers elementary and high school education, bought a 10,000 square-meter property in the city for P23 million on February 18, 2010.
CCSI, however, only declared a net income of P2.175 million for 2010 and a combined net income of some P15 million for the previous years.
"None of the P33.76 million expenses stated in the 2010 ITR (income tax return) of CCSI referred to the said land acquisition. Neither was there an increase in the value of the property and equipment of CCSI for the same year," the BIR said.
To arrive at CCSI's liability, the BIR used the expenditure method, which states that if one’s expenditures exceeded the reported income for a given year and the source of the funds to make the expenditures was unexplained, such expenditures represented unreported income.
As a result, the non-sectarian privately owned school allegedly under declared its income by 64 percent after comparing the undeclared acquisition of P23 million and reported income (tuition) of P35.94 million.
The BIR said CCSI is not exempted from income tax because it distributed dividends in 2007 and 2008.
Thus, it should be considered an ordinary domestic corporation subject to the 30 percent tax rate and not covered by preferential tax rate of 10 percent imposed on private educational institutions.
"Having declared revenues from tuition, documents will however show that CCSI realized additional income, which it did not declare in its 2010 ITR and financial statements, amounting to P23 million. This amount is more than 50 percent of the total gross income derived by CCSI from all sources, making CCSI liable to pay income tax at the rate of 30 percent," the BIR said.
In a news report posted by dxRU Radio Ultra on its Facebook page Friday afternoon, Del Fierro said he was dismayed by the BIR's procedure of filing a tax evasion case against him and other officials of the school because until now they have not received any written notice from the bureau.
Del Fierro said the absence of a formal letter from the BIR has put them in an unclear situation, adding that in the 37 years of CCSI’s existence, they have not been involved in tax evasion case by the BIR, until now.
In a statement over ABS-CBN’s TV Patrol Friday afternoon, Del Fierro said it is not the intention of CCSI to renege on its responsibility as taxpayer.
He said they did not declare the lot they purchased as they assumed there was no need to do so.
At press time, the CCSI management tried to talk with the BIR regarding the case, del Fierro said.
For its part, the BIR District Office No. 98 based here is not aware of the tax evasion case filed against CCSI.
District Revenue officer Samson Carcueva told Radio Ultra that the bureau’s National Investigation Division under the leadership of Commissioner Kim Henares was the one who initiated the filing of the case.
Carcueva said what happened to CCSI should serve as an example to all taxpayers that the BIR is serious in its drive to go after tax evaders as it wants everyone to pay their taxes
This paper tried to get comments from CCSI, Marla Del Fierro-Quaioit told Sun.Star Cagayan de Oro that CCSI sent its email to this paper, but with the erratic internet connection on Friday it didn’t reach to this paper’s inbox. (With report from Sunnex)
Published in the Sun.Star Cagayan de Oro newspaper on August 24, 2013.