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Thursday, October 13, 2005
Justice junks tax evasion case v. ex-agri chief
MANILA -- The Department of Justice (DOJ) dismissed Wednesday a P4 million tax evasion complaint filed by the Bureau of Internal Revenue (BIR) against former agriculture secretary Arthur Yap and his father Domingo, corporate owners of DHY Realty and Development Inc.
The DHY case is the first case lost by the BIR under its Run After Tax Evaders (Rate) program. Yap was the first Cabinet official to be included in the tax campaign.
The justice department, on the other hand, found cause in the filing of tax evasion charges against talent manager Douglas Quijano and Renato Herrera, owner of the herbal concoction "Glo Herbal," before the Court of Tax Appeals (CTA).
Quijano and his talent firm Harte Beest Entertainment Corp. were charged with four counts of alleged tax evasion amounting to about P13 million for the year 2000 to 2003 while Herrera was sued for alleged non-payment and non-filing of income tax returns amounting to P150 million in 2001 as well as alleged illegal use of a tax identification number (TIN).
In dismissing the tax charge against the Yaps, State Prosecutor Sebastian Caponong Jr. said the BIR failed to show sufficient evidence that will show the Yaps' alleged "actual attempt and willful failure to file the return and pay the taxes due."
The case stemmed from a complaint filed by the BIR against the Yaps last June over alleged non-payment of P4 million in documentary stamp taxes and creditable withholding taxes for DHY's purchase of a Pasig property in 1997.
Former BIR commissioner Guillermo Parayno Jr. earlier claimed that the Yaps allegedly paid only P18,500 as documentary stamp tax for a 3,716-square meter lot at the corner of Carucho Avenue and San Agustin Street in Pasig City valued at P20.6 million, by executing three "undervalued" absolute deed of sales.
The Yaps admitted having entered into two absolute deeds of sale--P12.7 million in January 1997 and P14.3 million in November the same year, but denied having a hand on the third deal--contentions that the state prosecutors have accepted.
The third declaration, made in September 1998, reflected a purchase price of only P1 million. It was crucial to the case as the Yaps allegedly managed to pay only P18,500 in documentary stamp taxes using the amount as basis.
Prosecutors gave credence to the Yaps' contention that the first two deeds of sale were the result of their continuing negotiations on the purchase price of the property.
"If the intention was really to lower the tax payment, why would respondents agree to increase the adjusted purchase price from P12,704,000 to P14,292,000 in the second deed of absolute sale? Indeed, we find it illogical for the respondents to subsequently agree to a higher amount," read the DOJ resolution, penned by Caponong.
The DOJ accepted the Yaps' argument that the third deed of absolute sale was a "forged document" which the former agriculture chief did not sign so that they could not be held liable for tax evasion.
Former secretary Yap, during the preliminary investigation, said DHY Realty entrusted the registration of all the transactions to their company lawyer Karlo Butiong and they were unaware that Butiong allegedly used a fraudulent deed of sale to pay lower taxes.
Chief State Prosecutor Jovencito Zuno said there is no prejudice to a re-filing of similar tax suits against Yaps if the BIR is inclined to do so.
"The BIR can re-file the case anytime. Even in a motion for reconsideration, they can introduce additional documentary evidence. That is without prejudice to the presentation of supplemental evidence," he said.
Earlier, the DOJ also dismissed a falsification charge filed against the former agriculture secretary and his father in connection with the displacement of market vendors in Pasig City after their company acquired the lot in 1997.
In a resolution, DOJ Undersecretary Ernesto Pineda dismissed a petition for review by a Pasig vendors' group assailing the dismissal by the Pasig Prosecutor's Office of the falsification charge.
The complainants had claimed that the DHY simulated the sale of the property to "create a fictitious ground in ejecting them from the subject property," arguing there was no real sale of the property.
"In the case at hand, the complainants were not able to successfully overcome the disputable presumption that the contract, dated Jan. 10, 1997, is valid and respondent Nestor Mendoza is authorized to act on behalf of Carlota Mendoza," said the resolution penned by DOJ Undersecretary Ernesto Pineda. (ECV/Sunnex)
(October 13, 2005 issue)
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