BIR loses P7 billion tax evasion case

Published September 27, 2018, 6:05 PM

by Roel Tibay

By Jun Ramirez

The Bureau of Internal Revenue (BIR) has lost its bid to send to jail and collect more than P7 billion in deficiency taxes from a Metro Manila businessman.

BIR logo and building (Manila Bulletin file photo)
(Manila Bulletin File Photo)

The Court of Tax Appeals (CTA) en banc upheld the decision of one of its divisions dismissing the tax evasion case filed against Macario L. Gaw of Corenthian Village, Quezon City arising from the buy and sale of some 19 hectares of reclaimed land at the Manila Bay area in Parañaque City.

The full court stated that it had not acquired jurisdiction over the case due to faulty certification or verification attached to the BIR’s petition for review.

In a 17-page resolution, the court noted that the certification cited an issue not related to Gaw’s case and did not even rectify the error “a sufficient ground for the dismissal of the case.”

Earlier, the court’s First Division dropped the tax evasion case against the businessman for alleged non-payment of deficiency income and value-added taxes due to unverified audit report on the taxpayer’s financial statements.

Reports showed Gaw bought 10 parcel of lands along Roxas Boulevard’s foreshore in Parañaque between 2007 and 2008 for P4.1 billion and sold the same eight months later for P8.4 billion.

The Parañaque revenue district office issued Certificate Authorizing Registration (CAR) after Gaw paid the six and 1.5 percent capital gains and documentary stamp taxes, respectively.

But the BIR tax fraud division stated that the businessman should have been slapped with the higher 12 percent VAT and 32 percent income tax as the prime real estate was part of Gaw’s ordinary assets used in business.

The court’s First Division apparently agreed with Gaw’s contention that the transaction was subject only to CGT as the property was capital asset not used in business.

Gaw said he was not into real estate but in packaging and taxi operations.