Tax evasion raps filed against Cagayan de Oro school


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MANILA, Philippines — Criminal charges have been filed against a Cagayan de Oro-based school that, despite claming to be a non-profit organization, paid its shareholders in the form of cash dividends in 2007 and 2008, the Department of Finance announced Thursday.

In a statement, the DOF said the Department of Justice filed tax evasion charges against the Corpus Christi School Inc. (CCSI), which was also found to have bought sizeable tracks of land despite having declared income that would have made the purchase impossible.

Those named in the suit were CCSI president Alfonso del Fierro Jr. and chief financial officer Mark Alfonso del Fierro. The company’s accountant Elpidio Cuay was also charged for certifying the company’s books “despite essential misstatement of facts related to his client’s corporate landholdings and the clear omission or misrepresentation of its actual taxable income,” the DOF said.

CCSI is registered as a non-stock non-profit domestic corporation primarily engaged in the business of providing elementary and secondary education, among others, with address at Tomas Saco Street, Macasandig, Cagayan De Oro City, Misamis Oriental.

Records of investigation showed that CCSI acquired a 10,000 square-meter property in Cagayan De Oro for P23 million.

Despite this acquisition in 2010, CCSI only declared a net income of P2.175 million for the same year and a combined net income of not more than P15 million for the past several years.

None of the P33.76 million expenses stated in the 2010 ITR of CCSI referred to that land acquisition. “Neither was there an increase in the value of the Property & Equipment of CCSI for the same year,” the DOF said.

The DOF said CCSI substantially under-declared its taxable income by 64 percent, and the discrepancy between its actual assets and declared income reached P35.4 million.

The DOF said the Bureau of Internal Revenue used its Expenditure Method, which stated 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.

Likewise, the DOF said since the CCSI distributed dividends during the years 2007 and 2008, it could not be considered a non-stock non-profit corporation exempt from income tax. The company cannot be considered as a non-profit educational institution covered by the preferential tax rate of 10 percent but as an ordinary domestic corporation subject to the 30 percent tax rate.

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  • Ed Molina

    way to go kim. i’m sure the senators and congressmen are very happy with what you’ve been doing for them.

  • drefaura

    Way to go BIR. I’m sure you’ll find a lot more non-profit and not-for-profit (read NGO) organizations that breach their mandate and pursue profit and profitable investments, AND pay dividends. One sign of a bogus organization is: a substantial portion of their income goes to salaries and commissions, and travelling/meal allowances AND taxable benefits like paid medical/dental coverages, huges bonuses, car allowances, etc. of its officers and directors.
    Believe me when I say that, because I’ve been involved in auditing non-profit, charitable, not-for-profit organizations and foundations (this one is distinct from the rest in these parts).

  • jiroarturo

    Wala ng bagong balita sa tax evasion ni Corona? Mickey Arroyo?

  • pening

    Thank you Kim and BIR, keep looking plenty of them.

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