Tax evasion raps vs. Calata dismissed
Calata president Joseph Calata
THE DEPARTMENT of Justice has dismissed tax evasion charges filed by the Bureau of Internal Revenue against Joseph Calata, president and chief executive officer of agriculture products distributor Calata Corp.
In a resolution dated June 8, a copy of which was disclosed by Calata to the Philippine Stock Exchange on Monday, the DOJ found “no sufficient evidence” of the two counts of tax code violation charged by the BIR.
The BIR alleged that Calata had wilfully attempted to evade and defeat his tax liability and deliberately failed to supply correct and accurate information in his annual income tax return for taxable year 2011.
For taxable years 2009 and 2010, Calata paid P10,000 in taxes while in 2011, he paid only P100,000 despite a huge increase in his paid-up capital investment in Calata from P600,000 in 2010 to P217.7 million in 2011.
From 2005 to 2011, Calata’s reported income amounted to P2.76 million whereas investments for 2011 amounted to P217.1 million. As such, the BIR had said his declared income was not adequate to justify the amount of additional investments he made for 2011.
For his part, Calata argued that BIR had failed to attach the 2011 income tax return as well as relevant certificate in its complaint, instead relying heavily on the General Information Sheet for 2011 filed by Calata Corp. at the Securities and Exchange Commission.
Calata said the BIR had erred in its assumption that the money he used to acquire additional capital investments constituted unreported income for 2011. He had argued that the money was sourced from several loans, consolidated in seven promissory notes/cash vouchers taken from his mother Isabel Calata from April to July 2011 for a total amount of P232 million.
The BIR doubted the mother’s capability to lend such huge amount, as she has had no history of income tax payments in Bulacan.
But the DOJ resolution said that after a careful analysis of the evidence and applicable laws, it found “insufficient evidence” to charge respondent for violation of the National Internal Revenue Code (NIRC).
It also noted that Calata had submitted evidence to show that documentary stamp taxes (DST) returns were filed on loans taken from his mother and corresponding taxes paid, although belatedly complied with.
The DOJ added that the respondent appeared to have evidence to establish that the alleged undeclared income was proceeds of the loans, “hence there is no sufficient basis to establish probable cause against him for violations” of the NIRC./rga
