BIR goes after coffee firm for P10B

Bureau of Internal Revenue. AFP PHOTO

MANILA, Philippines–The Bureau of Internal Revenue (BIR) on Thursday filed a complaint with the Department of Justice against the distributor of a popular coffee product and its retailer for failing to pay taxes amounting to almost P10 billion.

The BIR claimed that the Pasig City-based TriDharma Marketing Corp., the distributor of Kopiko products, among others, had committed tax evasion by underdeclaring its income and overstating its expenses for taxable year 2010.

Included in the complaint are TriDharma president and CEO Rene de la Calzada, treasurer Michael Lu and general Ramona Marie Tan, along with accountant Mailene Sigue Bisnar, who certified the firm’s financial statements in 2010.

TriDharma declared a net income of P211.44 million in its 2010 ITR but in reality earned P5.296 billion—an underdeclaration of 2,404.85 percent, according to the BIR’s calculation.

Breakdown

The company and its officers were sued for an aggregate tax liability amounting to P4.47 billion, inclusive of surchages and interest, broken down into P3.17 billion in income taxes, P1.3 billion value-added taxes, P2.73 billion withholding taxes on compensation, P0.87 million documentary stamp taxes, and P2.24 million expanded withholding taxes.

In a statement Thursday, De la Calzada said there was “no tax evasion case as alleged” and that “strict compliance with all Philippine laws is the No. 1 priority of TriDharma.”

“We found large discrepancies in the BIR assessment, so we filed a petition with Court of Tax Appeals to look into the matter…We are waiting for the resolution of the Court of Tax Appeals before we pay our taxes,” De la Calzada said.

The BIR used in its investigation into TriDharma the documents on P4.94 billion worth of purchases that the company made with the Manila-based Etheria Trading.

The BIR also filed a complaint against Etheria and its owner, Carlos Ching, for a total tax liability for P5.28 billion for 2009 and 2010, following an investigation into the company.

According to the complaint, Ching received income from sales made to TriDharma amounting to P1.8 billion in 20009 and P4.94 billion in 2010. However, Ching allegedly failed to declare the sales in his income tax returns for the two years.

The trader was sued for tax liabilities amounting to P5.28 billion, inclusive of surcharges and interest, broken down into P4.75 billion income tax and P0.53 billion VAT.

The BIR said that under the Tax Code, the under-declaration of taxable income by more than 30 percent is considered substantial and constitutes a prima facie case of fraud tantamount to tax evasion.