Couple in tax credit scam charged with tax evasion
Philippine Daily Inquirer
First Posted 07:19:00 07/25/2008
MANILA, Philippines—The Bureau of Internal Revenue has filed 10 counts of tax evasion against Faustino and Gloria Chingkoe, suspects in the tax credit scam of the late 1990s, for failing to pay tax on income they derived from the illegal sale of fraudulently obtained tax credit certificates.
“Any income, even those made illegally, are subject to income tax,” said BIR Deputy Commissioner Gregorio Cabantac in a statement.
Cabantac said the tax evasion cases stemmed from the failure of Chingkoe-owned companies, registered as garments manufacturers, to pay tax on income derived from selling the tax credit certificates to oil companies Shell and Petron in the late 1990s.
The unpaid tax liabilities of the Chingkoe-owned companies amount to P82.09 million, the BIR said.
The Chingkoe couple have been charged in the tax credit scam cases but have avoided prosecution by living in foreign countries.
Slow justice
Felix Chingkoe, a brother of Faustino and the government’s main witness, has expressed dismay over the slow progress of the court cases which he said have taken so much of his time.
Cabantac said if the government has been unsuccessful in obtaining a court conviction of the Chingkoes, it is hoping to get another shot at making them pay for their “crimes” by pursuing the tax evasion cases against them.
The Chingkoe couple are the major suspects in the tax credit scam of the mid-1990s, in which some 64 companies they owned obtained through fraudulent means tax credit certificates worth about P5.3 billion which were sold to other companies which then used them to pay their tax obligations.
Tax credits are refund payments that export companies are allowed to claim for duties paid on imported materials used for the manufacture of products for export. Instead of a cash refund, the government issues certificates, the TCCs, which companies can use to settle tax obligations. The companies are also allowed to sell the TCCs to other companies.
The Chingkoe-owned garments firms that sold the fraudulently obtained tax credit certificates were: Master Colour Systems, Fiber Technology Corp., Spintex, and Jantex Philippines.
Shell and Petron, among other companies that bought TCCs from the Chingkoe-owned companies, used the fraudulently secured TCCs to pay for their tax obligations, resulting in losses for the government.
The BIR also filed Thursday tax evasion charges against officials of Prestige Brands Phil. for allegedly failing to pay income tax worth P33.668 million from 2000 to 2002. Michelle V. Remo
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