Cedric Lee blames accountant on tax evasion case

By: Tetch Torres-Tupas - 11 years ago

PHOTO BY TETCH-TORRES TUPAS/INQUIRER.net

MANILA, Philippines—Businessman Cedric Lee on Thursday denied that there was deliberate effort on his part to evade payment of taxes or hide the true income of Izumo Contractors Inc., of which he is the President.

In his counter-affidavit submitted Thursday, Lee said it was their Chief Accountant Susan Nace who prepared the working papers for the financial statements of Izumo for audit purposes and filing of the income tax returns for 2006, 2007, 2008 and 2009.

“I do not have personal knowledge on the release of disbursement vouchers in favour of the corporation, nor issuance of official receipts for the actual collection,” Lee said in his counter-affidavit.

“I have no personal knowledge as to the actual revenues collected per billings made by the accountant for a certain period. To reiterate, the accountant of the Corporation prepared the Financial Statements and filed the ITRs,” Lee said.

“I heavily relied in the trust and confidence reposed on our accountant who had been employed with the corporation for several years,” he added.

Lee together with chief operating officer John K. Ong and Finance Officer Judy Gutierrez Lee of Izumo Contractors have been slapped with a P194.47 million tax evasion case.

Access letters were sent to Izumo’s clients to determine its true income. Replies from its clients in the form of certification showed that Izumo received a total amount of P302.63 million in income payments.

Further investigation showed that Izumo declared P5.54 million in its ITR in 2006; P9.14 million in 2007; P21.34 million in 2008 and P40.20 million in 2009. Certifications from its clients, however, showed that its income in 2006 was P94.33 million; P46.07 million in 2007; P30.83 million in 2008 and P131.49 million in 2009.

The BIR said Lee’s company under-declared its income by 404 percent.

Under Section 248 of the Tax Code, 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.