BIR sues Makati cake shop for P47M

Bureau of Internal Revenue building. AFP FILE PHOTO

MANILA, Philippines–The former supplier of the birthday cakes that Makati City gives its senior citizens, who is also alleged to be Vice President Jejomar Binay’s front for a real estate property in the city, has been charged by the Bureau of Internal Revenue (BIR) with not paying the correct taxes for his business.

In a criminal complaint filed in the Department of Justice on Thursday, the BIR sued Kim Tun S. Chong, proprietor of Cups & Mugs Kitchenette and Catering Services, for willful attempt to evade or defeat taxes and deliberate failure to supply correct and accurate information on his annual income tax return from 2009 to 2011.

Cups & Mugs was dragged into the Senate investigation of alleged irregularities in Makati City during Binay’s term as mayor after its proprietor was said to be fronting for the Vice President.

Cups & Mugs supplied the birthday cakes for Makati’s seniors until February. Although no longer supplying the cakes, it still manages the Makati City Hall cafeteria and provides daily meals to patients of Ospital ng Makati.

The BIR in a statement said that despite its investigation showing that Cups & Mugs took in P107.64 million from 2009 to 2011, Chong “substantially underdeclared” his correct income and “deliberately” failed to pay the right taxes.

He reportedly declared a total gross income of only P42.23 million for the three-year period.

Aside from tax evasion, Chong was also sued for an aggregate income tax liability of P46.60 million.

Cups & Mugs shares the same address with a carinderia at 2650 Agutaya St., Barangay (village) Pinagkaisahan, Makati.

In his testimony before the Senate blue ribbon subcommittee, former Makati Vice Mayor Ernesto Mercado said Chong was one of the fronts for Binay’s alleged ownership of a 8,877-square-meter lot and building on J.P. Rizal Extension corner Sampaguita Street in Makati.

Binay has denied the allegations against him, calling them part of the campaign of his political opponents to destroy him.

Mercado and other former Makati officials have also claimed that Binay received kickbacks from rigged contracts of infrastructure projects of the city, including the Makati City Hall Building II, and that he owns a 350-hectare farm in Batangas.