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BIR sues doctor, businessman, lawyer

By: - Reporter / @NikkoDizonINQ
/ 02:46 AM September 30, 2011

Stepping up its campaign against professionals who have not been paying the correct taxes, the Bureau of Internal Revenue (BIR) on Thursday filed tax evasion charges against a pediatrician and her husband, a lawyer and a businessman.

Two weeks ago, the BIR also charged an election lawyer, a bank lawyer, a neurologist and a dermatologist with tax evasion.

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The BIR recently discovered that spouses Marcelle Marie Palanca Tan-Chen and SW Tenglee Tengsico Tan issued official receipts to only two of their 920 patients from July to August this year.

For this unlawful practice, the couple were the subject of a criminal complaint the BIR filed in the Department of Justice.

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BIR Commissioner Kim Jacinto-Henares also filed tax evasion complaints against lawyer Danilo Cariaga who reportedly received P2.43 million for his services for the Metropolitan Waterworks and Sewerage System (MWSS) in 2007.

Cebu-based businessman Nilo Alegado was charged in connection with a tax deficiency worth P102.9 million.

Life Force clinic

At a press conference at the justice department, Henares said the Tan couple were running the Life Force 1 Medical Clinic at Medical Plaza in Makati City.

Marcelle—also called Doctor Crickette—is a licensed pediatrician who has several medical clinics, while her husband is an alternative medicine practitioner, according to the BIR chief.

Under their Life Force clinic, Marcelle and her husband (alias Nigel T. Chen) provide alternative medical treatments and sell health supplements.

On August 23, the BIR conducted a surveillance of the Life Force clinic and discovered that Nigel was not a registered taxpayer.

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“Nigel Tan is not registered as [a] practising [doctor] or [registered to be] doing business,” Henares said at the press conference.

Moreover, Nigel was discovered to be using official receipts that were under the name of his wife, the BIR said in a statement.

Glaring discrepancy

The official receipts were also found to have been printed for the use of Marcelle’s clinic at Unit 1609 16/F in Medical Plaza.

“A comparison of the confiscated receipts being issued under the name of Marcelle and the appointment book showed a glaring discrepancy—[the] OR was issued to only two patients as against the appointment book which recorded 920 patients,” the BIR said.

As a result, the Tan couple accumulated up to P3.12 million worth of earnings in July and August this year.

“While Nigel registered as a local employee and filed tax returns in September 2011 after the surveillance and apprehension were conducted, [his actions] were merely an afterthought that did not cure the violations but merely enhanced the apparent use of deceit,” the BIR added.

Licensed professionals

Only 195,000 professionals have registered with the BIR as “self-employed,” but records of the Philippine Regulatory Commission (PRC) show that there are some 3 million licensed professionals in the country, according to Henares.

“Of course, that 3 million figure will go down. Remove the seamen and the nurses because they are usually employed by somebody [else]. But even if we halve the figure to 1.5 million, it is still very far from the 195,000,” she said.

If half the 1.5 million professionals are employed abroad, the remaining 750,000 show that there are “really a lot of professionals who are engaged in business by practicing their profession and who are not registered and are not paying taxes,” Henares said.

She said in July that, based on income levels, professionals should be paying an average P100,000 in taxes  each—a gap that indicated a 90-percent tax evasion rate among doctors, lawyers, accountants, engineers, architects and entertainers, among others.

Underdeclaration

As for Cariaga, the BIR said that despite his multimillion-peso earnings in 2007 from the MWSS, he  declared a total income of only P220,456 in his Income Tax Return (ITR), failing to “supply the correct information… by more than 30 percent.”

“Under Section 248 of the Tax Code, an underdeclaration of taxable income of more than 30 percent is considered substantial underdeclaration and constitutes prima facie evidence of fraud tantamount to tax evasion,” the BIR said.

The acting manager of the MWSS finance department provided the information on how much the agency paid Cariaga. He submitted the pertinent disbursement voucher and check to the BIR.

The BIR said Cariaga, a resident of Villa Aurora Townhomes in Quezon City, had a total income tax deficiency of P1.39 million for 2007.

He also failed to pay his value-added tax returns for 2007, amounting to P557,036.25, inclusive of surcharges and interests. This raised Cariaga’s total tax liability to P1.95 million.

New Store

As for businessman Alegado, the BIR said he failed to provide the correct information in his ITR for 2009, declaring only P4.33 million worth of sales while he actually earned P183.94 million.

“[The] total percentage of underdeclaration of sales per investigation is 4,143.34 percent,” the BIR said in its statement.

Alegado is the sole proprietor of New Store, a duly registered business engaged in renting real estate and selling rice, the BIR said.

His business is located at the public market in Poblacion Oriental in Consolacion, Cebu province.

The BIR was able to determine from records of the National Food Authority that Alegado imported rice worth P183.01 million in 2009.

“A comparison of the same amount with the declaration of Alegado in his ITR and audited financial statements for the same year filed with the BIR revealed purchases of just P3.41 million, a huge discrepancy in the total amount of P179.60 million which is tantamount to under-declared sales,” the BIR said.

Alegado’s tax deficiency amounted to P102.94 million, inclusive of surcharges and interests, the bureau said.

Husband of mayor

Consolacion Mayor Teresa Alegado denied her husband had failed to pay the correct income tax in 2009.

“We pay our taxes religiously to the government,” Mayor Alegado told the Inquirer in a phone interview.

The mayor said the media would not have taken up the matter if her husband was just an ordinary businessman. “Please respect our privacy,” Mayor Alegado said.

She said that in the 30 years she and her husband had been doing business, this was the first time that they were accused of tax evasion.

Mayor Alegado maintained that their transactions were legal, adding that they had the records to show that they had declared all their imports.

In fact, she added, several banks trusted them because of their good business record.

“They have left the smugglers alone while singling us out although we have not done anything wrong,” the mayor said.

Pin down smugglers

She called on the BIR to pin down the smugglers and not the legal rice traders who were religiously paying their taxes.

“Honestly, we did not cheat the government,” the mayor added.

She said she and her husband imported around 100,000 bags of rice worth over P100 million but stressed that they paid the correct taxes.

The mayor was the national executive president of the Confederation of Grains Retailers Association of the Philippines, Inc. before she was elected chief executive of Consolacion town in 2010.

She ran under the Liberal Party and used the slogan “genuine change, honest, credible and sincere service to the people” in her campaign. With a report from Jhunnex Napallacan, Inquirer Visayas

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TAGS: BIR, Crime, Danilo Cariaga, Government, Justice, law, Marcelle Marie Palanca Tan-Chen, Nilo Alegado, SW Tenglee Tengsico Tan, Tax, Tax evasion
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