Pagcor ‘coffee queen’ sued

The woman who sold P700 million worth of coffee at state-run casinos during the Arroyo administration may be having sleepless nights these days.

Carlota Cristi Manalo-Tan was charged on Thursday with tax evasion for failing to pay P59 million in taxes despite her substantial earnings as a coffee concessionaire of Philippine Amusement and Gaming Corp. (Pagcor).

Tan, owner of Promolabels Specialty Shop, was the coffee concessionaire operator of Figaro coffee shops in seven Pagcor casinos until last year.

The Bureau of Internal Revenue (BIR) also identified Tan, a resident of Barangay Bancal, Carmona, Cavite province, as the operator of the Carmona Race Track.

BIR Commissioner Kim Jacinto-Henares said at a press conference that Tan willfully attempted to evade paying taxes and deliberately failed to supply correct information in her income tax returns (ITRs) in 2003 and 2004.

At the Department of Justice where the BIR filed the tax evasion charges, Henares said Tan’s dealings with Pagcor earned her as much as P36.72 million in 2003 and P70.24 million in 2004, or a total of P106.96 million.

“Despite earning said substantial income from Pagcor, Tan failed to supply correct and accurate information on the actual income she received in her ITRs for taxable years 2003 and 2004. In 2003, she reported only P16.06 million in her return and a measly P25.82 million in 2004, or a total of P41.88 million,” a BIR statement read.

Tan underdeclared her sales by P20.66 million and P44.43 million in 2003 and 2004, respectively, the BIR said.

Substantial under declaration

Tan’s tax liability of P59 million, which includes surcharges and interest, was broken down as follows: P19.67 million in 2003 and P39.33 million in 2004.

The BIR said that under the tax code, an underdeclaration of taxable sales of more than 30 percent is considered “substantial underdeclaration and constitutes prima facie evidence of fraud tantamount to tax evasion.”

Henares said the BIR would have filed more than two cases after President Aquino’s Pagcor coffee exposé had Tan not amended several of her other ITRs.

P1B for coffee

In his second State of the Nation Address on July 25, Mr. Aquino said the P1 billion that the previous management of Pagcor had spent on coffee was one of the cases of abuse of power that his administration wanted to address.

Promolabels cornered P700 million of the gaming firm’s P1-billion expenditure for coffee, Pagcor chair Cristino Naguiat Jr. said last week. The coffee was given free to casino players from 2001 to June last year.

Each cup of coffee paid for by Pagcor cost 64 percent more than that served in other Figaro branches, according to a Commission on Audit report.

Naguiat also said that Carlota Tan signed the concessionaire contracts using her nickname and maiden name, “Lot Manalo.” He considered this a sign of deceit.

Tan amended her ITRs for 2001, 2002, 2005, 2007 and 2010 on Friday and paid taxes at a bank, Henares said.

“The only amount she paid for all those years was a little over P1 million,” Henares said.

Books to be checked

The BIR chief said Tan’s ITRs would still be audited and investigated.

“What she did when she amended the returns (was) she increased the gross sales but she also increased the expenses. So for us to determine whether those expenses were valid or not, we have to audit her, examine her books. That is the next step we are going to be doing,” Henares said.

Highly anticipated

In a statement e-mailed to the media, Tan’s lawyer, Lorna Kapunan, said the filing of the tax evasion charges was “highly anticipated.”

Kapunan said her client was ready to answer the BIR’s complaint “with the end view of reconciling whatever discrepancies the agency may have overlooked in the process of their review and study.”

“The case stemmed from the alleged ‘failure’ of my client’s company, Promolabels Inc. to supply the BIR ‘correct and accurate’ information in her income tax returns. As in any other case filed by the BIR, this remains subject to further clarification and review,” the lawyer said.

Kapunan said her client’s company filed its income taxes in 2003 and 2004.

Highly disputable

“The supposed P59-million estimated income liability remains highly disputable and should be subject to further clarification and review,” she said.

At the justice department, Henares declined to say if Tan’s husband, Johnny, was also being investigated by the BIR, noting that this was “confidential.”

Johnny Tan’s Kilton Motor Corp. supplied Pagcor with vehicles, metal detectors, stickers, generators and other equipment worth P21.4 million when Efraim Genuino was the Pagcor chair.

The businessman also received P650,000 in sponsorship grants from Pagcor for kart racing events in the provinces of Cavite and Batangas and Clark Field from 2008 to 2010.

Besides being the owner of Promolabels, Carlota Tan was an incorporator of Big Shot Bingo Corp., which obtained a license from the previous Pagcor board to operate nine bingo parlors and five electronic bingo games in 12 shopping malls in Metro Manila and several provinces.

Respondents in plunder case

Her husband was an incorporator and the second nominee of the Bida party-list group which took part in the 2010 elections. Genuino’s daughter, Sheryl See, was Bida’s first nominee.

The other day, Carlota Tan and her husband denied being cronies of Genuino.

Johnny Tan and the Genuinos were among the respondents in the P186-million plunder case Pagcor filed in the justice department in connection with the use of Pagcor funds for Bida’s election campaign.