BIR files P360-M suit vs QC firm

Bureau of Internal Revenue building. AFP FILE PHOTO

The Bureau of Internal Revenue (BIR) on Thursday filed a P360-million tax evasion suit in the Department of Justice against a Quezon City-based multilevel marketing company that allegedly failed to accurately report its sales from 2011 to 2013.

The BIR accused Royale Business Club International Inc. of willfully attempting to evade or defeat tax, and deliberately failing to supply correct and accurate information on its annual income tax returns and quarterly value added tax returns as defined under Sections 254 and 255 of the 1997 National Internal Revenue Code.

Royale was sued for an aggregate deficiency tax liability totaling P359.75 million—including surcharges and interests—broken down into P135.87 million for 2011; P115.39 million for 2012 and P108.49 million for 2013.

Also charged with the same offenses were the company’s president Julius Allan Nolasco, vice president for finance and treasurer Isa Angela Bautista, assistant treasurers Jeanette Maghirang and Imelda Pedron, and assistant accounting manager Marjorie Molina.

Royale, which holds office at 1363A Quezon Ave., West Triangle in Quezon City, markets and distributes consumer products such as food supplements, cosmetics, pharmaceuticals and beverages.

In its investigation, the BIR said, the bureau sent access letters to banks, including the Bank of the Philippine Islands, Metrobank and Banco de Oro which replied that they paid Royale P141.60 million, P468.55 million and P171.07 million, respectively, during the three-year period.

Based on this information, the BIR said in its complaint that Royale received income payments from the banks amounting to P190.79 million in 2011; P236.38 million in 2012, and P354.06 million in 2013.

However, revenue investigators noted that in its income tax return, Royale declared gross sales totaling only P39.14 million in 2011; P106.69 million in 2012 and P196.68 in 2013, thus “substantially under-declaring” its correct taxable sales by 387 percent or P151.64 million for 2011, by 122 percent or P129.69 million for 2012, and by 80 percent or P157.38 million for 2013.

The case against Royale was filed by the BIR in line with its “Run After Tax Evaders (Rate)” program.