Toshiba in tax trouble in Philippines

MANILA, Philippines – The local unit of Japanese giant Toshiba is facing tax evasion charges from the Philippines’ tax agency.

On Thursday, August 2, the Bureau of Internal Revenue (BIR) said in a statement it has filed a criminal complaint for tax evasion against Toshiba Plant Systems and Services Corp. Philippines) and two company executives before the Department of Justice over 2007 tax payments.  

The BIR is seeking P58.11 million in uncollected tax payments, which represent the balance not covered by the funds already garnished from the bank accounts of the Paranaque-based Toshiba unit.

The BIR said it has previously garnished Toshiba’s funds from 5 banks, namely Banco de Oro, the Bank of Philippine Islands, China Banking Corporation, Metropolitan Banking Corporation and United Coconut Planters Bank, but only P136,364.47 was collected.

The electronics company’s troubles started it ignored BIR’s Letter of Authority in August 2008 to examine the company’s books for 2007. The company likewise ignored a subpoena issued last February 12, 2009, prompting BIR to file charges against company executives, namely Toshiba Plant general manager Akio Sugawara, and its resident agent, Rodolfo M. Bausa.

The BIR said that when it finally conducted an audit of the factory in Better Living in Paranaque City after a some evidence was presented to the company, the tax investigators discovered the following: P4.22 billion of unreported sales in 2007, and P27.7 million unsupported carry-over losses in 2006.

These resulted in a total of P58 million tax deficiency broken down as follows: P385 million in income tax and P190.8 million in withholding tax.

The BIR said Toshiba did not contest this, yet still failed to pay despite several notices and warrants of seizure and garnishment.

“Despite such repeated demands and lapse of considerable length of time, Toshiba has obstinately failed and adamantly refused to pay its long overdue deficiency tax assessments for 2007 to the prejudice of government,” the BIR said.  

This case is the 118th filed under the Run After Tax Evaders (RATE) program of the BIR, which is aiming to improve efficiency of tax administration in the country. – Rappler.com