Food supplement firm charged with tax evasion

MANILA, Philippines – The Bureau of Internal Revenue (BIR) on Thursday, August 6, filed tax evasion charges against ABS Gen Herbs International Corporation (ABS Gen), the manufacturer of herbal supplements endorsed by some well-known personalities.

The BIR filed tax evasion raps  with the Department of Justice against ABS Gen for deliberately failing to supply correct and accurate information in its value added tax returns (VATR) for the fourth quarter of taxable year 2009; first, second, and fourth quarters of taxable year 2011; and 4 quarters of taxable years 2010, 2012, and 2013, in violation of the Tax Code.

ABS Gen chairman and president Paul R. Gupana and treasurer Grace G. Gupana were charged for the same violation.

BIR sent access letters to ABS Gen clients – Mercury Drug Corporation (Mercury Drug) and Getz Bros Philippines, Incorporated (Getz Bros) – which both issued certifications on the amount of income payments and taxes withheld they made for the account of ABS Gen for taxable years 2009 to 2013.

Investigators likewise discovered that ABS Gen failed to file its VATRs for the first 3 quarters of taxable year 2009, and failed to declare its true and correct income in its VATRs for 16 quarters from the fourth quarter of 2009 to the fourth quarter of 2013, except the third quarter of taxable year 2011.

A comparison of the income payments ABS Gen received from Mercury and Getz Bros with its VATR sales declarations with the BIR disclosed that ABS Gen had substantially underdeclared its correct taxable sales by:

• P37.72 million ($824,071.21) in 2009
• P11.82 million ($258,293.59) in 2010
• P3.58 million ($78,197.70) in 2011
• P4.08 million ($89,110.95) in 2012
• P5.11 million ($111,668.73) in 2013

As a consequence, ABS Gen and its responsible corporate officers were  sued for an aggregate deficiency VAT liability of P18.88 million ($412,586.80), inclusive of surcharges and interests.

ABS Gen is a domestic corporation primarily engaged in the business of trading and/or direct selling of goods such as processed foods, general merchandise on wholesale and retail basis, including exports and imports. Its endorsers, still posted on its website, include the late health secretary Juan Flavier and singer Nonoy Zuñiga.

The case against ABS Gen, together with its responsible corporate officers, is the 383rd filed under the Run Against Tax Evaders (RATE) program of the BIR. – Rappler.com

$1 = P45.76