Camp John Hay firm slapped with P88.5M tax evasion case

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Camp John Hay firm slapped with P88.5M tax evasion case
The BIR has filed a tax case against the company for its failure to supply correct and accurate information in its income tax returns

MANILA, Philippines – The Bureau of Internal Revenue (BIR) has slapped an P88.54 million ($2,008,888.65) tax case against Camp John Hay Leisure Incorporated (CJHLI).

The BIR alleged that CJHLI,  which manages hotels such as Camp John Hay Manor in Baguio City, had willfully attempted to evade tax payment and failed to supply correct and accurate information in its income tax returns (ITRs).

Also included in the BIR’s complaint are the company’s president, Alberto Avanceña, and financial controllers Rialena Magat and Rodeen Corpuz.

To derive the actual income received by the company, investigators sent access letters to the BIR’s Information Systems Development and Operation Service (ISDOS) and to Camp John Hay (CJH) Hotel Corporation, a business entity that engaged the services of CJHLI.

In reply, ISDOS provided copies of CJHLI tax returns and alphalists submitted by its various withholding agents.

For its part, CJH Hotel Corporation furnished copies of its alphalists of payees subject to expanded withholding tax and annual information return of creditable income taxes withheld (expanded)/income payments exempt from withholding tax.

Discrepancies

When compared and evaluated, the documents gathered showed that CJHLI had a gross income of P34.53 million ($783,040.07) in 2006; P40.92 million ($928,272.26) in 2009; P39.76 million (901,957.60) in 2010; and P44.52 million (1,009,973.16) in 2011.

However, the respondent only declared P8.95 million (202,929.85) in 2006; P11.60 million ($263,038.36) in 2009; P11.33 million ($256,915.92) in 2010; and P12.65 million ($286,848.03) as gross income.

This means that CJHLI underdeclared its gross income by 286% in 2006; 253% in 2009; 251% in 2010; and 252% in 2011.

Under the Tax Code, an underdeclaration of taxable income by more than 30% constitutes a prima facie case of fraud.

Thus, CJHLI was sued for an aggregate tax liability amounting to P88.54 million ($2,008,888.65), inclusive of surcharges and interests.

As for Camp John Hay itself, the Bases Conversion and Development Authority (BCDA) on February 23 pacified locators’ concerns over the fate of the site, that it is not closing the property and shutting down the businesses there.

BCDA is the government agency mandated to develop Camp John Hay, a former US facility.

On February 13, the members of an arbitration committee unanimously ordered CJH Development Corporation (CJHDevCo) to vacate Camp John Hay.

An arbiter also said CJHDevCo should pay BCDA the P2.4-billion ($54.43-million) obligation that it owed the state run firm in 2008. Rappler.com

 

US$1 = P44.09

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