DOJ OKs P1.3M tax evasion case vs ex-head of doctors’ group

MANILA, Philippines – The Department of Justice (DOJ) has approved the filing of a P1.3-million tax evasion case against former Philippine Medical Association (PMA) president Leo Olarte.

In a 19-page resolution released Wednesday, July 15, the department said Olarte “cannot escape criminal liability” for failing to file his income tax returns, as provided by the National Internal Revenue Code (NIRC) from 2006 to 2012:

• P319,072.16 in 2006
• P42,305.72 in 2007
• P38,808.19 in 2008
• P250,985.85 in 2009
• P191,301.01 in 2010
• P214,278.98 in 2011
• P299,522.57 in 2012

“Notwithstanding the fact that respondent’s compensation income was indubitably taxed on account of the taxes withheld which BIR failed to impugn, the former cannot escape criminal liability arising from his failure to file his income tax returns for the said period,” read the resolution approved by Prosecutor General Claro Arellano.

In 2014, the Bureau of Internal Revenue (BIR) filed the tax evasion complaint against Olarte, who was then still PMA president. 

During that time, his organization criticized a BIR advertisement that portrayed doctors as tax evaders. (READ: BIR ad on cheating doctors: A plan that backfired?)

BIR records showed the doctor had paid a withholding tax of P743,563.53 for the years 2006 to 2012, but the bureau alleged that Olarte failed to pay his ITRs during the same period even when he earned income from the exercise of his profession.

“Olarte adopted the scheme of ‘end-dating’ his records with the Integrated Tax System of the BIR to avoid detection of his non-filing of income tax return and the non-payment of income tax and thus, precluding the computer system from generating open cases against him,” the BIR said when it filed the case before the DOJ.

On Wednesday, the department noted that Olarte is not exempt from the filing of ITR. 

“Albeit the taxes withheld by various employers from compensation income, he is not exempt from the filing of ITR….Such failure to file income tax returns from 2006 to 2012 inclusive, albeit the taxes withheld therefrom by his employers constitutes existence of probable cause that he violated Section 255 of the said law.”

The DOJ, however, dismissed the BIR’s complaint against Olarte for violating section 254 of the NIRC or attempting to evade or defeat taxes.

“A second hard look at [the pieces of evidence] submitted by the BIR leads a reasonable mind to conclude that the charge on this score must fail considering that such evidence itself expressly provides that respondent had in fact filed his VAT (Value Added Tax) returns during the taxable period in question,” the resolution read. – Rappler.com