Power coop faces tax evasion rap | Sun.Star.

By JM Agreda

BAGUIO CITY – The Bureau of Internal Revenue (BIR) filed tax evasion charges against the Benguet Electric Cooperative (Beneco) for allegedly under declaring the value of two lots bought in 2009.

BIR Commissioner Kim Jacinto Henares together with BIR-Cordillera Administrative Region (CAR) Regional Director Eduardo Bajador filed the charges Thursday at the Department of Justice.

Beneco faces two counts of willful attempt to evade or defeat withholding and documentary stamp taxes.

The cooperative was also charged with two counts of deliberate failure to supply correct and accurate information in the Withholding Tax Remittance Return and Documentary Stamp Tax Declaration and for failure to withhold the correct amount creditable withholding taxes in violation of the Tax Code of 1997.

BIR-CAR records showed Beneco purchasing from Equitable PCI Bank (now Banco De Oro) two lots along South Drive covered by a Deed of Sale dated December 2, 2009 indicating the price of the lots at P85 million.

With this sale, Beneco allegedly only paid P5.1 million in withholding taxes and P1.28 million in documentary taxes.

The bureau, however, discovered through routine evaluation, additional creditable withholding tax of P182,928 and documentary stamp taxes of P45,810.18 were paid based on the zonal valuation of the properties estimated at P88.05 million.

BIR obtained copies of the Transfer Certificates of Title and Deed of Absolute Sale from the Registry of Deeds, Beneco Board Resolution, and Escrow Agreement entered into by Beneco, BDO, the Estate of Fernando and Bernardina Jacinto, and Ramon Jacinto all indicating a selling price of P183.45 million for the subject properties.

This was further corroborated by a full-page ad published by Beneco in a community newspaper stating it acquired the properties for P183.45 million of which P85 million and P98.45 million were paid to BDO and the Jacintos, respectively.

After investigating the alleged elaborate scheme to under declare and conceal the true selling price of the lots, and deducting the previously paid taxes, the bureau determined the tax liability of the power utility firm from the transaction at P14.59 million in withholding and documentary stamp taxes inclusive of surcharges and interests.

The case against Beneco is the forty-ninth case filed under the Run After Tax Evaders program of the BIR under the Aquino administration.
Beneco, meanwhile, in an official statement from its legal counsel Delmar Cariño, said it has yet to receive a copy of the complaint.

“The news says it’s about the South Drive lots. The records would show that our transactions were above board,” Cariño said.

“We are surprised at the filing because based on the latest letter we received from BIR, we [were] still asked to reply and we have yet to receive the assessment,” he added.

Published in the Sun.Star Baguio newspaper on June 11, 2011.