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Businessman Charged By The BIR With Tax Evasion For Undeclared Rice Importations

29 September 2011

The Bureau of Internal Revenue (BIR) today filed with the Department of Justice (DOJ) a criminal complaint against NILO H. ALEGADO (ALEGADO) for willful attempt to evade or defeat tax and deliberate failure to supply correct and accurate information in his Income Tax Returns (ITR) for taxable year 2009, in violation of Sections 254 and 255 of the NIRC of 1997, as amended.

ALEGADO is a sole proprietor duly-registered with the BIR whose business is located at Consolacion Public Market, Poblacion Oriental, Consolacion, Cebu. He is engaged in the business of renting of real properties and dealing of rice and operates under the name “New Store.”

Access to the records of rice importations at the National Food Authority (NFA) – such as the Memorandum of Understanding and Certificate of Turn-Over - showed that ALEGADO made importations for taxable year 2009 amounting to P183.01 million. A comparison of the same amount with the declaration of ALEGADO in his ITR and Audited Financial Statements for the same year filed with the BIR revealed purchases of just P3.41 million, indicating a huge discrepancy in the total amount of P179.60 million which is tantamount to undeclared sales per investigation.

Adding the declared sales of ALEGADO in his ITR of P4.33 million, sales should have been P183.94 million. Total percentage of underdeclaration of sales per investigation is 4,143.34%.

Under the Tax Code, an underdeclaration of taxable income of more than 30% is considered as substantial underdeclaration and constitutes prima facie evidence of fraud tantamount to tax evasion.

ALEGADO was slapped with a deficiency income tax assessment for taxable year 2009 in the aggregate amount of P102.94 million, inclusive of surcharges and interests.

The case against NILO H. ALEGADO is the sixty-eighth (68th) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.

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