THE Department of Justice has dismissed the tax evasion case filed by the Bureau of Internal Revenue against the PhilRem Service Corp. and its owners for allegedly failing to pay the government P35.61 million in taxes.
The DoJ found no probable cause to indict PhilRem president Salud Bautista and treasurer Michael Bautista for alleged willful attempt to evade paying the gross receipts tax, deliberate failure to file percentage tax returns (PTR), and unlawful pursuit of business from 2005 to 2014.
PhilRem became controversial after it was implicated in the $81-million money laundering scandal early this year, involving funds of the Bangladesh Bank stolen from the Federal Reserve Bank of New York.
The company was accused of having acted as conduit to the money transfers covering the $81 million from the Rizal Commercial Banking Corp. branch on Jupiter Street in Makati City to the casinos—where the money was supposedly laundered—and other benefactors that included junket operators.
In its resolution, the DoJ, the BIR filed the complaints with “unreasonable haste” and did not give PhilRem enough time to respond to the investigation into the alleged tax liabilities.
“The records also show that there is no valid service of PAN (Preliminary Assessment Notice), formal letter of demand, and assessment notice to PhilRem since the complainant-agency (BIR) filed the criminal complaint merely two days from respondent’s (PhilRem) receipt of Letter of Authority,” Assistant State Prosecutor Karla Torres Cabel said, in a resolution.
“It appears the respondents were not given ample time to comply with the directive of complainant-agency to present its books for examination and verification. Such being the case, the crucial element of willfulness to evade payment of taxes imposed by law cannot be imputed against respondent-officers of PhilRem,” the investigating fiscal stressed.
The DoJ noted PhilRem has been “consistently paying a higher rate of tax—12 percent VAT (value-added tax)—instead of the required 5 percent GRT” since 2010.
On the issue of unlawful conduct of business, the DoJ said documents showed that PhilRem “never concealed” its change of business line.
The BIR had accused PhilRem of misrepresentation when it continued to operate as a remittance firm even if it was registered as a land transport company in 2005.
“The records support respondents’ contention that PhilRem has been diligently paying its annual registration fees with the BIR pursuant to Section 258 of the National Internal Revenue Code,” DoJ prosecutor said.
“PhilRem previously filed the corresponding Certificate of Registration as a duly registered remittance agent from the Bangko Sentral ng Pilipinas and Amended Articles of Incorporation to reflect its change of primary purpose to ‘remittance of money currency from abroad to different parts of the Philippines,” the resolution stated.
The prosecutor said it appears that PhilRem updated its records with the tax agency when the company filed its Application for Registration Information Update with the BIR Revenue District Office 47.
