The Bureau of Internal Revenue (BIR) said Thursday it filed criminal complaints against two contractors and their officers for tax evasion linked to non-existent, or “ghost,” flood-control projects in Bulacan province.
The complaints, filed at the Department of Justice, target IM Construction Corp. and SYMS Construction Trading, as well as their responsible officers, for alleged violations of the National Internal Revenue Code (NIRC) of 1997.
The total tax deficiencies assessed against the two companies amount to P13.8 million, arising from fictitious expenses, underreported income and false Value Added Tax (VAT) declarations.
BIR Commissioner Charlito Martin Mendoza said the cases are part of an intensified campaign against contractors who misuse public funds through fake projects and fraudulent tax practices.
“They took public money meant to protect families from flooding and built nothing. That is corruption at its most shameless,” said Mendoza.
“The BIR will not allow contractors to enrich themselves through fake projects and falsified tax filings. We will pursue every offender, recover every peso and continue filing criminal charges until this practice ends,” he said.
The companies face charges under Section 254 (Tax Evasion) and Section 255 (Willful Failure to Supply Correct and Accurate Information), both of which carry heavy fines and potential imprisonment.
The agency’s investigation revealed that IM Construction received payment for a pumping station and flood gate in Barangay Sto. Rosario, Hagonoy, but a physical verification confirmed that no structure was built.
As a result, the company’s claimed project costs, deductions and input taxes were deemed entirely fictitious, constituting a deliberate attempt to evade taxes.
The probe also found that SYMS Construction Trading collected 100 percent of the contract amount for a reinforced river wall in Barangay Piel, Baliuag. Inspections confirmed that no river wall was constructed on site, meaning the company had no legal basis for its claimed deductions or input taxes, reflecting an intentional effort to conceal income.
With these two filings, the BIR has now filed a total of 12 criminal complaints related to anomalous flood-control projects.
The agency estimates the total potential tax liabilities under investigation in these linked cases to be P8.87 billion.
Mendoza said the BIR is conducting expanded audits on related contractors and individuals and expects to file more criminal complaints in the coming weeks.
