Gigi’s brods face P190-M tax raps

MANILA, Philippines - Tax evasion charges involving P190 million were filed yesterday against the brothers of Gigi Reyes, former chief of staff of Sen. Juan Ponce Enrile.

Neal Jose Gonzales and Patrick Jean Gonzales of the Ortigas-based realty firm MGNP Inc. were charged for willful attempt to evade taxes in 2009, 2011 and 2012 and deliberate failure to file annual income tax returns in the past two years.

The case against the Gonzales brothers was one of four cases filed by the Bureau of Internal Revenue as part of its intensified campaign to run after tax evaders. The BIR also filed tax evasion charges against engineering firm LVS Glimpex Philippines, bus firm Kingsam Express Inc. and infants wear retailer Little Bebe Baby Products Center.

The BIR said the total tax liability of the Gonzales brothers amounted to P190.14 million, inclusive of surcharges and interests in 2009, 2010 and 2011.

Documents obtained by the BIR showed that MGNP, which is engaged in the buy-and-sale of properties, bought a property in Paseo de Magallanes from Premier Global Links for P43.2 million in September 2009.

MGNP, however, failed to declare the amount used to purchase the property in its 2009 ITR.

The company sold the property to Polyfoam RCG International for P81.72 million in June 2012, but the transaction was not reported in the company’s ITR and value-added tax returns for 2012.

Records also showed that in February 2011, MGNP acquired land from C.J. Yulo and Sons Inc. for P150 million. The acquisition was reported in the firm’s audited financial statements for 2011 but was not filed in its ITR and VAT returns for the year.

The BIR used the expenditure method in determining the unpaid tax liabilities. Under this method, any expenditure that is in excess of reported income and unexplained wealth is considered to be the amount of unreported income.

“We compared the amounts used in buying these properties and their reported income. The conclusion is that they had unreported income,” BIR commissioner Kim Henares said.