Tax court orders businessman's arrest in P5.5-B evasion case

MANILA, Philippines - The Court of Tax Appeals (CTA) first division has ordered the arrest of businessman Macario Gaw Jr. after it found probable cause in the P5.5-billion tax evasion case against the businessman filed last year by the Bureau of Internal Revenue (BIR).

Gaw owns taxi firm MGE Transit Corp. and is also the president of Megapacking Corp. and Macro Liquid Petroleum Gas Co. Inc. The case against him, the biggest tax evasion case filed under the Aquino administration, is for alleged violation of Section 255 of the National Internal Revenue Code or failure to file correct and accurate information with the BIR for 2007 and 2008.

In a resolution dated Oct. 19, the CTA said “the court, after due deliberation, finds the existence of probable cause for the issuance of warrant of arrest against the accused in these consolidated criminal cases.” The court set Gaw’s bail bond at P240,000 for two cases.

The CTA granted Gaw’s motion to maintain the suspension of proceedings until Aug. 22 because he is waiting for a resolution from the Department of Justice on his motion for reconsideration.

The BIR alleged that Gaw provided wrong information in his 2007 and 2008 income tax returns and failed to file value-added tax (VAT) returns for 2008.

He also allegedly used multiple tax identification numbers, a criminal offense under Section 275 of the National Internal Revenue Code.

Gaw bought real estate properties and deliberately misclassified the tax treatment for the properties, the BIR alleged.

Gaw bought 10 lots in 2007 and 2008 worth P4.1 billion, which he sold for P8.4 billion a few months later, the BIR said. The BIR alleged that the businessman “deliberately misclassified” the sale of the lots as a sale of “capital assets,” paying only the six-percent capital gains tax instead of the 32-percent income tax and 12 percent VAT.

The resolution was signed by CTA Associate Justices Ernesto Acosta, Erlinda Uy and Esperanza Fabon-Victorino.