P35-M tax case vs Philrem junked

MANILA, Philippines - The Department of Justice (DOJ) has junked the P35.61-million tax evasion charges filed by the Bureau of Internal Revenue (BIR) against Philrem Service Corp., the remittance firm implicated in the alleged laundering of $80.9 million stolen by hackers from Bangladesh Bank.

In a resolution released yesterday, the DOJ dismissed for lack of probable cause the complaint filed by BIR against Philrem and its top executives – president Salud Bautista and treasurer Michael Bautista – for violation of the National Internal Revenue Code over alleged failure to pay gross receipts tax and file percentage tax returns from 2005 to 2014.

After preliminary investigation, Assistant State Prosecutor Karla Torres Cabel said the BIR filed the complaints with “unreasonable haste” that Philrem was not given opportunity to respond to the probe into the alleged tax liabilities.

“It appears the respondents (Bautista couple) 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,” read the resolution.

“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 receipt of Letter of Authority,” it stressed.

In dismissing the charges, the DOJ cited records showing Philrem has been “consistently paying a higher rate of tax – 12 percent VAT (value-added tax)” since 2010.

The prosecutors also did not find merit in BIR’s accusation that Philrem committed misrepresentation when it continued to operate as a remittance firm even if it was registered as a land transport company in 2005.

The DOJ said there was no such unlawful conduct of business as Philrem “never concealed” its change of business line.

“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,” it explained.

“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 DOJ added that the firm even updated its records with the BIR when the company filed its Application for Registration Information Update with the BIR Revenue District Office 47.

While being cleared in tax evasion charges, the same Philrem executives are facing separate charges of money laundering with the DOJ filed by the Anti-Money Laundering Council.

The AMLC has accused the remittance firm of being the conduit of the transfers of the $81 million from the Rizal Commercial Banking Corp. (RCBC) branch on Jupiter Street in Makati City to the casinos and junket operators, including Kim Wong.  

Maia Santos-Deguito, the RCBC branch manager, was implicated in the laundering scheme.              

Deguito was arrested Wednesday by the Makati police on charges of perjury.

Her lawyer Ferdinand Topacio cried harassment over the arrest. – With Mike Frialde