Osmeña sues security agency for tax fraud

CEBU, Philippines - Cebu City Mayor Tomas Osmeña's pursuit against alleged tax evaders continues, this time accusing a security agency of defrauding the government to lessen its business tax liability in 2015.

Osmeña yesterday lodged another criminal complaint before the Cebu City Prosecutor's Office. The mayor accused GDS Security and Detective Agency Inc. of violating the National Internal Revenue Code of the Philippines and Article 172 (falsification by private individual) of the Revised Penal Code.

He named GDS Board Members Benjamin, Dominga, Abigail and Benedict Sun, and Marjorie Ann Sun-Ng as respondents.

In his complaint affidavit, Osmeña alleged that GDS falsified its application form for renewal of its business permit by declaring that the firm's gross sales or receipts amounted only to P14,241,096.27 for the year 2015.

As a result of the alleged underdeclaration of gross sales, GDS was only assessed a total of P106,808.22 as business tax for the same year. Osmeña said he noticed that there is also inconsistency between what GDS declared on its gross sales and that appeared on its Annual Income Tax return and Statements of Income, in which the company declared P19, 379, 913 as its sales services for the year 2015.

Nonetheless, he contended that it is impossible for GDS to declare such gross income when in fact it actually earned more from its services to different clients including the city government, which shelled out more than P32 million in 2015 for its contract with the company.

"It is readily apparent that for the year 2015, twenty six checks had already been claimed by GDS from the City Government of Cebu amounting to a gross total of P32.7 million. These checks had already been debited from the account of the City Government of Cebu as evidenced from the Bank Statements of BDO and LBP (Landbank of the Philippines)," he stated.

Based on the statement of all government and private contracts entered into by GDS, Osmeña noted that the security firm had also completed a contract with Cebu Port Authority from January 1 to December 31, 2015 amounting to P36.6 million.

GDS also had a P3.7 million contract with Cebu Normal University for the period from October 16, 2015 to October 15, 2016; P29.4 million with Mactan-Cebu International Airport Authority (September 16, 2015 to September 15, 2016); P43-million contract with Metropolitan Cebu Water District (August 1, 2013 to July 31, 2016); and a P1.2 million contract with A.D Gothong Manufacturing Corporation (January 1, 2015 to December 31, 2015).

 "Clearly, it cannot be denied that regardless of whether GDS is using cash or accrual basis, it has indeed under-declared its gross sales/receipts for the year 2015," Osmeña added.

It was the third criminal complaint for alleged tax fraud filed by the mayor against businesses in the city.

Last November 23, 2016, Osmeña also filed criminal charges against four officials of SM Prime Holdings, Inc. for allegedly misrepresenting the size of SM Seaside City to reduce its tax obligations to the city government amounting to about P23 million.

Osmeña accused the officials of violating Art. 318(other deceit of the Revised Penal Code.)

In another complaint, he also went after BDO's branch on Magallanes Street for the same violation. (FREEMAN)