The Bureau of Internal Revenue (BIR) on Thursday filed tax evasion charges against a man who had bought a P200-million sports car worth out of his unreported income.
The BIR filed the charges against Napoleon Segui Villapando with the Department of Justice, according to the a press statement the bureau issued.
Based on documents gathered by the BIR during the investigation, Villapando, a resident of Mandaluyong City, acquired from his employer, Norsophil Metal Resources, Inc., a 2-door Lamborghini coupe in 2007. Despite the acquisition of the luxury vehicle, Villapando only declared a gross income of P225,078.60 in the same year.
Investigators further discovered that Villapando did not file any Income Tax Return (ITR) for taxable years 1999-2002 and 2005. In fact, he only declared a combined gross income of P718,575.78 for the four-year period 2003, 2004, 2006, and 2007. His income taxes for the said years were withheld and remitted by Norsophil since Villapando represented that he was earning purely compensation income which qualified him for substituted filing.
Villapando tax records showed that he has no financial capacity to acquire the car, so the BIR deduced that his acquisition must have been made possible by income he earned from other sources aside from his compensation as an employee.
The BIR used the Expenditure Method of tax investigation to compute Villapando’s unreported income, which amounted to P19.77 million or 8,786 percent.
Under the Expenditure Method, if one’s spending exceeds his reported income for a given year and the source of the funds to make the expenditures is unexplained, such expenditures represent unreported income.
Under Section 248(B) of the Tax Code, an underdeclaration of taxable income by more than 30% constitutes a prima facie case of fraud tantamount to tax evasion.
Villapando was assessed an aggregate deficiency tax liability for taxable year 2007 amounting to P15.84 million, inclusive of surcharges and interests.
The case against Villapando is the 165th filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.