Controversial remittance firm Philrem Service Corporation found itself in deeper trouble after it was charged with tax evasion at the Department of Justice (DOJ).
Philrem was dragged into the $81-million money laundering controversy involving stolen Bangladesh Bank funds,a which entered the Philippine financial system via the Rizal Commercial Banking Corporation (RCBC).
The Bureau of Internal Revenue (BIR) filed a criminal complaint against the company and its president, Salud Bautista and treasurer, Michael Bautista.
In the complaint, Philrem was charged with non-payment of gross receipts tax (GRT), also known as percentage tax, amounting to P35.61 million from 2005 to 2014.
BIR Commissioner Kim Henares clarified that the case at present has nothing to do with or still does not include Philrem’s tax compliance over the Bangladesh Bank money-laundering case.
The tax agency noted that Philrem, in its BIR registration, said it is involved in the business of land transportation but it later amended its primary purpose with the Securities and Exchange Commission declaring that it will engage in money remittance.
“Despite the change in its primary purpose, it did not update its registration with the BIR,” the agency said.
Philrem is also registered with the Bangko Sentral ng Pilipinas (BSP) as a remittance agent.
“As a money remittance corporation and classified by the BSP as a non-banking financial institution (NBFI), it is subject and should be taxed for its gross receipts,” the BIR said.
It added that Philrem filed value-added tax returns and paid the tax due thereon instead of filing percentage tax returns and paying the five percent gross tax receipts.
“The gross failure of Philrem to register, declare and pay the GRT showed a clear intent and purpose on its part to evade the payment of the correct amount of taxes. Further, its failure to update its registration with the BIR made it liable for Unlawful Pursuit of Business,” the BIR said.
The bureau’s investigation of Philrem’s tax compliance involving its income derived from this controversial transaction is still continuing and the remittance firm may still face other charges over this particular transaction.
The BIR asked the DOJ to conduct an immediate preliminary investigation and determine if there is probable cause to the case so that the necessary charges can be filed in court.