Doctors, lawyers facing tax charges in campaign vs professionals

Posted on September 16, 2011

TAX EVASION and criminal charges were filed yesterday with the Department of Justice (DoJ) against four individuals in relation to the practice of their profession.

Undercover work by personnel of the Bureau of Revenue (BIR) has resulted in the filing of criminal charges against Dr. Sylvia M. Huang, a dermatologist based in Greenhills, San Juan City; and Dr. Willy Go Lopez, a neurosurgeon with clinics at Makati Medical Center, Medical City and Cardinal Santos Medical Center, for their failure to issue receipts, BIR Commissioner Kim S. Jacinto-Henares said in a briefing yesterday after filing the cases.

Two BIR officers had posed as patients at Ms. Huang’s clinic, she recalled, and paid her consultation fee but were not issued a receipt. It was reported that other patients were likewise not issued a receipt when they paid the doctor’s fee, she added.

The case against Mr. Lopez, meanwhile, stemmed from a complaint of a patient whom he treated in 2009 for “tethered spinal cord syndrome” in Medical City; the patient paid a total of P164,000 for consultation and surgical fees.

BIR personnel in a similar undercover mission indicated that several patients testified to having visited the physician but were not given official receipts.

“There were already patients there. We got testimony and we saw that when they paid, there was no receipt being issued,” said Ms. Henares.

In addition, she said, Mr. Lopez noted in his book of receipts that only 47 patients were attended to, contrary to his appointment book which showed a list of 279 patients from Jan. 4, 2011 to Aug. 23, 2011.

Ms. Henares noted that this was the first time that the BIR has invoked a provision in the National Internal Revenue Code -- the failure or refusal to issue receipts and commercial invoices -- in filing criminal charges.

“This is the first time we are going to use Section 264... We have to discipline professionals... We are just making a point that they should issue a receipt. If not, BIR is not without remedy,” said Ms. Henares.

Usual remedies resorted to were tax-mapping, closure and surveillance, she explained, but the heightened campaign against tax evaders has led to going after those who fail to issue receipts with special instructions for regional directors and revenue district officers to “step up enforcement action.”

“There will be a lot more,” the BIR chief warned, adding, “you will not know who we will catch next, so the best antidote is to follow the law, comply with all the requirements.”

Penalties for violation of Section 264 include a fine of P1,000 to P50,000 and imprisonment of two to four years, said Ms. Henares.


In the same briefing, the BIR chief said tax evasion cases were filed against lawyers George Erwin M. Garcia and Abelardo Aportadera, Jr. for failure to pay the right amount of income and value-added tax (VAT) and failure to provide correct and accurate information.

In the case of Mr. Garcia, an informant told the BIR that he bought a unit at Shang Grand Tower Condominium in Legaspi Village, Makati for P53 million last year.

The BIR found Mr. Garcia to have substantially underdeclared his annual income tax return in 2010 and computed his income tax liability at P26.9 million and VAT liability of P11 million.

Mr. Aportadera, for his part, was a consultant of the shuttered Banco Filipino Savings and Mortgage Bank. Based on documents from the Philippine Deposit Insurance Corp., Banco Filipino paid Mr. Aportadera P66.7 million from 2008 to 2009 but he declared a gross income of only P50 million for the same period.

The BIR computed Mr. Aportadera’s total tax liability at P26 million: P5.5 million representing income tax liability and P20.5 million in value-added tax liability.

Ms. Henares said that the stepped-up campaign against erring professional under the Run After Tax Evaders (RATE) program is in line with the statement of President Benigno S. C. Aquino III during his State of the Nation Address on how it was “hard to believe” that 1.7 million self-employed and professional taxpayers -- lawyers, doctors, businessmen -- paid a total of only P9.8 billion in 2010, or “an average of P5,783 in income tax,” translating to an income of “P8,500 a month, which is below the minimum wage.”

“The President gave a policy, he pointed it out, so we should do something, this is the thing that we are doing,” said Ms. Henares.

She further noted that a total of 67 cases have been filed under RATE and that the latest four were “related to what the President talked about in his State of the Nation Address [as] these are against the professionals.” -- Johanna Paola D. Poblete