BIR begins work on tax fraud audit of flood contractors
THE Bureau of Internal Revenue (BIR) has started the paperwork in investigating contractors flagged for irregularities in flood control projects, including Discaya-linked contractors.
“We’ve already issued the memorandum. We’ve conducted the initial steps like issuance of the letters of authority that will start the formal audit process,” Commissioner Romeo D. Lumagui, Jr. said in his interview with Money Talks with Cathy Yang on One News.
The probe announced this week follows President Ferdinand R. Marcos, Jr.’s recent disclosure that 15 contractors cornered approximately P100 billion, or around 20% of the P545-billion flood control budget since 2022.
Among those identified were Omega & Alpha Construction and St. Timothy Construction, both reportedly linked to former Pasig mayoral candidate Cezarah Rowena “Sarah” Discaya for alleged anomalous flood control projects.
Asked whether the BIR has started investigating the mentioned firms, Mr. Lumagui said: “Yes, we’ve begun our audit on these companies and on them. So, it’s ongoing. We hope to conclude it as soon as possible.”
The BIR’s audit will prioritize contractors involved in “ghost projects,” those reported as completed but found to be non-existent.
In explaining how the tax fraud audit will go, Mr. Lumagui said it will examine underreported revenues, inflated costs, use of fake invoices, and asset declarations.
“We will coordinate with the government agency involved or all government agencies. We will get all the revenues of these contractors,” he said.
The BIR will also trace all the assets of these companies and even shareholders to counter check their declared income.
Ms. Discaya, who appeared in a lifestyle video showcasing luxury cars and a lavish home, drew public scrutiny following allegations of her firms’ involvement in an anomalous project.
Earlier this week, the Department of Public Works and Highways announced the suspension of District Engineer Abelardo D. Calalo, who allegedly offered around P3.13 million in cash to Batangas Rep. Leandro L. Leviste to dissuade investigations into anomalies in flood control projects.
“As far as BIR is concerned, our main concern is whether these corporations are diligent in paying their taxes. That’s why in the procurement process, tax clearance is a requirement,” he said.
If proven to be involved in evading taxes, contractors will be denied an updated tax clearance, he earlier said.
The updated clearance guarantees that every contractor has no outstanding tax liabilities and has duly filed and paid all applicable taxes.
Failure to present this clearance will result in the suspension of contract settlements and the imposition of a tax line over the contract amount in favor of the government.
Mr. Lumagui also warned against the use of fake tax clearances.
“Some agencies are requesting us for confirmation, and we’ve seen several already that are fake,” he said.
Aside from the BIR, the House of Representatives vowed to investigate alleged irregularities in government flood control projects, warning there would be “no sacred cows.” — Aubrey Rose A. Inosante
