Nestle products distributor canned with tax evasion

From the Bureau of Internal Revnue

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against DG Cold Chain Distributors, Inc. (DG Cold Chain), together with its responsible corporate officers Gregorio M. Mendoza (President) and Larry H. Rodriguez (Treasurer), for willful attempt to evade or defeat payment of Income Tax (IT) and Value Added Tax (VAT), deliberate failure to file its Income Tax Return (ITR) and failure to pay tax thereon, and willful failure to supply correct and accurate information in its VAT Returns for taxable year 2006, in violation of Sections 254 and 255, in relation to Sections 253 and 256, of the National Internal Revenue Code of 1997, as amended (Tax Code).

DG Cold Chainis a domestic corporation registered with the BIR and the Securities and Exchange Commission (SEC) with registered business address located in Mandaluyong City. It is primarily engaged in the trading business and is one of the distributors of Nestle Products nationwide.

The case against DG Cold Chainstemmed from the issuance of a Letter Notice which was triggered by the cross matching of information/data provided by Nestle Philippines, Inc. on the declarations per VAT Returns of DG Cold Chain.

Based on the information and documents gathered in the course of the investigation conducted by the Regional Investigation Division of Revenue Region No. 7, Quezon City, it was discovered that DG Cold Chain declared with the BIR gross purchases amounting to P14.17 million. However, a Certification issued by Nestle Philippines, Inc. in reply to the Access Letter issued by the BIR showed that the total sales made by the former to DG Cold Chainin 2006 amounted to P133.56 million. DG Cold Chain, thus, underdeclared its purchases for the said year by P119.39 million or by 842.49%. BIR investigators computed the undeclared sales of the respondent corporation at P138.07 million.

DG Cold Chain and its responsible corporate officers were sued for a total tax liability covering taxable year 2006 amounting to P191.41 million, inclusive of increments, broken down into: Income Tax – P141.51 million; and Value Added Tax – P49.90 million.

The case against DG Cold Chain Distributors, Inc., together with its responsible corporate officers Gregorio M. Mendoza and Larry H. Rodriguez, is the 263rd filed under the RATE program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares. It is likewise a RATE case of Revenue Region No. 7, Quezon City.