BIR Files P359-M Tax Evasion Charges vs MLM Firm Royale Business Club

A multi-level marketing firm including three other businesses are facing tax evasion charges in separate tax evasion cases.

According to media report, the Bureau of Internal Revenue (BIR) filed today a criminal complaint with the Department of Justice against Royale Business Club International Inc for refusing to provide correct information about its income tax returns and value-added tax (VAT) returns for the years 2011 to 2013.

BIR commissioner Kim Jacinto-Henares © GMA News Online.
BIR commissioner Kim Jacinto-Henares © GMA News Online

Royale, which holds office along Quezon Avenue in West Triangle, Quezon City, is a local company engaged in the marketing and distribution of consumer products, such as food supplements, cosmetics, pharmaceutical products and beverages.

The BIR had requested banks for records of Royale’s payments to them. BPI, Metrobank, and Banco de Oro certified that they paid Royale P141.60 million, P468.55 million, and P171.07 million, respectively.

In total, Royale received income payments from the said banks amounting to P190.79 million in 2011, P236.38 million in 2012, and P354.06 million in 2013.

However, the BIR investigators discovered that Royale declared in its ITR gross sales of only P39.14 million in 2011, P106.69 million in 2012, and P196.68 in 2013. This meant the company underdeclared its correct taxable sales by 387 percent in 2011, 122 percent in 2012 and 80 percent in 2013.

The BIR sued Royale for an aggregate deficiency tax liability amounting to P359.75 million, inclusive of surcharges and interests, broken down into.

In addition to Royale, the BIR also sued the following companies:

  • Teresita R. Alcantara, who owns Project 3, Quezon City-based Rusette Printing Press & Trading and owes the government P19.69 million in income tax and VAT, including interest and surcharges;
  • Industrial equipment importer and retailer Dainan International Inc and its president Nelson Tia for P54.27 million in income tax and VAT; and
  • Metals and peripherals manufacturer Vivetech Corporation and its officers Edwin B. Lumague (president) and Roedel R. Lumague (treasurer) for P32.96 million in income tax, VAT withholding tax and documentary stamp tax.

The above cases are part of the BIR’s Run After Tax Evaders (RATE) Program.