THE Bureau of Internal Revenue (BIR) on Thursday filed tax-evasion cases against a metal and plastic manufacturer and a marketing arm for television and film producers for allegedly lying to the government about their transactions.

Internal Revenue Commissioner Kim Henares filed the cases against Gammon Metal Products Inc. and Silver Trumpets and Co. Inc. for not paying a total of P1.78 billion in taxes.

Gammon Metal, a manufacturer of metal, plastic, electrical and industrial products, and Joaquin Chua, its president, failed to provide the government with the correct information in the firm’s income-tax returns and value-added tax returns in 2007 and 2008, the BIR said.

Revenue investigators uncovered Gammon Metal’s tax irregularity after its suppliers did not file any tax return in 2007 and 2008.

“The suppliers were, in fact, nonexistent and, thus, sham companies. Moreover, Gammon failed to substantiate its claim of purchases from the suppliers when asked by the BIR, prompting us to disallow the VAT input taxes claimed by the company from the purchases,” Henares said during the filing of the cases at the Department of Justice.

The fictitious purchases of Gammon resulted in overclaim of VAT input taxes and substantial underdeclaration of its income in 2007 and 2008.

The BIR assessed Gammon an estimated total tax deficiency of P1.7 billion for the two-year period, including surcharges and interests.

In the case against Silver Trumpets, the BIR said the company declared “no operation” in 2003 but actually continued to transact business involving millions of pesos during that year. Included in the charge was its president, Ma. Luz Pangilinan.

Silver Trumpets is a marketing arm for television and film program producers, selling broadcast advertising spots or spaces to advertisers. It also offers consultancy services for media planning and other related media services.

According to the BIR, Silver Trumpets declared that it had “no operation” in its quarterly VAT returns and income-tax return in 2003. No operation constitutes nonpayment of income tax.

An inquiry into the summary list of purchases submitted to the BIR by Warner Bros. Inc., however, disclosed that Silver Trumpets received a payment of P10.09 million for services rendered in 2003.

“The discovery led the BIR to issue and serve a notice to Silver Trumpets asking it to rebut the discrepancy. But it failed to reconcile the discrepancy, prompting investigators to compute its total income tax and VAT liabilities,” Henares said.

Based on the BIR assessment, the company’s tax deficiency was P9.2 million, inclusive of surcharges and interest, P2.2 million of which was for its income tax for 2003 and P7 million for nonremittance of VAT.