The Bureau of Customs is expected to reveal shortly the results of investigations on the alleged tax violations of luxury car importer CATS Motors Inc.
Finance Secretary Carlos Dominguez III relayed the message by Customs Commissioner Rey Leonaldo Guerrero when the secretary was asked on the latest audit of the car importer, the sole distributor of Mercedes-Benz cars in the country.
“The Audit Report for Auto Nation Group Inc., the import arm of CATS Motors Inc., is now in its final stages. The audit team is now finalizing their report both as to the Prior Disclosure Program Application of Auto Nation Group Inc. and the post clearance audit conducted against the said company,” Dominguez said in a message to reporters based on Guerrero’s report.
The Customs in 2016 reported discrepancies in payments made by Auto Nation, claiming the company owed the government P233.6 billion in duties and taxes for 2015.
The Legal and Inspection Group of the Bureau of Internal Revenue in a memorandum on Jan. 20, 2013, also noted possible tax violations by CATS given the discrepancies between suggested retail prices and the company’s market prices.
It said a Mercedes-Benz CLS 63 with a market price of P19.8 million at that time was declared having sold for only P4.9 million.
“Owing to the magnitude of discrepancy between the market prices and the actual dealer’s suggested retail prices of the vehicles sold by the above taxpayer and in accordance with the provisions of Section 248 (B) of the National Internal Revenue Code of 1997 as amended, a prima facie evidence of tax fraud exists in the instant case,” the BIR memorandum said.
It was also reported in 2017 that the Bureau of Internal Revenue notified the luxury car importer about an audit.
BIR Commissioner Caesar Dulay said in an interview that a subpoena for documents was issued by Large Taxpayers Service. The subpoena was also referred to as a letter of authority, which is used to inform taxpayers that their books of accounts, records and other transactions would be examined and verified.
The letter of authority was issued after CATS failed to provide necessary documents requested by investigators.