Commissioner Romeo D. Lumagui, Jr led the tax fraud investigation of one of the biggest distributors of flour in the industry, JPOON AND SONS CORPORATION (JPOON). JPOON is connected to one of the major manufacturers of flour in the Philippines through their interlocking board of directors and majority stockholders.
JPOON is a domestic corporation with multiple branches in Metro Manila, Naga, Baguio, Laguna, Quezon, and Camarines Sur. Its main office is currently registered with Revenue District Office (RDO) No. 65 – Naga City, Camarines Sur with registered address at No. 16 General Luna St., Naga City.
The BIR investigation revealed that JPOON has a warehouse/sales outlet and a back-office site in Quezon City which are both unregistered. JPOON also issues unregistered invoices in its sales operations across branches, and this has been going on for years. Further, JPOON has registered only manual receipts. It has NOT registered any CRM/POS or any Computerized Accounting System which it utilizes to issue unregistered receipts. In this manner, JPOON is shielding its actual inventory to greatly reduce its tax liabilities.
The practice of issuing unregistered receipts was confirmed during the test buys conducted by the BIR, pursuant to the Mission Order signed by the Commissioner himself. Further, it was found that the unregistered warehouse in Quezon City contains thousands of bags of flour including sugar and other bakery products.
The BIR did simultaneous enforcement operations involving multiple branches covering several locations of JPOON. The BIR is also checking on the importation of wheat used to produce flour by JPOON’s sister company, for which JPOON is one of the biggest purchaser.
The Commissioner ordered the seizure of all the unregistered computers, accounting software, servers, and unregistered receipts being used by JPOON in its illegal operations.
“We want a level playing field for businesses in the Philippines. Big companies like JPOON should comply with all BIR issuances. All companies should. Non-payment of taxes should not be treated as a business advantage”, Commissioner Lumagui stated.
For violating pertinent provisions of the Tax Code, JPOON is facing Oplan Kandado Procedure pursuant to RMO 3-2009 and intensive tax fraud audit.