CASE STUDY:

GMA'S GOZON, INQUIRER'S

PRIETO SLAPPED WITH P23-M TAX CASE

In Partial Fulfilment of the

Requirements for the Subject Income Taxation

Submitted to:
Ms. Mary Jane Tasarra
Professor at Phinma Saint Jude College

Submitted by Group 8:
Besagas, Jovelyn
Coper, Ricka May
Durante, Jessie
Lopez, Sofiya
Veloria, Ma. Vernice

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 TABLE OF CONTENTS

Title Page………………………………………………………………………… 1
Table of Contents……………………………………….………………………... 2

CHAPTER
I. Objectives…………………………………………………………………….... 3
II. Rationale………………………………………...…………………………….. 3
III. Individual/ Company Profile.…..…………………………………………….. 4
IV. Tax cases/ Issues…....…………………………………………….………….. 4
V. Case Solutions……………………………………............................................ 5
VI. Summary……………………………………………………………………... 5
VII. Recommendation………….…………………................................................ 6
VIII. Sources………………………………………................................................ 6

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I. OBJECTIVES

 To define the problem/ issues of the two company

 To identify the tax liability for both parties
 To know the case solutions for the tax issue
 To provide recommendation between Felipe L. Gozon and Paolo Prieto
 To learn and understand the importance of tax

II. RATIONALE

The case study tackles about GMA'S Gozon, Inquirer's Prieto slapped with P23-M Tax
Case. The major reason for conducting this case study is to help not only the researchers but also
the people to be educated about the various tax laws and cases here in the Philippines. Taxes
have always been a big arrangement in every country because the government uses taxes to make
funds and resources for the country's plan such as schools, expressways, trails, and other
infrastructures that are used by the citizens. To control taxes definitely, the administration
declared tax laws. As a device of state administration, the individual income tax has played
different roles in different countries at different times, beginning in Great Britain at the close of
the 18th century. By 1914 the “personal” income tax had come to be regarded in several
countries not only as an important revenue instrument but also as an instrument for achieving
social reform through income redistribution. Finally, in most countries, it has been used to
redirect business decisions through the preferred method of various activities. It can also act as a
stabilizer against the economic changes because its effect on purchasing power varies inversely
with changes in income and employment. For example, a person who experiences a loss of
income due to a job loss will typically owe less in taxes; the employed person will pay more in
taxes but will have more income available for purchases. More recently, however, opinion has
changed away from the view that the income tax should be used for these purposes because of
the costs involved, in terms of disincentives and other misuses of economic behaviour.

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III. INDIVIDUAL /COMPANY PROFILE
1. Felipe Gozon
 Born on December 8, 1939 with the age of 81 years old.
 Felipe Gozon is chairman and CEO of GMA Network, which he controls with Menardo
Jimenez.
 Gozon, Jimenez and the late Gilberto Duavit took over management of GMA (then called
Republic Broadcasting System) in 1975.
 Aside from being the country's leading broadcaster, GMA has interests in film
production, record publishing and distribution, and new media.
 It listed on the Philippines Stock Exchange in 2007.
 Gozon is the recipient of the prestigious Chief Justice Special Award, conferred by the
Chief Justice of the Philippines, in 1991.
 Atty. Gozon earned his Bachelor of Laws degree from the University of the Philippines
(among the first 10 of his class) and his Master of Laws degree from Yale University
Law School. He was admitted to the Bar in 1962, placing 13th in the Bar examinations.

2. Paolo Prieto
 He is the President of Inquirer. Net
 Paolo, as the President of Inquirer.net, now stands at the helm of a website that
consistently ranks in the country’s top 10.y

IV. TAX CASES/ ISSUES

Taxes are used to pay for people who work for the government such as education, health
care, and to maintain or build things like roads and bridges. Through taxes, the government can
pay off its debts and helps the country’s economy to be stable. In short, tax money is a way of
ensuring that people have comfortable livelihoods.

In October 3, 2019, The Bureau of Internal Revenue (BIR) filed a tax evasion case against GMA
Chairman and Chief Executive Officer Felipe L. Gozon and Inquirer president Paolo Prieto.
Gozon and Prieto violate the Section 255 of the Tax Code or failure to file return, supply correct
and accurate information, pay tax withhold and remit tax and refund excess taxes withheld on
compensation. According to the BIR, Paolo Prieto and Felipe L. Gozon have tax liabilities worth
₱23 million for the taxable year 2006. The cases were filed at the Department of Justice. In 2006,
the portal was dissolved as the two media giants ended their partnership, and this both media
organizations put up their own news websites.
In conclusion, citizens should be obliged to pay taxes to the government for a number of reasons.
Even though many people think that they should not pay taxes, that money is useful to the
stability of any country. Therefore, people should not avoid paying taxes as it may affect the
country’s economy and services that it provides.

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V. CASE SOLUTIONS

GMA Chairman and Chief Executive Officer Felipe L. Gozon and Inquirer president
Paolo Prieto face a P23-million tax case over the now-defunct INQ7. According to BIR Makati,
INQ7 was served the necessary assessment notices but that it "failed to either pay or protest and
submit relevant supporting documents to prove the truth for their claims or to file an appeal with
the Court of Tax Appeals (CTA). BIR added that it also issued warrants of garnishment, but
INQ7 did not have properties that may be levied, and had no bank accounts that may be
garnished. BIR said it also sent a demand before suit (DBS) to INQ7, but "it proved futile." The
respondents continue to refuse to pay their long overdue deficiency taxes. The solution to this
case is the GMA and Inquirer closed down their partnership in year 2006. Gozon remains the
chairman and CEO of media network GMA while Prieto is the president of Philippine Daily
Inquirer's news.

VI. SUMMARY

Last October 3, 2019 The Bureau of Internal Revenue files a tax evasion case against
Felipe L. Gozon and Paolo Prieto. Felipe L. Gozon is a Chairman Chief Executive and CEO of
the GMA network while Paolo Prieto he is President of the Inquirer. According to the Bureau of
Internal Revenue or (BIR) Gozon and Prieto violated the tax law which the Section 255 Tax
code. It means Gozon and Prieto did not have enough supporting documents that they’re paying
the tax withhold, remit tax, and refund excess tax withhold. BIR is saying that Gozon and Prieto
have tax liabilities worth 23 million pesos which is taxable for year 2006. The cases are filled at
the Department of Justice. After the case was filled GMA Chairman and Chief Executive Felipe
L. Gozon and Paolo Prieto failed to pay or protest and submit supporting documents to prove for
their truth proclaimed or file an appeal to the court of tax appeal (CTA). BIR also issued the
warrant of garnishments but INQ AND GMA did not have properties or bank account to garnish.
And the two respondents continued to refuse for paying their overdue tax inadequacy and
decided to end up their partnership after being sued for the total liability tax. Both media
organizations put up their own new website. Taxes used to pay the people who work at the
government such as education, providing healthcare and most especially to our infrastructure,
building, expressway, railway, roads and bridges. Thorough taxes government can able to pay
the debt of our country for the sustainability of the economy and believe it or not taxes money is
way of ensuring the resourceful and sustainable livelihoods of the citizen at the certain state.

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VII. RECOMMENDATIONS

VIII. SOURCES

 https://www.pna.gov.ph/articles/1082141
 https://www.philstar.com/business/2019/10/03/1957082/gmas-gozon-inquirernets-prieto-
faces-p23-m-tax-evasion-rap