Joseph Calata, founder of Kroptoken and Calcoin, has been slapped with tax evasion charges in the Philippines.
The charges were brought under the Philippines Run After Tax Evader (RATE) program, a scheme designed to crack down on the rising incidents of tax fraud in the country. According to the court filings, Calata and his business entities have accumulated a total aggregate liability of over PHP398.13 million (US$6.8 million) with the matter instituted in Caloocan City.
“The respondent’s failure and continued refusal to file or pay their long overdue deficiency taxes, despite repeated demands, constitute a willful failure to file or pay taxes due to the government,” the Philippines’ Bureau of Internal Revenue (BIR) said.
This is not Calata’s first run-in with Filipino law enforcement agencies. In 2017, Calata Corp. was delisted by the Philippine Stock Exchange (PSE) after it failed to make relevant disclosures to the public and for insider trading. As a result, Calata was banned by the country’s Securities and Exchange Commission (SEC) from holding any executive position in any public company in the country.
To circumvent the punishment of the PSE, Calata turned his sights to digital assets, converting all outstanding 570 million shares of Calata Corp into virtual currency known as Calcoins in 2018. However, the venture was short-lived following impediments from regulators back in Hong Kong over irregularities with the Initial Coin Offering (ICO) and the issuing entities.
Other offenders in BIR’s delinquent taxpayers’ list include Agri Phil Corporation, KG Design & Packaging Group Corp, L.A.H. Construction Corporation, Marick Rickmark Corporation, and Mijac Construction, Inc. Principal members of the defaulting companies were also listed as defendants in the matter and were charged under sections 253 (d) and 256 of the National Internal Revenue Code of 1997.
Expect a wave of digital asset tax-related cases
In the U.S., the Internal Revenue Service (IRS) says it is bracing itself for an increase in the number of virtual currency tax-related cases ahead of the new tax season. The IRS head of Criminal Investigation noted that the bulk of cases it has to deal with are from individuals receiving their salaries in virtual assets and choosing not to report them.
Others include off-ramping transactions of individuals converting their virtual assets to fiat and choosing not to report the gains. The body reiterated its readiness to clamp down on tax offenders saying that it was ready to follow criminals into the metaverse.
The tax regimes of digital assets in different jurisdictions may play a role in the impending rise of digital asset tax cases.
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