A criminal complaint for tax evasion has been filed by the Bureau of Internal Revenue (BIR) against a flood control contractor over an alleged ghost project in Bulacan.
BIR Commissioner Charlito Martin Mendoza led the filing on Thursday, saying the complaint was lodged before the Department of Justice (DOJ) against Mark Allan Arevalo, the sole proprietor of Wawao Builders, for an alleged tax deficiency of at least P48 million.
Mendoza said Arevalo was awarded a contract in 2024 for a river infrastructure protection or flood control project in Bulacan and received payment for the project, but no actual construction was undertaken.
“He received the money, but no flood control project was actually made. It was a ghost project,” Mendoza said.
Despite the absence of any completed work, Mendoza said Arevalo declared construction-related costs and operating expenses in his tax returns. The BIR found these deductions to be fictitious and non-existent, forming the basis of the tax evasion complaint.
The BIR chief said the filing was part of the agency’s role in the government’s broader campaign against corruption in public infrastructure projects, following President Ferdinand Marcos Jr.’s directive to prioritize investigations involving infrastructure spending.
Mendoza said the BIR initially focused on alleged ghost projects because liability was easier to establish, noting that tax returns declaring project costs could be readily verified against the absence of any actual construction.
However, he stressed that the agency’s probe is not limited to ghost projects alone. Projects that were completed but allegedly involved substandard work or inflated costs are also under investigation, as these could likewise constitute tax violations.
The case will undergo preliminary investigation at the DOJ. Mendoza said the BIR has already filed the necessary complaint and will submit additional pleadings if required once respondents file their counter-affidavits.
The case against Wawao Builders marks the third tax evasion complaint filed by the BIR involving infrastructure projects, bringing the total alleged tax liability in these cases to nearly P9 billion. Mendoza added that at least four more cases are expected to be filed as investigations continue.
The BIR is also conducting ongoing investigations into politicians and local officials who may be linked to anomalies connected to the alleged ghost projects.
Mendoza said all personalities allegedly involved are under investigation, adding that the agency is ensuring it has clear and sufficient basis before filing any additional cases.