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A pawnshop owner’s taste for luxury sports cars has landed him in trouble when tax assessors found that he has not been paying taxes for the years 2002 to 2009.

The tax evasion complaint lodged against William Villarica, sole proprietor of the W Villarica Pawnshop chain, was the first case filed by the Department of Finance and the BIR under its revitalized Run After Tax Evaders (RATE) program before the Department of Justice.

Finance Secretary Cesar Purisima said Villarica willfully evaded the payment of tax, an offense which carries a penalty of imprisonment of not more than 10 years.

The BIR is also set to file another complaint against Villarica for the civil aspect of the tax evasion case, which would require him to pay the correct amount due to the government. "This filing exhibits teamwork between the DOF and DOJ, which was absent the first time around we tried to implement this program. We hope that with this better cooperation, we would be more successful in convincing the taxpaying community that we mean business, and it’s no longer business as usual," Purisima said.

An investigation conducted by the BIR National Investigation Division, showed W Villarica Pawnshop maintains several branches in Caloocan, Malabon, Marikina and Bulacan.

Upon verification of a tip from, the BIR learned that for the years 1998 to 2009, Villarica’s total tax payments amounted to only P25,607.25, and that he stopped filing his income tax altogether from 2002 to 2009, except in 2007 when he filed a return with zero tax payments.

According to Villarica, his business has stopped operating due to losses.

Further investigation showed, however, that in the same year that he claimed zero income, he was able to buy a Lamborghini sports car worth P26 million.

"We find it to be not just criminal, but perhaps also immoral, for a person that earns profits out of people in need of financial assistance, yet fails to do his one duty to the country and pay his proper taxes," said Internal Revenue Commissioner Kim Henares.

She said Villarica also owned several other sports cars, including a Ferrari.

"In the pawnshop industry, they charge a lot of interest and among the financial sector, this is one of the more profitable institutions. The fact that he is engaged in business but does not file any income tax return is a clear violation of the NIRC (National International Revenue Code," she said.

Henares said based on the purchase of the Lamborghini car alone, the BIR computed a P16.2 million possible income tax deficiency plus a P6.3 million deficiency in value added tax.

The fact that Villarica has a P26-million vehicle easily suggests that he was making least P1 million or P2 million a year, Henares said.

"Normally someone with a nice car would probably have nice houses as well. So this is probably just the tip of the iceberg. Once a case is filed in court, we will have the capacity to actually look into more details, but, as emphasized, this is just the criminal aspect we are filing," she said.

"We want to sent the message to erring tax payers that the chances of being caught are higher and that once caught there would be no compromise. Is cheating (on your taxes) worth the headache that you’d have as we go through this program?" she said.

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