By Mike Frialde
The Philippine Star
MANILA, Philippines – Sarangani Rep. Manny Pacquiao yesterday hit the Bureau of Internal Revenue (BIR) for filing what he said was a “harassment case” against him in connection with his alleged refusal to submit documents involving his business interests and income sources that were earlier summoned by the tax collection agency.
Speaking to reporters in Makati City, Pacquiao also dismissed reports that what the BIR had filed against him was neither tax evasion nor tax fraud, but simply for his alleged refusal to submit documents summoned by the BIR.
“The case against me is plain and simple harassment. Contrary to public perception, I am not charged with tax evasion or tax fraud. That is farthest from the truth. Over the years as a boxer, a product endorser and a businessman, I have not surcharged the government for what it is due. Hence, it is with a heavy heart to hear that I was charged with tax evasion or tax fraud. It was even reported in international media that I shall follow Mayweather soon in jail. I don’t have that intention. I would rather see him inside the ring,” he said, referring to the much awaited fight against Floyd Mayweather Jr. who also had some legal issues.
The Filipino boxing icon said that the case the BIR filed against him refers to a violation of Section 266 of the National Internal Revenue Code for alleged failure or refusal to submit more than 62 documents required by the BIR.
Under Section 266 (Failure to Obey Summons), any person who fails to appear to testify, or to appear and produce books of accounts, records, memoranda or other papers, or to furnish information as required by the BIR, could pay a fine of not more than P10,000 and face a prison term of not more than two years.
Pacquiao added that the case filed by the BIR against him was baseless, as he did not personally receive the agency’s letter of authority and the subsequent subpoena.
He said the BIR even violated its own rules when it served the subpoena not on him but on another person not known to him.
He also questioned why the BIR served the subpoena in General Santos City when he is now a resident of Sarangani.
Lawyer Rozil Lozares, BIR Revenue Region 18 director, said they filed charges against Pacquiao last March 1 before the Prosecutor’s Office in Koronadal City in connection with their ongoing investigation into the representative’s tax payments in 2010 based on the income tax returns he filed.
“The BIR said that the case against me is not harassment but the letter (of authority) was sent when I was fighting with Juan Manuel Marquez in Las Vegas, Nevada. I do not know why the BIR is singling me out,” Pacquiao said.
Pacquiao fights back
“The BIR in one instance has tarnished my name by filing a criminal case against me. They value taxes more than the rights of people. Don’t tarnish the names of big taxpayers,” he said.
Pacquiao said he had complied with the BIR’s summons and sent his accountant to Lozares’ office.
However, he said, it was Lozares who was not in his office at the date specified for the submission of the documents.
Pacquiao’s lawyers led by former justice secretary Artemio Toquero said they would question the BIR’s authority to gather evidence against taxpayers.
“We intend to question the validity of the National Internal Revenue Code which gives the BIR authority to gather evidence,” Toquero said.
He said they will contest the validity of the subpoena and will ask the Supreme Court to declare it null and void.
“The subpoena and the letter (of authority) is illegal, the case filed is null and void. We will contest that in the SC,” he said.
Pacquiao hinted that his lawyers would be filing a case of violation of Republic Act 3019 (Anti-Graft and Corrupt Practices Act) against Lozares and other BIR executives.
His lawyer Abraham Espejo, also dean of the New Era College of Law, explained that BIR executives behind the case filed against the boxing champ are liable for causing undue injury to the boxing champ following the pullout of several product endorsements.
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Pacquiao fumes over ‘tax evader’ label, raps BIR
BOXING champion and Sarangani Rep. Manny Pacquiao has announced plans to file a countersuit against a Bureau of Internal Revenue (BIR) regional director who tagged him as “tax evader.”
Pacquiao, accompanied by a battery of lawyers, including former Justice Secretary Artemio Tuquero, said in a press conference the BIR was harassing him and that he already lost “millions of dollars worth of product endorsements abroad” as a result of the tag pinned on him by BIR Region 12 Director Perfecto Aranas.
“Matagal ko pong inalagaan ang malinis kong pangalan upang patuloy akong ikarangal ng aking pamilya ngunit dahilan lang sa maling bintang ng BIR, sinira nila ito,” Pacquiao said in his press conference at The Peninsula Hotel in Makati City. He said four major sponsors in the United States have decided to pull out after he was “maligned by BIR officials.”
He urged President Aquino to fire officials in his administration who are not doing their job well. “Hindi ko naman nilalahat pero dapat ang mga baluktot na opisyal dapat tinatanggal para maging tuwid ang daan kasi hindi sila nakakatulong, sila ang bumabaluktot ng daan,” Pacquiao said.
Internal Revenue Commissioner Kim Henares said the case filed against Pacquiao was not for tax evasion but for failure to obey summons. The BIR charged Pacquiao with violation of Section 266 of the National Internal Revenue Code for not responding to the subpoena sent to him instructing him to submit his tax documents.
Lawyer Abraham Espejo, dean of New Era University College of Law, said Aranas committed “undue injury to a person,” to Pacquaio in this case, in violation of Section 3-E of the Republic Act 3019, known as the Anti-Graft and Corrupt Practices Act.
Pacquaio said he was “never and never will be a tax evader” and that he “never stole money and never shortchanged the government in paying taxes.”
In fact, he said, he even received recognition from the BIR as one of the prompt top individual taxpayers in the country.
“This is obviously harassment. Congressman Pacquiao was never given a chance to explain his side,” said Tuquero.
Espejo said that based on what they gathered, a certain Jocelyn Nobria received the subpoena in behalf of the lawmaker; later, however, it was found that there was no such person in Pacquiao’s camp in General Santos.
“But why send the copy of delicate documents to General Santos City and not in Manila or in his office at the House of Representatives? They knew that Congressman Pacquiao was in the US during the time preparing for major fight against Mexican boxer Juan Manuel Marquez,” Espejo said.
Pacquiao said he wanted “the persons who maligned my name to face the axe.” He added: “Let this be a strong signal to government officials who abuse their power by making accusations without any legal basis.”
Full text of Internal Revenue Kim Henares’s reply to Pacquiao
First, the case that was filed against him was not for tax evasion. It was for violation of Section 266 of the Tax Code—failure to obey a summons.
Second, the reason he is being investigated is his tax payment for the Philippines is going down while his earnings are going up. Like everyone, when we issue a letter of authority, we ask the person concerned to submit documents to determine whether there is any tax deficiency. Like everyone else, after several notices and they do not comply, we subpoena those documents and file a case against them if they fail to produce the same. We are just applying the law to every one.
Third, as a Filipino residing in the Philippines and who is not an OFW, the person is taxed for his global income. He has to report his income from all sources—foreign and local.
Compute from his foreign-sourced income what amount of tax is due to the Philippines; he is allowed to deduct from that amount the tax he paid the foreign government. However, he should still declare it and show proof of it and the actual tax payment. If he has local income, he should declare it and pay taxes thereon. Tax payment to the US government will not cover the tax payment due the Philippines for his locally sourced income.
What we are asking from him is to provide documents of filing and tax payment in the US, his contracts for all his fights, endorsements, etc. I cannot understand what is so difficult about that.