Philippines Bureau of Internal Revenue (BIR) Violates and Bypass the Supreme Court’s power to Freeze Pacqiao’s Bank Accounts

WHY ME? Professional boxer and Sarangani Rep Manny Pacquiao cries foul over a Court of Tax Appeal order to freeze his bank accounts. File photo by Rappler

 

Philippines Bureau of Internal Revenue (BIR) Violates and Bypass the Supreme Court's power to Freeze Pacqiao's Bank Accounts

 

Manny Pacquiao says bank accounts frozen over ₱2.2-B tax evasion case

 

Two days after his dramatic boxing comeback in Macau, Manny Pacquiao faced a more formidable opponent at home, after his bank accounts were reportedly frozen in relation to a P2.2-billion tax case.

 

Saying that even thieves are better treated by the government, the boxing champion said that he will have to borrow money to help Yolanda victims. Pacquiao is expected to visit Leyte this week.

 

"Inihabla po ako ng BIR (Bureau of Internal Revenue) ng ₱2.2-billion tax case na wala pong basehan," Pacquiao said in a press briefing Tuesday.

 

"Huwag po sana akong i-single out at personalin dahil hindi po ako magnanakaw," Pacquiao added, noting he "worked hard" to earn his assets.

 

After returning to the Philippines with his boxing career back on the upswing after a victory over American Brandon Rios on Sunday in Macau, Pacquiao was greeted with a news report that his assets were frozen.

 

On Tuesday, the Manila Bulletin newspaper reported that the Court of Tax Appeals' (CTA) First Division issued the order two weeks ago, but it only became known on Monday.

 

According to the Manila Bulletin, the tax case stemmed from the supposed failure of Pacquiao's accountant to report in his income tax returns (ITR) the multi-million-dollar taxes collected by the US Internal Revenue Service (IRS) from his prize winnings for the years 2008 to 2009, reportedly amounting to $28 million.

 

What freeze order?

 

But in a separate interview with GMA News Online on Tuesday, Margaret Guzman, CTA clerk of court, denied that the CTA First Division – which handles the boxing icon's tax case – issued such a freeze order.

 

Guzman said the tax court is indeed hearing a tax evasion case against Pacquiao filed by the BIR last August 1, but has not yet issued any order to freeze the boxer's bank accounts.

 

The case stems from a BIR assessment that alleged the Pacquiaos had incurred "deficiency income and value-added tax" from 2008 to 2009, worth P2.2 billion.

"It wasn't the court that froze the accounts of spouses Pacquiao, contrary to the news," Guzman said, adding that the news reports were probably referring to an order issued by the BIR to the banks.

 

"The BIR has the power to issue warrants of garnishment separate and distinct from a court order freezing accounts," Guzman said.

She said the Pacquiaos filed a motion last October 18 to lift the said "warrants of distraint and levy, and garnishment."

 

Guzman said the CTA is set to resume its proceedings for the tax case on December 5, during which it would hear the counter evidence to be presented by government against Pacquiao's motion to lift the warrant of garnishment.

 

The CTA First Division is chaired by presiding Justice Roman del Rosario.

 

Thieves get away

 

Pacquiao said he provided information on his income to the BIR, but the bureau ignored it.

 

"The BIR claims I earned more than what I actually did, without any evidence to back it up. They ignored information given by Top Rank and HBO and insisted I have earned more.

 

My lawyers have given them all the info that they want and they still refuse to believe. I really don't know why I am being singled out," Pacquiao said.

 

"Hindi naman ako tumatakas. Alam nila yung ginagawa nila," Pacquiao added, implying that he felt he was a victim of politicking.

 

Pacquiao commented on how those engaged in corruption in government get away with their sins, while he is being persecuted.

 

"Nagpabugbog ako, kumita ako, kinuha ng gobyerno. Pero pag nagnakaw ka [di naman nakakasuhan.] Wala pa akong nakitang nagnakaw ng marami, pero na-garnish lahat ng pera," he said.

 

The solon said he is mulling over the idea of asking for help from his compatriots in the House of Representatives to issue a resolution to dismiss his case.

 

Revenue officials noted that Pacquiao, a Filipino citizen and congressional representative of Sarangani province, is required to declare in his ITR all his earnings.

 

Pacquiao's lawyers countered that the boxer did not include remittances to IRS worth around $8.4 million in his income statement due to existing treaty between the Philippines and the United States that disallows double taxation, the report noted.

 

The boxer added that the BIR order was "arbitrary" and its assessment unreasonable as it is greater than the boxing champ's net worth.

 

But the BIR argued the tax debts have become "demandable... and collectible," as Pacquiao has been ignoring a final assessment notice sent to him.

 

"Kasama 'yung properties ko [sa garnishment]. 'Di natin magagalaw [ang mga ito]," Pacquiao said during the press briefing.

 

The boxer, who was preparing to visit the typhoon-devastated city of Tacloban, said he borrowed money for the relief operations.

 

"Umutang po ako ng pera upang makatulong sa mga nasalanta ng bagyo dahil ginarnish ng BIR ang aking bank accounts," Pacquiao said.

 

"Huwag po kayong mag-alala diyan sa Tacloban. Darating at darating ako kahit mangutang ako ulit. Naghahanda pa po kami," he added.

 

 

 

Not harassment

 

Malacañang, meanwhile, distanced itself from the issue.

 

"We are a government of laws not of men. The Internal Revenue Code provides for procedures on collection so this matter is best addressed by the Court of Tax Appeals," Presidential Communications Operations Office (PCOO) head Herminio Coloma Jr. said during a press conference on Tuesday.

 

"Harassment is not in our agenda... CTA's action is in accordance with Internal Revenue Code. Citizens may avail themselves of appropriate legal remedies," the Palace official added.

 

Pacquaio was the 36th top tax payer in 2012, paying a toal of ₱22 million in income tax, BIR data showed. He ranked 158th for paying P6.1 million in income taxes in 2011.

 

In 2008, Pacquiao paid over ₱125 million in income tax, making him the top taxpayer that year.

 

Pacquiao's tax payments declined to some ₱7 million in 2009 and ₱9.190 million in 2010, BIR data also showed.

 

– with reports from Rapler.com and by Mark Merueñas/ Patricia Denise Chiu/Kimberly Jane Tan/Siegfrid O. Alegado/VS/HS, GMA News

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Philippine Internal Revenue Bureau frozen bank accounts of boxing hero Pacquiao for tax evasion case

Manny Pacquiao punches Brandon Rios in their welterweight boxing bout in Macau

Philippine boxing hero Pacquiao floored in tax fight

 

Philippine boxing hero Manny Pacquiao said Tuesday authorities had frozen all his domestic bank accounts over allegations of unpaid taxes from lucrative fights in the United States, leaving him financially paralyzed.

 

"This is harassment," the former eight-division world champion said in an interview on ABS-CBN television, as he disclosed for the first time a freeze order issued by the Philippines' Bureau of Internal Revenue in recent months.

 

The shock announcement came just two days after Pacquiao, 34, resurrected his boxing career with a unanimous point's decision over American Brandon Rios in Macau.

 

The victory, which Pacquiao dedicated to the victims of Super Typhoon Haiyan that claimed thousands of lives in the Philippines this month, added to his lustre among millions of ordinary Filipinos.

 

Pacquiao is now eyeing more lucrative fights in the United States. He is also pursuing a political career in the Philippines, where he is a second-term congressman with ambitions of eventually becoming president.

 

Pacquiao said the tax office took the action because it believed he had evaded paying 2.2 billion pesos ($50.2 million) in taxes on his fights in the United States in 2008 and 2009 when he was at the peak of his career and earning tens of millions of dollars.

 

He said he had already paid taxes on those earnings in the United States, which has a treaty with the Philippines that allows citizens of both countries to avoid double taxation.

 

However, he said the tax bureau had rejected the documents he provided to prove he had already paid the US Internal Revenue Service.

 

"I am not a criminal or a thief. I am not hiding anything. I will face my problems as they come," Pacquiao said.

 

"I have already paid my taxes in America. Had I not paid the correct taxes they (US authorities) would have come after me and I would not have been able to travel there."

 

Philippine taxman hits back

 

The Philippine tax bureau confirmed the local bank accounts of Pacquiao and his wife Jinkee had been frozen.

 

However tax commissioner Kim Henares denied any harassment, saying only two bank accounts containing a total of 1.1 million pesos were frozen.

 

"Don't tell me he only has 1.1 million pesos. Where is the rest of (his) money? I have no idea. It has not been garnished (seized)," she told AFP.

 

Only two domestic banks reported holding Pacquiao's accounts, Henares said.

 

She said Pacquiao had failed to submit the proper documents proving he paid taxes in the United States.

 

Tax officials gave Pacquiao two years to respond to their assessment but all he submitted was a letter from his US promoter Top Rank saying he had paid his taxes in the United States, according to Henares.

 

"This is a mere scrap of paper. Anyone can write that," she said.

 

Henares said she could not understand why the wealthy sports hero was bringing up the tax dispute now.

 

"Maybe he should hire better lawyers and accountants," she added.

 

The Pacquiaos have asked the Court of Tax Appeals to lift the bank freeze, but it has yet to rule on the couple's petition, according to court papers released to the media.

 

President Benigno Aquino's spokesman Herminio Coloma brushed off suggestions Pacquiao was being singled out for political harassment.

 

"We are a government of laws, not of men," Coloma told reporters.

 

The government has been running a campaign against high-profile tax evaders, targeting movie stars as well as businessmen who flaunt their wealth through flashy sports cars.

 

Pacquiao said most of his cash was kept in the Philippine bank accounts. He did not say how much had been garnished.

 

He said the freeze order had left him without money to pay his staff, and forced him to borrow "not less than one million pesos" to fulfil pledges to help victims of Super Typhoon Haiyan.

 

At his peak Pacquiao was regarded as the best pound-for-pound fighter in the world, becoming the only man to win world titles in eight weight divisions.

 

The former street kid who ran away from home to pursue a boxing career became one of the globe's wealthiest athletes.

 

But his career nosedived after suffering two losses last year, the second in a humiliating knockout to Mexican Juan Manuel Marquez that prompted questions over whether the ageing warrior should retire.

 

But even last year, Forbes magazine listed him as the 14th highest-paid athlete globally with an estimated $34 million in earnings.  AFP News

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