DOJ okays tax evasion raps vs Mikey, wife

MANILA, Philippines - The Department of Justice (DOJ) has recommended the filing of P73.85-million tax evasion charges against Ang Galing Pinoy party-list Rep. Juan Miguel “Mikey” Arroyo and his wife Angela.

In a 28-page resolution released yesterday, government prosecutors found probable cause to indict the Arroyo couple for several counts of tax evasion.

The resolution was signed by Senior Assistant State Prosecutor Lagrimas Agaran, Assistant State Prosecutor Ma. Cristina Montera-Barot and Assistant State Prosecutor Mederlyn Mangalindan and endorsed by Senior Deputy State Prosecutor Miguel Gudio Jr., chairman of the DOJ Task Force on Tax Fraud Cases.

Prosecutor General Claro Arellano approved the filing of seven counts of tax evasion against Angela for her failure to file income tax returns from 2003 to 2009.

The lawmaker, on the other hand, will be facing three counts of violation of Section 255 of the National Internal Revenue Code and another three counts for failing to supply accurate information in his income tax returns from 2004 to 2006.               

Last April, the Bureau of Internal Revenue (BIR) charged the Arroyos before the DOJ for “willfully, and with intent to evade paying the correct amount of taxes due to the government, substantially underdeclared their income for taxable years 2004, 2006 and 2007.”

The DOJ added that Arroyo also failed to file tax returns for the years 2005, 2008 and 2009, with a deficiency in the total amount of P73.85 million.

This is broken down as follows: P58,636,509.01 for 2004; P252,500 for 2005; P7,953,308 for 2006; P4,473,271.95 for 2007; P1,453,500.02 for 2008; and P1,082,899.63 for 2009.

The complaint was filed after the BIR discovered the non-filing of income tax returns by Arroyo and his wife based on the information and documents gathered from the Office of the Ombudsman for Luzon and the Provincial Human Resource Management Office of Pampanga.

Based on the spouses’ Statement of Assets, Liabilities and Net Worth (SALN), their net worth for the period 2004 to 2009 considerably increased as indicated by the acquisition of several real and personal properties, including residential houses and lots in Lubao, Pampanga, La Vista Subdivision in Quezon City and in the United States, motor vehicles, stock shares and other personal effects worth several million pesos.

Using the Net Worth Method (NWM) of tax investigation, the BIR found out that there has been underdeclaration of the total amount of income by more than 30 percent, constituting prima facie evidence of a fraudulent scheme to defeat payment of taxes.

Arroyo claimed to have earned “purely compensation income” from one employer – the House of Representatives – for the years 2005, 2008 and 2009, but the DOJ said this was clearly contradicted by their SALN.

Justice Secretary Leila de Lima, meanwhile, ordered the DOJ legal division to look into the possibility of issuing a hold departure order (HDO) or Watch List Order (WLO) against Arroyo and his wife.

“I already referred it to the legal division. I asked them either HDO or WLO whichever is appropriate at this stage,” said De Lima in an ambush interview.

She said that based on the findings by the DOJ Task Force on BIR Cases and the panel of prosecutors, the formal charges could now be filed against the couple before the Court of Tax Appeals.

De Lima said even if the Arroyos would file a motion for reconsideration or petition for review, the filing of criminal information would still push through without delay.

For his part, Arroyo decried the alleged persecution by the Aquino administration.

“This does not come as a surprise. Coming from an administration that has always subjected us to persecution, we have expected it. This administration has not hidden its intent to put us behind bars. In fact this is part of the President’s marching order against our family,” Arroyo said in a statement.

“It is just unfortunate that my wife was included despite the fact that we have sufficiently disputed the allegations. But we’ve always believed in the rule of law and we will face the charges head-on because our conscience is clear,” he said.

“In the end, I know we will be vindicated and justice will be served,” he added.