Neri pleads not guilty to tax evasion

MANILA, Philippines - Former Social Security System (SSS) president Romulo Neri pleaded not guilty to charges of tax evasion during his arraignment Wednesday at the Court of Tax Appeals (CTA).

“I pleaded not guilty, of course,” Neri said, adding

that he is, however, leaving it to the judicial process to decide on the matter.

“Let the process happen,” he said.

Neri was charged with tax evasion by the Bureau of Internal Revenue (BIR), which alleged that he did not declare income or paid taxes on the stock dividends he received from several listed companies as representative of the SSS in their respective boards.

Neri allegedly failed to declare P18.3-million worth of income from stock dividends.

As SSS chief, Neri represented the agency in the board of several listed companies such as Philex Mining Corp. and the Union Bank of the Philippines.

The BIR’s tax case against Neri stemmed from an inquiry conducted by the Senate finance committee on the perks and salaries of executives in government-owned and controlled corporations.

Neri received at least P11.86 million from the sale of stock dividends from Philex, according to the Senate investigation.

During the hearings at the Senate, lawmakers said the stock dividends should have gone back to SSS and not to Neri because his representation in the Philex board was by virtue of SSS’s investments in the company.

The BIR said Neri earned only P100,000 a month as head of the state-owned pension fund.

Neri considered the stock dividends as part of his compensation but the BIR alleged that Neri only paid a tax of 15 percent on the sale of the stocks and not 32 percent income tax rate as he was supposed to.

The BIR also alleged Neri received stock options from Philex at least four times from May 2009 to March 2010.

BIR data showed that in May 2009, for instance, Neri received 495,000 shares from Philex at a price of P5.76 per share. Neri later sold this at P11.75 per share.