BIR to Pacman: Set an example

MANILA, Philippines - The Bureau of Internal Revenue (BIR) yesterday urged world boxing champion Manny Pacquiao to lead by example and pay his taxes.

But Pacquiao insisted he is not a tax evader as he slammed the BIR for freezing his bank accounts over a P2.2-billion tax evasion case.

A BIR official, who asked not to be named, said the lawmaker should just pay his back taxes as a law-abiding citizen, noting that the government’s tax collection agency followed a standard operating procedure during its tax audit on Pacquiao.

The BIR issued a warrant of garnishment two weeks before Pacquiao’s bout in Macau Sunday, which reportedly prompted the Court of Tax Appeals (CTA) to freeze his bank deposits.

In spite of this, the congressman said he would still help typhoon survivors in the Visayas. He intends to visit Tacloban City this week.

“I have long wanted to help the victims of the typhoon and earthquake, but I was sued by the BIR without basis and my bank deposits were garnished by the BIR,” Pacquiao said.

“I could not withdraw a single centavo of my own money, I could not use it to help. The money garnished by the BIR was not stolen, it’s not PDAF or DAP. These all came from the punches, beatings, sweat and blood that I endured in boxing.”

“I was beaten up, earned money and the government took it. But those who steal… I have yet to see anybody who has stolen a lot and gotten the same garnishment,” he said in Filipino.

The BIR sued Pacquiao for alleged tax deficiency of P2.23 billion.

The case stemmed from the supposed failure of Pacquiao’s accountant to report in his income tax returns (ITRs) the millions of dollars in taxes that he paid in the US in relation to his fight purses from 2008 to 2009.

Records showed that Top Rank Inc. paid the boxing superstar $12.9 million for 2008 and $14.9 million for 2009.

Pacquiao hinted that politics was behind the case, citing that he has tried to address his tax woes.

“They ignored the information given by Top Rank and HBO and insisted I have earned more. My lawyers have given them all the requirements that they want and they still refuse to believe. I really don’t know why I am being singled out,” he said.

Pacquiao and his wife, Sarangani Vice Gov. Jinkee, appealed the case with the CTA last August in a bid to prevent the BIR from collecting the supposed tax deficiencies.

His lawyers said the BIR is subjecting the boxing champion to double taxation, noting that their client had already paid taxes in the US.

Pacquio said he instructed his lawyers to exert all possible legal means to lift the freeze order so that he could extend assistance to the victims of the calamities and to support the financial needs of his family.

Only P1.1-M frozen

The BIR clarified yesterday that the warrant of garnishment on Pacquiao’s assets involved only P1.1 million of his bank deposits and that it had been issued even before he appealed the case with the CTA.

“This is a small amount considering what he has earned in the past so I don’t see why this would have any impact on his financial position,” she said.

BIR Commissioner Kim Henares said Pacquiao’s case would have been settled had he presented the required documents two or three years ago.

Among the documents are the ITR he filed with the US Internal Revenue Service, stating the amount of tax paid.

“We have been waiting for him to present the required papers, but to date he has not done so. We gave him more than enough time to comply with our directive but he never did,” Henares said.

She disputed the boxing champion’s claim that the issuance of the garnishment order was politically motivated.

Henares said all Filipino citizens must declare their earnings locally and overseas in their respective ITRs.

Henares said Pacquiao should pay Philippine taxes as he earns a lot of money here from his advertisements and TV shows.

She also noted the boxer-politician’s decreasing tax payments in 2009 and 2010 after being named one of the highest taxpayers in 2008.

Pacquiao, who was reported to have spent $7 million in his election campaign in 2010, paid around P125 million in income taxes in 2008 and only P7 million in 2009.

Last year, he paid P22.38 million in taxes to clinch the 26th spot in BIR’s top 500 taxpayers list.

His income from endorsements in the Philippines was pegged at P109.5 million in 2009, and P13.6 million in 2008.

Records showed that Top Rank Inc. paid him a total of $12.9 million for 2008 and $14.9 million for 2009.

Palace: No harassment

Malacañang said yesterday that Pacquiao was not being singled out and that he would have to face the tax evasion case filed against him.

Presidential Communications Operations Office Secretary Herminio Coloma Jr. said the order of the CTA to freeze his bank deposits could not be a form of political harassment since processes were followed under the Internal Revenue Code.

Pacquiao held a televised press conference decrying the order.

“Harassment is not in our agenda. CTA’s action is in accordance with Internal Revenue Code. Citizens may avail themselves of appropriate legal remedies,” Coloma said when asked if Pacquiao could offer a settlement.

“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 CTA,” he added.

During the press conference, Pacquiao was asked several times if being a non-ally of the administration made him a target of the BIR.

The tax court’s First Division issued the freeze order two weeks ago but it was only known a day after Pacquiao’s victory in Macau.

Meanwhile, the House of Representatives has adopted a resolution filed by the independent bloc commending Pacquiao for inspiring the Filipino people during times of calamities.

The bloc, led by Leyte Rep. Ferdinand Martin Romualdez, expressed gratitude to Pacquiao for uplifting the spirits of Filipinos following his victory over Brandon Rios in Macau. –  With Aurea Calica