Noy to Pacman: Pay up, shut up

MANILA, Philippines - President Aquino yesterday urged boxing legend Manny Pacquiao to face his tax problems rather than cry political harassment in the media.

Aquino said the tax case against Pacquiao had been pending for two years and bringing up the issue at this time should not be construed as political harassment.

“Why would he be harassed? Where is the logic there? I understand the (frozen) accounts total P1.1 million. What is that compared to all of his winnings?” Aquino said.

“At the end of it, maybe, and with all due respect to Congressman Pacquiao, if he believes that he has complied with all the necessary rules and all the necessary laws, then I’m sure he has all the evidence,” the President said.

Aquino said the issue was that the Bureau of Internal Revenue (BIR) had been asking Pacquiao to answer the case for the past two years.

“It’s quite cavalier not to respond to legitimate summonses by the BIR,” Aquino said.

While Pacquiao earns abroad and pays taxes there, Aquino said the tax rates in the Philippines are different, and this difference has to be made up.

“So if he has – if he did right, then I’m sure he will be able to prove that he did right, and therefore there is no issue. So the way to settle it is to answer all of these queries by the BIR and not to engage in a media war. The media will not decide who is right or wrong. It will be our courts eventually, if it gets to that, who will decide.”

‘Do we have all his money?’

BIR Commissioner Kim Henares also denied harassing Pacquiao, saying it is the agency’s job to determine, assess and collect taxes as well as investigate individuals and organizations that violate tax laws.

She fired back at Pacquiao for claiming that his bank deposits were frozen by the BIR over a P2.2-billion tax case.

Henares said Pacquiao should not use the BIR as an excuse if he could not use his own money to help Typhoon Yolanda victims since his accounts had been allegedly frozen.

Pacquiao claimed he had to borrow money to help the victims since he could not access all his accounts, including his wife’s, due to the garnishment warrant issued by the BIR two weeks ago in connection with his tax case.

Henares, however, explained the warrant of garnishment on Pacquiao’s assets involved only P1.1 million of his bank deposits.

“He’s making it appear that he cannot pay his staff’s salary, he cannot continue scholarships, he cannot give relief to the Yolanda victims because of us. But the only thing that we have of his money is P1.1 million. So how can he say that he cannot do all these things because we have all his money?” Henares said.

“Instead of accusing us of singling him out, I do not need his thanks but I think he should appreciate the leeway given him. We have given him as much leeway as we can,” she added.

Pacquiao reportedly earned $67 million or about P2.9 billion from his two bouts in 2012.

In 2008, Pacquiao’s gross income reached P1.5 billion, which involved earnings from his matches abroad, his share in income from pay-per-view cable services that aired his fights, and his various endorsements.

For 2009, the boxing champ’s total unpaid tax liabilities amounted to P1.4 billion.

Henares said the BIR has no mandate to ask for any certification from the Internal Revenue Service (IRS) of the US government regarding the taxes paid by Pacquiao.

In reply to the statements made by Pacquiao’s promoter Bob Arum, Henares said all Filipino taxpayers are required to file tax returns containing detailed financial and personal information.

“It is the obligation of the taxpayer to substantiate his deduction. He (Pacquiao) should be the one to get it (tax documents), not the BIR. By the way, isn’t he (Arum) the manager, isn’t that his job?” Henares said.

Arum said in an earlier interview on ANC that Henares should have asked the IRS for the document herself.

Arum said the governments of the US and the Philippines should have corresponded with each other to get the certificate, instead of putting the burden on Pacquiao to get the certificate from the US, of which he is not even a citizen.

The BIR issued a warrant of garnishment on Pacquiao’s assets following his failure to provide the bureau with a copy of the tax return filed with the IRS.

According to the BIR, Pacquiao failed to pay back taxes, plus penalties, amounting to around P2.2 billion.

So far, the BIR has been successful at freezing only two bank accounts containing a total of P1.1 million.

Henares said the BIR has been asking Pacquiao since 2010 to submit the documents to determine whether he paid the right taxes.

Pacquiao argued that he could not present original copies of the tax payments because the IRS does not issue such documents.

No criminal case

Pacquiao, one of the highest paid athletes in the world, and his wife Jinkee have filed an urgent motion before the Court of Tax Appeals (CTA) to lift the warrants of garnishment in a bid to stop the BIR from freezing the bank accounts.

Pacquiao maintained they have already paid the taxes to US authorities, but the BIR said it has not received documents that would prove that the taxes have already been paid in the US.

The BIR has issued a warrant of garnishment on Pacquiao’s assets in a bid to collect the supposedly unpaid taxes of the boxer. Pacquiao’s camp filed an urgent motion asking the CTA to lift the warrant.

The CTA clarified yesterday that the BIR has not filed a tax evasion case against Pacquiao.

The tax court also reiterated its earlier statement that it has not issued a freeze order against the assets of the lawmaker.

CTA first division clerk of court Margarette Guzman said the BIR has not filed any criminal case against Pacquiao.

It was the other way around, Guzman said, with Pacquiao and wife Jinkee filing a petition for review against the BIR.

“There’s only the civil case… (that’s) when the taxpayer questions the actions and decisions of the (BIR) commissioner,” Guzman said.

Guzman said the BIR warrant “technically” froze the assets of Pacquiao, although it is not a court order.

She explained the BIR commissioner has the power to issue warrants of garnishment to collect unpaid taxes from taxpayers.

Guzman said the CTA first division has yet to rule on Pacquiao’s urgent motion.

Henares also clarified they are only after collecting the unpaid taxes from Pacquiao and they have not filed a tax evasion case.

She refused to comment, however, when asked if a tax evasion case would be filed against Pacquiao.

“I don’t want to talk about what could happen in the future. As far as I am concerned, we are just collecting taxes. Please pay us so we don’t have to go to the next decision point. Bayaran lang kami ng pagkautang niya (just pay us what is due us),” Henares said.

Acknowledge the honor

Presidential Communications Operations Office Secretary Herminio Coloma Jr. expressed optimism that the issue would have proper resolution as he maintained Pacquiao was being treated fairly.

Coloma said they could not possibly harass Pacquiao at this time because they also “acknowledge the honor” he brought to the country and the inspiration he gave the people, especially after the super typhoon hit the country.

Coloma stressed the issue was a matter that must be resolved by the BIR, not by Malacañang.

He added the Aquino administration is always committed to do what is right and not what is popular, without belittling the status of Pacquiao as the pride of the people.

Coloma, however, reiterated Pacquiao must also serve as a role model by showing that he is a law-abiding citizen.

Valenzuela City Rep. Magtanggol Gunigundo said Pacquiao might have failed in securing the services of a good lawyer and accountant that eventually led to his tax woes.

Gunigundo said Pacquiao’s problems with the BIR appear to be on documentation.

“Maybe Pacquiao’s lawyers and accountants committed some lapses, as it appears the allegations against him have some basis,” Gunigundo said.

“I hope he’s able to resolve this with good and trusted lawyers and accountants,” he said.

San Juan City Rep. Ronaldo Zamora earlier advised Pacquiao to “get a good accountant and a good lawyer.”

Zamora said he gave the advice to Pacquiao “because the reason is many of his problems are really documentary in character.”

“I don’t think he owes the Philippine government anything. But you know I’m only reading the newspapers. He made a tremendous amount of money and of course he has to pay tremendous amount of taxes,” Zamora said. –  Zinnia dela Peña, Evelyn Macairan, Janvic Mateo, Paolo Romero