EX-SSS CHAIR NERI FACES TAX EVASION CASE / NOY WARNS RH BILL ADVOCATES
MANILA, MAY 14, 2011 (STAR) By Edu Punay - The Department of Justice (DOJ) ordered yesterday the filing of a tax evasion case involving P13.6 million against former Social Security System (SSS) president Romulo Neri (photo at left).
In a 22-page resolution written by Assistant State Prosecutor Amor Robles, the DOJ said it has found probable cause to indict Neri based on a complaint filed by the Bureau of Internal Revenue (BIR) in November last year for two counts of alleged violation of Section 255 of the National Internal Revenue Code (NIRC).
The tax case stemmed from Neri's alleged failure to declare his income earned as board member of Philex Mining Corp. and Unionbank of the Philippines, in which the pension fund owns shares.
"...as correctly pointed out by the complainants, respondent (Neri) under-declared his gross income for years 2008 and 2009 by more than 30 percent of the income declared in his return," the DOJ stressed.
By not declaring his income as Philex and Unionbank board member, Neri "failed to pay his correct and accurate taxes," the DOJ alleged.
"Respondent, a registered taxpayer required by NIRC to pay any tax or supply correct and accurate information, failed to supply such correct and accurate information pertaining to all income and compensation received by him for taxable years 2008 and 2009," it explained.
The BIR alleged that Neri earned P11.3 million in 2008 and P34.2 million in 2009, but did not fully declare the incomes, hence a tax deficiency of P6.2 million in 2008 and P11.9 million in 2009.
In a counter-affidavit, the former official claimed that he remitted half of his entire stock earnings from Unionbank in 2008 amounting to P7.9 million to the SSS.
But the DOJ said his income tax return for that year showed that his declared earnings from his shares in the bank amounted to only P408,600.
Neri, according to the DOJ, also failed to prove that he did not benefit from his Unionbank earnings or if the SSS had really received part of such earnings.
Neri had admitted that his profit sharing income from the bank for 2009 amounting to P15.4 million was not completely reflected in his ITR because he only received the bulk of the amount in January last year and that it was supposed to be declared in his 2010 ITR filed only last April.
"The documents presented by the respondent provide contradictory statements. Unionbank issued a certification indicating compensation for the services rendered in 2009, while Check No. 302581 indicates the date as 22 Jan. 2010 in the amount of P7,715,518.26 and SSS Form R-6 also indicates the date 22 Jan. 2010," the DOJ countered.
The DOJ also junked Neri's argument that the BIR did not give him the chance to answer the charges before a complaint was filed with the DOJ.
The DOJ cited a ruling of the Supreme Court on the case of Lucas Adamson vs. Court of Appeals and former BIR commissioner Liwayway Vinzons-Chato, which states that "assessment of deficiency is not necessary to a criminal prosecution for willful attempt to defeat and evade income tax."
Neri's lawyer Paul Lentejas denied the allegations raised against the official.
In a phone interview, he said they would no longer seek an appeal with the DOJ and would instead go straight to the Court of Tax Appeals to contest the resolution.
Neri served as SSS president and director general of National Economic and Development Authority under former President and now Pampanga Rep. Gloria Macapagal-Arroyo.
Last month, the BIR filed a P73.85-million tax evasion case against Mrs. Arroyo's son Ang Galing Pinoy Rep. Juan Miguel "Mikey" Arroyo and his wife Angela.
Also yesterday, the DOJ approved the filing of tax cases against Dynatel System Corp. involving P20.28 million in connection with its sale of aerial camera to the Philippine Air Force in 2006; Cleansmart Janitorial and Allied Services for alleged nonpayment of over P4 million in taxes; and Mel Velarde and lawyer Angeline Macasaet for undervaluation of sales of a $1.2-million property in 2009.
Meanwhile, the DOJ gave Mikey Arroyo and his wife more time to answer the charges against them, upon the request of their lawyer Ruy Rondain.
Rondain said Mikey failed to attend the hearing yesterday set by the investigating panel chaired by Senior State Prosecutor Lagrimas Agaran because he was in the US for a meeting with supporters of his party-list group. His family was with him, according to Rondain.
He said Mikey has not yet received a subpoena from the DOJ while his wife got hers in the house of her parents in Forbes Park, Makati City only last Saturday.
The DOJ panel then gave the respondents until May 26 to submit their counter-affidavits.
"They want to defend but they're not here. They want to respect the legal investigative process," he explained.
"The BIR said he did not file ITR (income tax return). But I myself have records and I know for
a fact that he did file his ITR. And that increase in net worth can be justified," Rondain said.
The BIR said the couple only paid P2.4 million, P1.7
million and P376,000 in taxes for the years 2004, 2006 and 2007, respectively despite purchase of several properties worth millions from 2004 to 2009 – including residential houses in the US, in Lubao, Pampanga and in La Vista Subdivision, Quezon City.
Nothing personal
Malacañang said Neri's link to the previous administration has nothing to do with the filing of tax charges against him.
"That's the way things should be," said deputy presidential spokesperson Abigail Valte.
"We can't do anything about it because we do follow the rule of law," she added. "There was sufficient basis" for the filing of the case, she added.
She said the BIR had filed tax evasion charges against a relative of a Liberal Party stalwart.
"I don't have the number on top of my head but many tax evasion cases had been filed whether against perceived allies, perceived enemies, ordinary citizens," Valte pointed out.
She said BIR Commissioner Kim Henares herself told her about a relative – an LP member – who is facing tax charges.
Swifter tax probe
President Aquino, for his part, is happy with the progress of tax cases but is asking the BIR and the Department of Finance to find ways to expedite their resolution.
Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang said the President met with Henares, Justice Secretary Leila de Lima and Finance Secretary Cesar Purisima to review the progress of the tax evasion cases.
"The President is happy with the pace in which the cases are being filed and we're confident that the cases are solid. But there's a tendency that once the cases go to court, that the process tends to take a while. So the President asked the three of them to look for ways that could possibly speed up the adjudication process," Carandang said.
"Of course we will respect the process and we will abide by the court process but within that context, the President wants to see if there are ways that the pace of the cases can be sped up a little bit," he said.
Carandang stressed the tax evasion case against Mikey was not taken up because the meeting was a general review of the progress of the cases.
"They have to go back and look because there are many elements in this process that we don't have control of, it's the judiciary. So within that context, what can be done," Carandang said.
"They all do (want faster resolution). It's not just the President. I think Purisima and De Lima, and Henares also want the cases to move forward more quickly. Again, you have to respect the judicial process," Carandang said.
"So how do you that and perhaps speed up the cases? The cases are strong. It's just that the process gets bogged down in the courts. So he tasked them to sit down again and look for ways to expedite the cases, still respecting the judicial process," he said.
"You can't set aside the judicial process. He left it to them. It's something for the lawyers to figure out because it takes a lot of knowledge about the legal processes. The ideas would primarily come from Henares and De Lima," Carandang said.
The President earlier said the tax evasion cases now involved P12.5 billion and that there would be no sacred cows in the prosecution of tax cheats.
Eye on gold traders
The BIR, meanwhile, will also look into the multibillion-peso gold trading industry in the Philippines, as some companies may not be filing the right amount of income taxes for their gold sales.
The BIR yesterday filed with the DOJ three separate tax evasion cases amounting to P5.913 billion against three gold traders.
The agency filed a case against Aurelio Baring, a Bulacan-based gold trader for five counts of tax evasion, 15 counts of failure to file quarterly income tax returns and five counts of failure to file annual income tax returns.
Henares said that Baring sold gold to the Bangko Sentral ng Pilipinas (BSP) from 2005 to 2009 amounting to P3.21 billion.
The BIR said the agency was able to obtain from the BSP information regarding the gold sales of Baring and found out that he had a tax deficiency of P2.22 billion from 2005 to 2009.
The second case was filed against a Manila-based gold trader, Rex Chua Co Ho, for five counts of attempt to evade taxes and five counts of failure to pay the correct taxes.
Henares said the documents obtained by the agency showed that Ho sold gold to the BSP amounting to P4.95 billion.
The BIR chief said that based on information from the BSP, Ho had a total deficiency tax of P3.1 billion.
The third case was filed against Remegio Descalsota, Jr. for five counts of tax evasion and five counts of willful failure to supply correct and accurate information in his annual income tax returns. With Iris Gonzales, Aurea Calica, Delon Porcalla
Noy warns anti-RH advocates on non-payment of taxes By Delon Porcalla (The Philippine Star) Updated May 14, 2011 12:00 AM
Manila, Philippines - President Aquino yesterday issued a stern warning against anti-reproductive health groups encouraging civil disobedience by espousing nonpayment of taxes, saying it is a "very serious offense" that can make them liable for sedition or rebellion.
"I will be surprised if somebody will say that publicly because if I'm not mistaken, that is a grave offense, I think sedition will be the charge that will be filed for your not doing your civic obligation," Aquino said.
Though not a lawyer, Aquino revealed there is already substantial jurisprudence on the matter.
"We have many precedents on this (non-payment of taxes), our laws are strict on this," he said.
Aquino stressed the consequences of the actions of groups espousing nonpayment of taxes as part of civil disobedience against the passage of the Reproductive Health (RH) bill.
Under criminal laws, sedition is an offense where people, mostly civilians, burn flags and other government paraphernalia in public or before government institutions, with the end in view of taking up arms or toppling a legitimate government.
It is almost the same as rebellion, although the latter apparently has a military component that conspires with a group of people whose objective is to take over the government by force.
Aquino, on the other hand, hinted he may not certify the RH bill as urgent, primarily because there is no pressing need for Congress to approve it.
Aquino cited the proposals calling for the postponement of elections in Autonomous Region in Muslim Mindanao (ARMM) as urgent since the elections in the region would be held on Aug. 8.
"There is also a constitutional provision when you can certify a certain bill as urgent. And at this point in time, I think I've only certified as urgent one bill, the postponement of the ARMM elections since it would be held in August," he pointed out.
Aquino made the statement in reaction to the call of former President Fidel Ramos, a pro-RH advocate, who wanted Aquino to certify the RH bill as urgent so that it would be enacted into law at the soonest possible time.
Aquino said he might include the RH bill in the next list of priorities.
"The first list that we submitted to Congress was 23 or 24 measures already," he said. Ramos said Aquino had nothing to fear since many have already expressed their support for the passage of the RH bill.
The former president led pro-RH advocates in a rally in Quezon City that was attended by celebrities, including international singer and actress Lea Salonga.
On the other hand, anti-RH groups led by the Catholic Bishops' Conference of the Philippines (CBCP) are embarking on a campaign in the Visayas region.
Eastern Samar Rep. Ben Evardone appealed to the CBCP and anti-RH bill groups against waging a civil disobedience campaign.
Evardone said the CBCP's reported threat to withdraw support from the Aquino administration as well as allied groups in favor of the RH bill is "totally uncalled for." "Malacañang's move to engage all sectors in a dialogue on the RH bill should be maximized by anti-RH advocates to air their objections and proposals on specific issues and provisions of the bill," Evardone said.
"We should not resort to threats, intimidation and harassment," he added.
Muslim groups, on the other hand, expressed full support for the RH bill.
The Southern Philippines Muslim Unity and Development (SPMUDA) led by Aliasgar Solaiman said they are supporting responsible parenting and freedom of choice and access to information for family planning under the RH bill.
Datu Camad Ali, founding president of the SPMUDA, said he is supporting the RH bill.
"I understand arguments for and against RH bill. There are many valid arguments on both sides and I can understand where everybody's coming from as far as what their belief system is. Basically, you have to go with what your conscience tells you and you would have to know what is right for you without trampling upon somebody else's belief," Ali said. – With Paolo Romero, Ben Serrano
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