Lucio Tan wins round one of tax evasion case

Nearly 12 years after charges were filed by the Bureau of Internal Revenue (BIR) against beer and tobacco magnate Lucio Tan, the country’s largest tax evasion case finally went to trial yesterday, but did not get far on opening day.

Tan is accused of evading over P25 billion in taxes.

Disagreement between the prosecution and the defense over how the charges should be tried shortened the hearing at the Marikina City Metropolitan Trial Court to less than an hour.

Judge Alex Ruiz, of Marikina MTC branch 75, set the next trial date for April 1.

Because of the disagreement, the defense blocked state prosecutors from the Department of Justice from presenting their first witness, Liwayway Vinzons-Chato, who initiated the tax evasion charges during her stint as BIR chief in 1993.

Yesterday’s arguments revolved around lead defense attorney Estelito Mendoza’s suggestion to the prosecution that the trials against his client be "consolidated" to speed things up and resolve the cases "hopefully during the lifetime of the accused." He also cited the years of legal wrangling over the case before it went to trial.

Citing legal procedure, Mendoza said the three separate tax evasion charges against Tan should normally be tried separately. Because that could take years to resolve, he proposed that the trials be consolidated and that the prosecution file a motion for that purpose.

According to the charges, Tan’s Fortune Tobacco Corp. evaded paying taxes from 1990 to 1992.

In 1993, the BIR, then under Chato, filed a case against Tan, accusing him and several Fortune officials of evading P7.68 billion in ad valorem, income and value-added taxes in 1992. The bureau later filed two more cases, accusing Tan of not paying P9.51 billion and P8 billion in taxes in 1990 and 1991, respectively.

"Under the rules, evidence may only be admissible if relevant. The question of relevance cannot be decided if it is not clear what case is being tried," Mendoza said. "Evidence for (the) 1990 (tax evasion case) cannot be the same evidence for 1992 or 1991. That is why as a basic procedure where there are distinct informations there should be separate trials."

As long as the prosecution does not file a motion seeking a consolidation of trials, the charges should be tried separately, Mendoza concluded.

Ruiz gave the prosecution until March 18 to submit their written comment on Mendoza’s trial consolidation proposal.