MANILA, Philippines - Ang Galing Pinoy Rep. Juan Miguel “Mikey” Arroyo and his wife Angela were slapped with criminal charges by the Bureau of Internal Revenue (BIR) before the Department of Justice (DOJ) yesterday for allegedly evading payment of taxes worth P73.85 million from 2004 to 2009 while his mother was still president of the country.
BIR Commissioner Kim Henares told reporters in the DOJ that her office filed the complaint after gathering ample evidence during investigation, preempting the claim of Arroyo that the case was part of a purported battery of harassment suits against the former administration.
But Arroyo maintained that he has been faithfully paying the correct taxes and accused the BIR of being out to “crush” him.
In its complaint, the BIR accused the couple of wrongful declaration of taxable income and non-filing of income tax returns (ITR), which are punishable under section 254 and 255 of the National Internal Revenue Code.
It was learned that the lawmaker only paid BIR P2.4 million, P1.7 million and P376,000 in taxes for the years 2004, 2006 and 2007, respectively, when he and his wife bought several properties worth millions from 2004 to 2009 – including residential houses in the US, in Lubao, Pampanga and in La Vista Subdivision in Quezon City.
The BIR patterned its investigation on the Arroyo couple’s case to the method used by US authorities against gangster Al Capone and found out “substantial underdeclaration of income by over 30 percent” in those three years.
“Under the Tax Code (NIRC), underdeclaration of taxable income of more than 30 percent is considered a prima facie evidence of fraudulent return,” Henares said.
Arroyo also supposedly did not file ITR in the taxable years 2005, 2008 and 2009, while his wife also did not file any ITR from 2003 to 2009.
“The act of non-filing of their ITRs is evident of their fraudulent scheme to defeat payment of taxes,” the BIR chief said.
If found guilty, the couple could face imprisonment of up to four years and fine of at least P30,000 for each count of underdeclaration of taxes and imprisonment of up to 10 years and P10,000 fine for each count of non-filing of ITR.
Pure political harassment
Arroyo described the charges against him as “pure political harassment” since he was given from April 5 ten days to answer questions on his statement of assets and liabilities and net worth (SALN) and suddenly Henares announced to the media the filing of a tax evasion complaint against him two days later.
“My conscience is clear. I pay my taxes properly. I don’t know where these (charges) are coming from. I have nothing against any government looking into our tax payments or running after those who have tax issues,” Arroyo told The STAR.
“All that I ask is (for them) to observe due process but if that’s how they do it, they’re really out to crush me,” he said.
He said after he received the notice from the BIR on April 5 or the birthday of his mother, former President and Pampanga Rep. Gloria Macapagal-Arroyo asking him to explain the alleged discrepancy between his known assets and tax payments, he immediately consulted his lawyer, Ruy Rondain.
Rondain advised him to personally go to the BIR office with all his documentary evidence. But he said it was in “bad faith and in bad taste” that Henares sought his prosecution before the 10 days have lapsed.
Arroyo said obviously the Aquino administration is looking for a whipping boy and resorting to gimmickry to cover up its failures, even citing that unlike President Aquino, he does not have a Porsche sports car.
“Clearly, this administration is resorting to political gimmickry as its popularity rating is declining due to its failure to arrest the rising prices of fuel, electricity, water, canned goods, bread and other basic commodities. While the rating of the Vice President, the Supreme Court and Congress continue to rise, the President’s rating is consistently declining. Which is rather unfortunate as if they could do this to me, an elected public official of the land, then what would stop them from doing this kind of harassment to ordinary people?” he said in a statement.
He said the Aquino administration has a penchant for disregarding due process.
He said his wife Angela should not be dragged into the case “since she has nothing to do with this.”
He said now that the matter would be brought to the court, the rules of evidence should prevail.
Rondain said his client has yet to receive a copy of the complaint.
“I would say there is no case because Mikey is not hiding anything. But let’s wait first for the copy of the charges otherwise we’d be speculating or making innuendoes and be no better than them,” Rondain told The STAR.
He said despite the attempt to pillory his client before the public, he is confident that the court would rule in their favor.
“As you know the court rules based on evidence,” Rondain said.
Info from a tipster
Henares revealed that their investigation against the couple stemmed from information from a tipster.
She also immediately clarified that the filing of the charges is based on evidence gathered during investigation and should not be given any political color.
“We have been filing cases since July 15 last year. It’s only now that we filed one against Mikey. If their argument is we are singling out, then we should have filed this case long ago,” she said.
The BIR chief added: “The fact is we don’t do that. We file because of evidence and not because of any personality.”
She also dismissed reported claims of the couple that most of their properties came from wedding gifts.
“The only donations or wedding gifts acceptable are dowries from parents not more than P10,000. Other than that, everything else is taxable. He should have stated those in his SALN.”
Due process
Meantime, Justice Secretary Leila de Lima assured the respondents they would be accorded due process in the preliminary investigation of the complaint.
She said the complaint would be resolved expeditiously just like an ordinary case in the DOJ.
But De Lima revealed that her office would evaluate if other possible charges could stem from the information gathered by BIR – considering that Rep. Arroyo is a public official.
Serious campaign
For his part, Finance Secretary Cesar Purisima said that the cases filed against the Arroyo couple show that the Aquino administration is serious in its fight against tax evaders.
“The cases that we filed today are testaments to the Aquino administration’s continued drive against tax cheats who think that they are above the law. The ways of the past are over. Let me repeat for those who still believe otherwise – it is no longer business-as-usual. The Aquino government is determined to send to jail all tax evaders and smugglers that rob the Filipino people of their much needed government revenues,” Purisima said.
But Senators Ferdinand Marcos Jr. and Juan Miguel Zubiri want to know if the government is dead serious in going after tax evaders or only those who they perceive to be supporters of the past administration.
“Well, I am curious to see if this, like the ARMM issue, like the impeachment issue, if this is in fact a legal proceeding or a political one,” said Marcos, after emerging from the three-hour hearing of the Senate on proposals to postpone the Autonomous Region in Muslim Mindanao (ARMM) elections in August.
While they welcome the present administration’s campaign against corruption, Marcos and Zubiri challenged the allies of President Aquino to not be selective in going after alleged tax evaders.
Zubiri said the President’s men should be equal in treating other law violators or would-be violators.
On the other hand, Liberal Party stalwart Sen. Teofisto Guingona III defended the administration from criticism that the move was part of a political vendetta.
“It’s really more of following the laws rather than political vendetta,” he said.
The case against the Arroyos is the 37th case filed by the BIR under its Run After Tax Evaders (RATE) program.
The BIR, the government’s main revenue agency, is tasked to collect P940 billion this year. – With Iris Gonzales, Paolo Romero, Christina Mendez