P32.7-M tax evasion case filed vs Pichay

MANILA, Philippines - A month after his dismissal as chairman of the Local Water Utilities Administration (LWUA) for graft, former Surigao del Sur congressman Prospero Pichay is now facing charges for tax evasion.

In a case filed with the Department of Justice (DOJ) yesterday, BIR Commissioner Kim Jacinto-Henares said Pichay evaded payment of P32.73 million in taxes through non-filing of income tax return in 2009.

Henares, in a press conference, said Pichay’s statements of assets, liabilities and net worth (SALN) showed a substantial increase of around P58.5 million in his net worth in 2009 from the previous year’s figure.

It was also found that the dismissed official acquired millions of pesos worth of properties in 2009, including a residential lot in Las Piñas and a residential house in Marikina. Records also revealed Pichay’s acquisition of vehicles and an airplane.

“Despite receipt of substantial amounts of income as shown by his acquisition of numerous properties and possession of large amounts of cash, Pichay failed to file any annual Income Tax Return (ITR) and to pay the corresponding taxes due thereon for taxable year 2009,” the BIR said in the case filed with the DOJ.

The BIR chief explained that Pichay was required to file his ITR in 2009 since he was not covered by privilege of substituted filing.

“The regulation for substituted filing of income tax returns (ITR) only applies to those employed by one employer. In the case of Pichay, he is employed by three different companies so he should have filed his ITR,” Henares said.

Apart from LWUA, Pichay was also director of LWUA Consult Inc. and Express Savings Bank Inc. Pichay’s failure to file ITR was a violation of sections 254 and 255 of the National Internal Revenue Code of 1997, according to Henares.

Pichay called the filing of the tax case a “persecution of officials of the previous administration.”

“They’re trying to demonize officials of the previous administration,” he said in an interview with ABS-CBN News Channel.

“For the record, I want the public to know that I have been paying my taxes regularly and religiously. There is no big jump (in my assets) in 2009, that’s not true. And I file my ITR every year. I have my records,” he said.

But the BIR dismissed Pichay’s claim.

“We have never been but fair. We have been prodded by various sectors several times to file cases against people. But the only time we file cases is if we have evidence,” Henares explained.

Malacañang also rebuffed Pichay's claims that he and other Arroyo officials were being persecuted.

“I don’t think he's that high, first of all. Secondly, if he committed wrongdoing he should just explain. They should not always say they are being politically persecuted. The best answer is for them to prove if they filed an ITR (income tax return) or not,” presidential spokesman Edwin Lacierda said.

 “This is a question of non-filing of ITR. So the answer to that... is very, very simple: Did you file income tax return in the years 2008 or 2009? If you did not file then it’s clear there is a tax evasion case – not because you are a past official of the Arroyo administration,” Lacierda said, adding other private individuals were also being slapped with tax evasion charges.

Earlier, Pichay was ordered dismissed by the Office of the Ombudsman for grave misconduct for “unlawful disbursement” of P780 million in LWUA funds for investments in the bankrupt Laguna-based thrift bank Express Savings Bank Inc. (EXSBI).  

The tax evasion charge against Pichay was the 57th such case filed with the DOJ during the first year of the Aquino administration. 

Also yesterday, the BIR filed a tax evasion case against businessman Carlo Sera, operator of Total Gas Station in Gerona, Tarlac.

Sera was accused of “willful attempt” to evade payment of tax and of deliberate failure to supply correct and accurate information in his ITR for 2007 and 2008.

The businessman had declared in his ITR purchases of P540,000 in 2007 and P1.02 million in 2008, but BIR investigation showed purchases amounting to P53.14 million and P52.51 million in those years.

“As a result of his underdeclared sales and failure to register as value-added taxpayer, Sera was assessed an estimated aggregate deficiency tax liability for taxable years 2007 and 2008 amounting to P82.54 million,” the BIR alleged. – Iris Gonzales, Aurea Calica