De Lima orders filing of tax evasion raps vs Mikey, wife

MANILA, Philippines - Justice Secretary Leila de Lima today ordered the filing of tax evasion charges against Ang Galing Pinoy party-list Rep. Juan Miguel Arroyo and his wife Angela.

The order was based on the recommendation of a panel that the Department of Justice formed to handle the P73.85-million tax evasion complaint filed by the Bureau of Internal Revenue (BIR) against the couple.

In a 28-page resolution issued last September 16, the panel found probable cause to file tax evasion cases against the couple.

The panel was headed by Senior State Prosecutor Lagrimas Agaran. Its members were Assistant State Prosecutors Mederlyn Mangalindan and Ma. Cristina Barot.

In an affidavit submitted to the panel, the Arroyo couple denied the BIR's allegation.

The Arroyo couple claimed that the BIR made a mistake in computing the taxes they have paid in those four years.

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.

The BIR said that the lawmaker only paid 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,” BIR chief Kim Henares said during the filing of the complaint at the DOJ last April.

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.