Former MWSS chief pleads not guilty to tax evasion charges

MANILA, Philippines - The former head of state-owned water regulatory agency Metropolitan Waterworks and Sewerage System (MWSS) pleaded not guilty to tax evasion at the Court of Tax Appeals (CTA) yesterday, the Bureau of Internal Revenue (BIR) said in a statement.

Former MWSS chairman Oscar Garcia was arraigned on four counts of tax evasion at the CTA’s second division.

Garcia earlier denied the tax charges filed by the BIR against him, concerning unpaid taxes on his earnings as MWSS board chairman.

He allegedly did not file his income tax returns from 2007 to 2009 and did not pay the correct tax due.

The BIR estimates Garcia’s tax liability at P6.31 million.

The BIR’s tax case against Garcia stemmed from the Senate finance committee’s investigation in 2010 on the compensation of executives in government-owned and controlled corporations (GOCCs).

The Commission on Audit (COA) has said that Garcia and other former members of the MWSS board turned the agency into a virtual milking cow, allegations that the former officials denied.

Investigations by the Senate in 2010 showed that GOCC executives, including former MWSS officials, earned from intelligence funds, per diems and even stock dividends.

The BIR said that in the case of MWSS executives, their compensation included car assistance, financial assistance and educational assistance programs as well as discretionary allowance.

The BIR filed the complaint affidavit on Garcia’s tax evasion case at the Department of Justice in December 2010, together with the complaints against other former MWSS executives Ferdinand Mahusay and Lorenzo Sulaik.

In December 2011, the CTA received the information from the Justice department.

Garcia’s lawyers filed motions to dismiss the case but this was denied by the CTA’s second division for lack of merit.

The warrant for his arrest was issued on Feb. 20, 2012 and the bail bond for his provisional liberty was set at P20,000.

Based on the Senate finance committee’s investigation, Garcia earned some P11.55 million from the regulatory agency from 2007 to 2009.