Pacman wins a round in tax fight, but...

MANILA, Philippines - Fresh from regaining the World Boxing Organization welterweight title, Sarangani Rep. Manny Pacquiao has won the first round of his tax battle with the Bureau of Internal Revenue (BIR).

The Court of Tax Appeals (CTA) on Tuesday stopped the BIR from garnishing his properties over his supposed P3.289-billion back taxes as it granted his motion to lift the warrants of distraint and levy and garnishment.

However, Pacquiao and his wife Jinkee were ordered to either deposit over P3 billion as cash bond or file a surety bond with the court. One of Pacquiao’s lawyers said they may ask for a reduction of the cash bond.

“We grant the instant urgent motion for the suspension of collection of taxes,” the 10-page ruling, a copy of which was obtained by The STAR, also stated.

“Respondent is hereby ordered to cease and desist from enforcing the subject Final Decision of Disputed Assessment (FDDA) and from collecting the subject deficiency tax assessments issued against petitioners for taxable years 2008 and 2009,” it said.

Presiding Justice Roman del Rosario signed the resolution, with the concurrence of Associate Justices Erlinda Uy and Cielito Mindaro-Grulla.

Cash bond

“The suspension of collection shall be subject to petitioner’s depositing of a cash bond in the amount of P3,298,514,894.35 or posting of a GSIS bond or a bond from other reputable surety company duly accredited by the Supreme Court, in the amount equivalent to one and one half of the amount being collected or P4,947,772,341.53,” the resolution stated.

“Failure to post the required cash or surety bond and submit the above-stated requirements within 10 days from receipt of the resolution will warrant the setting aside of the suspension of collection of taxes as herein granted,” it added.

Tranquil Salvador, one of Pacquiao’s lawyers, said his client is ready to comply with the court’s order.

“He still has options, which is to ask for the reduction of the bond, or secure a corporate surety, in this case, he only pays the premium of the amount just like in an insurance,” he said.

Pacquiao had sought the CTA’s intervention on the BIR’s move to collect his alleged back taxes, which ballooned to over P3 billion last year from the initial assessment of P2.229 billion in 2010.

Pacquiao’s lawyers said their client paid the appropriate taxes, showing documents from his promoter.

Records showed that Top Rank Inc. paid the petitioner a total of $12,948,439.00 for 2008 and $14.9 million for 2009, and the US government withheld $3,884,531.00 and $4,470,000, respectively.

Suspension of tax collection

The CTA said it could order the suspension of tax collection under Section 11 of Republic Act 1125, which created the Court of Tax Appeals if the interest of the government and/or the taxpayer would be jeopardized.

“This court may, in proper cases, issue the writ of injunction to restraint/distraint and levy ordered by internal revenue officials to collect taxes under dispute,” it said.

The court noted that the BIR is collecting a total of P3,298,514,894.35 – representing Pacquiao’s income and value-added taxes for taxable years 2008 to 2009, including surcharge and interests – as of Oct. 13, 2013.

The CTA said the amount “appears to be way beyond” the petitioners’ net worth, which was pegged at P1.186 billion as of July 1, 2013.

“On this score, coupled with the costs of the daily subsistence of petitioners and the members of their family, we find that the collection of the subject income tax from petitioners would jeopardize their interest,” the resolution said. “The suspension thereof while this case is pending is justified.”

The CTA set a pre-trial conference on June 6, and directed both parties to submit their respective pre-trial briefs at least five days earlier.

Military honor

Meanwhile, Pacquiao will be honored by military reservists next month for his impressive victory over American boxer Timothy Bradley last April 13.

Brig. Gen. Alexis Tamondong, chief of the Army Reserve Command, said a military merit medal would be awarded to Pacquiao in General Santos on May 4. The medal is awarded to soldiers who performed meritoriously in various administrative tasks not related to combat.

The awarding ceremony will coincide with the celebration of National Reservist Week.

“I will give him the award and then perhaps a plaque of appreciation from the command,” Tamondong said yesterday. – With Alexis Romero