MANILA, Philippines — Lawyers of the Office of the Government Corporate Counsel (OGCC) may be held liable for tax evasion for non-payment of taxes for allowances that the Commission on Audit (COA) earlier flagged, a report to the Department of Justice (DOJ) has suggested.
In a 13-page memorandum last May 11, OGCC chief Rudolf Philip Jurado informed Justice Secretary Menardo Guevarra of the COA’s findings regarding excess allowances received by OGCC lawyers last year.
It was found that the OGCC lawyers received some of their allowances directly from client government-owned and controlled corporations (GOCCs), without deduction and payment of taxes.
“We just wish to note that the allowances remitted to OGCC were subjected to accounting and tax. On the other hand, direct payments to OGCC lawyers not only were unaccounted for and unmonitored but also not subjected to proper amount of taxes. It appears that OGCC lawyers never reported the directly paid allowances to the Bureau of Internal Revenue for tax purposes,” read the internal memorandum obtained by The STAR from the DOJ.
COA auditors, according to Jurado, revealed during an exit conference last April 10 that “the allowances directly paid to OGCC lawyers were not subjected to proper accounting and tax.”
They estimated that OGCC lawyers could have received over P25 million in allowances and honoraria from about 500 water districts in the country alone, apart from other GOCCs.
The COA questioned this system in its three-page report last March, which showed that 16 OGCC lawyers have been paid P4,539,893.39 in excess allowances from January last year to March this year.
Jurado followed the recommendation of COA and directed their lawyers to “refrain from collecting allowances directly from client (GOCCs) but instead remit the same to this office through the accounting section for monitoring purposes.”
But his deputies – Deputy Government Corporate Counsel (DGCC) Elpidio Vega and Assistant Government Corporate Counsels (AGCCs) Bel Derayunan, Ma. Dolores Rigonan, Dominador Isidoro Jr., Marilyn Estaris, Romelina Apostol, Efren Gonzales and Jose Marie Capili – did not comply with Jurado’s directive.
“They claim that it is premature to instruct the clients pending the recommendations of the COA. It should be noted that the directive of the (Chief Government Corporate Counsel) to the DGCC and the AGCCs/Team Leaders to instruct all client GOCCs to remit the allowances and honoraria to this Office, was made on (last March 16); hence, the DGCC and the AGCCs/Team Leaders have until (last March 26) to comply. Unfortunately, they did not do so,” read Jurado’s report to Guevarra.
Jurado said he then took the initiative and informed all client GOCCs to comply with the COA’s recommendations regarding allowances for OGCC lawyers.
The OGCC chief has also implemented further reforms and limited the allowances paid to OGCC lawyers to “additional or special tasks.”
The GCC defined the meaning of “additional and special tasks” for purposes of granting additional compensation to OGCC lawyers.
He ordered that when the tasks performed by OGCC lawyers are regular functions, there should not be any claim for allowance or additional compensation.
Despite these reforms he implemented at the OGCC, Jurado is reportedly being considered to be sacked by President Duterte from his post for still unclear reasons.
Jurado has persistently opposed the proposal of Solicitor General Jose Calida and the move in the House of Representatives to transfer the mandate of and funding for OGCC to the Office of the Solicitor General (OSG).
Both the OGCC and OSG are currently attached agencies of the DOJ.
The STAR reported earlier that the COA flagged the excess allowances received by OGCC lawyers. State auditors cited its circular which provides that allowances of government personnel should not exceed 50 percent of their annual basic salary.
“The amount of P2,373,195.63 was collected by OGCC lawyers in excess of 50 percent limitation based on the lawyers’ annual basic salary,” read the COA report dated last March 12.
The report showed that eight OGCC lawyers – including Vega, Isidoro and Rigonan – received a total of P7,095,039.63 in total allowances from GOCCs last year, but they should have received only about P4.7 million based on the 50-percent-of-salary threshold.
An updated report showed that 16 OGCC lawyers have been paid P4,539,893.39 in excess allowances as of March this year.
But the COA recently corrected its report, saying this amount included allowances received in prior years.
COA clarified that for last year, only five OGCC lawyers – Vega, Medardo Devera, Manuel Santos Jr., Efren Gonzales and Aniceto Calubaquid Jr. – received excess allowances totaling P621,717.73.