Pacquiao brings tax woes to SC

-A A +A

Friday, August 15, 2014

MANILA -- Boxing superstar Manny Pacquiao and his wife Jinkee have turned to the Supreme Court (SC) to stop the Court of Tax Appeals (CTA) from enforcing an order for them to post multi-billion peso bond while their tax assessment case is ongoing.

The Pacquiaos asked the SC on July 24 to issue a temporary restraining order (TRO) on the CTA First Division’s July 11 resolution denying their motion for partial reconsideration, which called on the tax court to reduce the bond and extend the deadline for posting the bond.

The couple has until August 17 to post a cash bond worth P3,298, 514,894.35 or a surety bond in the amount of P4,947,772,341.53.

Otherwise, the CTA will set aside its April 22 resolution, which ordered the suspension of collection of the Pacquiaos’ alleged tax liabilities worth P3.29 billion.

If that happens, the Bureau of Internal Revenue (BIR) can seize all of the couple's properties for the purpose of liquidating them and applying them toward the settlement of their alleged tax liabilities.

The Pacquiaos admitted they could not afford the bond given that their net worth is only P1,185,984,697 as of July 1, 2013.

"In this case, the imposition of bond requirement by respondent CTA to secure amounts beyond the capability of the petitioners loses sight of the purpose of the order suspending collection of taxes, which is to protect the interest of both the government and the taxpayer during the pendency of the proceedings for the main case," the petition read.

The Sarangani lawmaker and his wife will be left with nothing to cover their daily sustenance and that of their children and payment for litigation costs, not to mention damage to their reputations, the petition added.

The couple also claimed that Pacquiao’s boxing career will be “adversely affected” even as he is set to battle unbeaten Chris Algieri on November 23 in Macau to defend his World Boxing Organization (WBO) welterweight title.

“Manny Pacquiao’s boxing career will be adversely affected. Already this tax case has become one of the reasons his main boxing rival Floyd Mayweather Jr. refuses to fight him, thus depriving him the opportunity to make boxing history and prove he is the best boxer of this generation,” the petition said.

"We humbly plead this Honorable Court not to allow the oppression and destruction of Manny Pacquiao who is the embodiment of the resilient Filipino spirit,” it added.

The petition hit the tax court in presuming the correctness of the BIR’s tax fraud assessment without hard proof and for requiring the Pacquiaos to post a bond even if the tax collection processes employed by the BIR allegedly violated the law.

It also saw the bond requirement as a hindrance to seeking justice from the “arbitrary and bloated assessments” issued by the tax bureau.

“Regardless of whether petitioner is able to comply with the requirement to deposit a cash bond or post a surety bond in this case, petitioners will obviously have no money or other assets to finance litigation of this case,” the Pacquiaos said.

Pacquiao believed the government should no longer run after him, citing documents from the United States Internal Revenue Service (IRS) that he paid $8.35 million in taxes from his fight purses in 2008 and 2009.

The government is open to a compromise agreement with Pacquiao but BIR Commissioner Kim Henares said the boxer should make the first move since he is the one seeking for a tax credit. The Philippines and the US have a treaty against double taxation.

Pacquiao’s original tax liability was P2.26 billion but it ballooned to P3.29 billion due to surcharges and penalties.

The BIR then issued a warrant of distraint and levy against his bank accounts, which the eight-division champion challenged before the CTA.

The tax court, however, directed the Pacquiao couple to deposit a cash or surety bond to stop the BIR from collecting back taxes. (Sunnex)

DISCLAIMER: Sun.Star website welcomes friendly debate, but comments posted on this site do not necessary reflect the views of the Sun.Star management and its affiliates. Sun.Star reserves the right to delete, reproduce or modify comments posted here without notice. Posts that are inappropriate will automatically be deleted.

Forum rules: Do not use obscenity. Some words have been banned. Stick to the topic. Do not veer away from the discussion. Be coherent and respectful. Do not shout or use CAPITAL LETTERS!