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Philippines Tax Authority Seized Million Dollar Properties of Manny Pacquiao “Lien” to lease or sell; closing evading establishments

Manny Pacquiao Forbes House. Photo from Inquirer.net

 Arum blames BIR in tax mess

Philippine Internal Revenue authorities demanded that boxing great Emmanuel "Manny" D. Pacquiao pay a 2.2-billion tax bill or risk having assets seized, but the national hero vowed to take the fight to court.

The battle between one of the best boxers in history and the tax bureau has shocked his army of fans in the Philippines, emerging just days after a comeback win in the ring was hailed as a moment of hope amid the aftermath of a deadly typhoon.

Mr. Pacquiao disclosed  that the Bureau of Internal Revenue (BIR) wanted 2.2 billion for alleged unpaid taxes in 2008 and 2009, when he was at the peak of his career and one of the world's highest-earning athletes.

Mr. Pacquiao, 34, insisted he had paid his taxes in the United States, and so did not need to do so in the Philippines because the two countries have an agreement allowing their citizens to avoid double taxation.

But tax commissioner Kim S. Jacinto-Henares, who has spearheaded a high-profile campaign against tax evasion in the Philippines, stood firm yesterday, saying Mr. Pacquiao had failed for two years to provide documents proving his US payments.

"2.2 billion is what [Mr.]Pacquiao owes now because of surcharges and interest," Ms. Henares said on ABS-CBN television.

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Ms. Henares said the tax bill may be cut if Mr. Pacquiao did provide certified documents proving he paid the US Internal Revenue Service (IRS).

"What we want is evidence that he (Mr. Pacquiao) actually paid the tax."

But she said that even if he had paid the 30% tax rate in the United States, there would still be extra charges due in the Philippines because it had a higher rate of 32%.

The tax office has frozen his bank accounts in the Philippines, which Mr. Pacquiao said had left him financially paralyzed.

Ms. Henares said the tax office could eventually take the money owed by stripping him of his assets.

She said the tax office had already placed a "lien" on a Pacquiao property, worth millions of dollars, in one of Manila's most exclusive gated communities.

A lien is a form of security which allows the tax office to take back money it is owed, via lease payments or sale of the property.

NOT A THIEF

Mr. Pacquiao went on a publicity blitz on Tuesday night, appearing on all the major domestic television networks, to insist on his innocence and brand the tax office's actions "harassment."

"I am not a criminal or a thief. I am not hiding anything. I will face my problems as they come," Mr. Pacquiao said.

Mr. Pacquiao's American promoter Robert "Bob" Arum, chief executive of Top Rank Promotions, also released a statement saying his Top Rank firm had paid the 30% taxes directly to the US Internal Revenue Service, and certified paperwork to show proof would be available "very soon."

"Filipino authorities confirmed that [Mr. Pacquiao] is not required to pay double tax," Mr. Arum said in a statement.

"If [Mr. Pacquiao] paid US taxes for fights and endorsements that occurred on US soil, he is not required to pay double taxes in the Philippines," he added.

He added that Top Rank has deposit confirmations for each payment made and that the boxing agency has done the same for all US endorsements it has facilitated on Mr. Pacquiao's behalf.

Mr. Arum, in the same statement noted, however, that BIR officials wanted certified paperwork of those transactions from the IRS rather than bank deposit confirmations.

"Top Rank submitted copies of the EFT deposit acknowledgements to the BIR as proof of payment. The BIR has received the documents but directed [Mr. Pacquiao] to obtain 'certified' documents directly from the IRS itself," he said.

"Obtaining certified copies of documents from the IRS takes time. Manny made the formal request to the IRS and we have every expectation that the necessary documents will be furnished to the BIR very soon," Mr. Arum added.

But Mr. Pacquiao's Manila lawyer told AFP yesterday that he would not give the tax office those documents, preferring instead to fight the issue in court.

"This is no longer within the jurisdiction of the BIR," lawyer Tranquil Salvador said.

"The tax case is now with the Court of Tax Appeals. We do not have to submit anything to the BIR." A court hearing has been set for Dec. 5.

Mr. Pacquiao, a former street kid who did not finish high school, has used his sporting career to launch a successful political career -- he is a second-term congressman with publicly declared ambitions of eventually becoming president.

Mr. Pacquiao, a member of the main opposition alliance to President Benigno S. C. Aquino III, hinted the case against him may be political, calling for those involved to "forget about playing politics."

At his peak Mr. Pacquiao was regarded as the best pound-for-pound fighter in the world, becoming the only man to win world titles in eight weight divisions.

He lost two fights last year, leading some to predict his career was finished.

But a convincing win over American Brandon Rios in Macau on Sunday reignited his career, sparking talk once again of a long-awaited bout against Floyd Mayweather.

BIR orders 2 Pasig firms closed

Published in Business World Online, the Bureau of Internal Revenue (BIR) has ordered the closure of two establishments in Ortigas Center, Pasig City, after they allegedly underdeclared their income to cut back on taxes.

Events place JCM Exhibit Depot, located at Mega Plaza, ADB Avenue corner Garnet Road, as well as Baldo Construction and Development Corp., in PSEC West Tower, Exchange Road, were shuttered on Friday, the BIR said in a statement.

JCM Exhibit Depot is owned by event's organizer Carlo Naguit Martin. The BIR said the firm failed to file its income tax and value-added tax (VAT) returns for 2011, underdeclaring all of its earnings for that year, estimated at 57.068 million.

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Baldo Construction, headed by Christopher A. Baldo, is engaged in general contracting for roads and buildings, counting among its clients the San Miguel group of companies. It allegedly underdeclared its 2011 taxable sales by more than 40%, disclosing only 15.413 million.

"The closures were effected after the subject taxpayers failed to comply with the requirements specified in the 48-hour Notice and the 5-day VAT Compliance Notice..." the BIR said in the statement.

The tax bureau has been shutting down establishments that violate the National Internal Revenue Code under its Oplan Kandado program. It is the main revenue collection agency of the government, accounting for some 70% of revenues.

The BIR is mandated to collect a total of 1.253 trillion in revenues this year. As of October, it has netted P993.54 billion. – Business World Online / AFP with Imee Charlee C. Delavin

Philippines Bureau of Internal Revenue (BIR) Violates and Bypass the Supreme Court’s power to Freeze Pacqiao’s Bank Accounts

WHY ME? Professional boxer and Sarangani Rep Manny Pacquiao cries foul over a Court of Tax Appeal order to freeze his bank accounts. File photo by Rappler

Manny Pacquiao says bank accounts frozen over 2.2-B tax evasion case

Two days after his dramatic boxing comeback in Macau, Manny Pacquiao faced a more formidable opponent at home, after his bank accounts were reportedly frozen in relation to a P2.2-billion tax case.

Saying that even thieves are better treated by the government, the boxing champion said that he will have to borrow money to help Yolanda victims. Pacquiao is expected to visit Leyte this week.

"Inihabla po ako ng BIR (Bureau of Internal Revenue) ng 2.2-billion tax case na wala pong basehan," Pacquiao said in a press briefing Tuesday.

"Huwag po sana akong i-single out at personalin dahil hindi po ako magnanakaw," Pacquiao added, noting he "worked hard" to earn his assets.

After returning to the Philippines with his boxing career back on the upswing after a victory over American Brandon Rios on Sunday in Macau, Pacquiao was greeted with a news report that his assets were frozen.

On Tuesday, the Manila Bulletin newspaper reported that the Court of Tax Appeals' (CTA) First Division issued the order two weeks ago, but it only became known on Monday.

According to the Manila Bulletin, the tax case stemmed from the supposed failure of Pacquiao's accountant to report in his income tax returns (ITR) the multi-million-dollar taxes collected by the US Internal Revenue Service (IRS) from his prize winnings for the years 2008 to 2009, reportedly amounting to $28 million.

What freeze order?

But in a separate interview with GMA News Online on Tuesday, Margaret Guzman, CTA clerk of court, denied that the CTA First Division – which handles the boxing icon's tax case – issued such a freeze order.

Guzman said the tax court is indeed hearing a tax evasion case against Pacquiao filed by the BIR last August 1, but has not yet issued any order to freeze the boxer's bank accounts.

The case stems from a BIR assessment that alleged the Pacquiaos had incurred "deficiency income and value-added tax" from 2008 to 2009, worth P2.2 billion.

"It wasn't the court that froze the accounts of spouses Pacquiao, contrary to the news," Guzman said, adding that the news reports were probably referring to an order issued by the BIR to the banks.

"The BIR has the power to issue warrants of garnishment separate and distinct from a court order freezing accounts," Guzman said.

She said the Pacquiaos filed a motion last October 18 to lift the said "warrants of distraint and levy, and garnishment."

Guzman said the CTA is set to resume its proceedings for the tax case on December 5, during which it would hear the counter evidence to be presented by government against Pacquiao's motion to lift the warrant of garnishment.

The CTA First Division is chaired by presiding Justice Roman del Rosario.

Thieves get away

Pacquiao said he provided information on his income to the BIR, but the bureau ignored it.

"The BIR claims I earned more than what I actually did, without any evidence to back it up. They ignored information given by Top Rank and HBO and insisted I have earned more.

My lawyers have given them all the info that they want and they still refuse to believe. I really don't know why I am being singled out," Pacquiao said.

"Hindi naman ako tumatakas. Alam nila yung ginagawa nila," Pacquiao added, implying that he felt he was a victim of politicking.

Pacquiao commented on how those engaged in corruption in government get away with their sins, while he is being persecuted.

"Nagpabugbog ako, kumita ako, kinuha ng gobyerno. Pero pag nagnakaw ka [di naman nakakasuhan.] Wala pa akong nakitang nagnakaw ng marami, pero na-garnish lahat ng pera," he said.

The solon said he is mulling over the idea of asking for help from his compatriots in the House of Representatives to issue a resolution to dismiss his case.

Revenue officials noted that Pacquiao, a Filipino citizen and congressional representative of Sarangani province, is required to declare in his ITR all his earnings.

Pacquiao's lawyers countered that the boxer did not include remittances to IRS worth around $8.4 million in his income statement due to existing treaty between the Philippines and the United States that disallows double taxation, the report noted.

The boxer added that the BIR order was "arbitrary" and its assessment unreasonable as it is greater than the boxing champ's net worth.

But the BIR argued the tax debts have become "demandable... and collectible," as Pacquiao has been ignoring a final assessment notice sent to him.

"Kasama 'yung properties ko [sa garnishment]. 'Di natin magagalaw [ang mga ito]," Pacquiao said during the press briefing.

The boxer, who was preparing to visit the typhoon-devastated city of Tacloban, said he borrowed money for the relief operations.

"Umutang po ako ng pera upang makatulong sa mga nasalanta ng bagyo dahil ginarnish ng BIR ang aking bank accounts," Pacquiao said.

"Huwag po kayong mag-alala diyan sa Tacloban. Darating at darating ako kahit mangutang ako ulit. Naghahanda pa po kami," he added.

Not harassment

Malacañang, meanwhile, distanced itself from the issue.

"We are a government of laws not of men. The Internal Revenue Code provides for procedures on collection so this matter is best addressed by the Court of Tax Appeals," Presidential Communications Operations Office (PCOO) head Herminio Coloma Jr. said during a press conference on Tuesday.

"Harassment is not in our agenda... CTA's action is in accordance with Internal Revenue Code. Citizens may avail themselves of appropriate legal remedies," the Palace official added.

Pacquaio was the 36th top tax payer in 2012, paying a toal of 22 million in income tax, BIR data showed. He ranked 158th for paying P6.1 million in income taxes in 2011.

In 2008, Pacquiao paid over 125 million in income tax, making him the top taxpayer that year.

Pacquiao's tax payments declined to some 7 million in 2009 and 9.190 million in 2010, BIR data also showed.

– with reports from Rappler.com and by Mark Merueñas/ Patricia Denise Chiu/Kimberly Jane Tan/Siegfrid O. Alegado/VS/HS, GMA News

Philippine Internal Revenue Bureau frozen bank accounts of boxing hero Pacquiao for tax evasion case

Manny Pacquiao punches Brandon Rios in their welterweight boxing bout in Macau

Philippine boxing hero Pacquiao floored in tax fight 

Philippine boxing hero Manny Pacquiao said Tuesday authorities had frozen all his domestic bank accounts over allegations of unpaid taxes from lucrative fights in the United States, leaving him financially paralysed.

"This is harassment," the former eight-division world champion said in an interview on ABS-CBN television, as he disclosed for the first time a freeze order issued by the Philippines' Bureau of Internal Revenue in recent months.

The shock announcement came just two days after Pacquiao, 34, resurrected his boxing career with a unanimous point's decision over American Brandon Rios in Macau.

The victory, which Pacquiao dedicated to the victims of Super Typhoon Haiyan that claimed thousands of lives in the Philippines this month, added to his lustre among millions of ordinary Filipinos.

Pacquiao is now eyeing more lucrative fights in the United States. He is also pursuing a political career in the Philippines, where he is a second-term congressman with ambitions of eventually becoming president.

Pacquiao said the tax office took the action because it believed he had evaded paying 2.2 billion pesos ($50.2 million) in taxes on his fights in the United States in 2008 and 2009 when he was at the peak of his career and earning tens of millions of dollars.

He said he had already paid taxes on those earnings in the United States, which has a treaty with the Philippines that allows citizens of both countries to avoid double taxation.

However, he said the tax bureau had rejected the documents he provided to prove he had already paid the US Internal Revenue Service.

"I am not a criminal or a thief. I am not hiding anything. I will face my problems as they come," Pacquiao said.

"I have already paid my taxes in America. Had I not paid the correct taxes they (US authorities) would have come after me and I would not have been able to travel there."

Philippine taxman hits back

The Philippine tax bureau confirmed the local bank accounts of Pacquiao and his wife Jinkee had been frozen.

However tax commissioner Kim Henares denied any harassment, saying only two bank accounts containing a total of 1.1 million pesos were frozen.

"Don't tell me he only has 1.1 million pesos. Where is the rest of (his) money? I have no idea. It has not been garnished (seized)," she told AFP.

Only two domestic banks reported holding Pacquiao's accounts, Henares said.

She said Pacquiao had failed to submit the proper documents proving he paid taxes in the United States.

Tax officials gave Pacquiao two years to respond to their assessment but all he submitted was a letter from his US promoter Top Rank saying he had paid his taxes in the United States, according to Henares.

"This is a mere scrap of paper. Anyone can write that," she said.

Henares said she could not understand why the wealthy sports hero was bringing up the tax dispute now.

"Maybe he should hire better lawyers and accountants," she added.

The Pacquiaos have asked the Court of Tax Appeals to lift the bank freeze, but it has yet to rule on the couple's petition, according to court papers released to the media.

President Benigno Aquino's spokesman Herminio Coloma brushed off suggestions Pacquiao was being singled out for political harassment.

"We are a government of laws, not of men," Coloma told reporters.

The government has been running a campaign against high-profile tax evaders, targeting movie stars as well as businessmen who flaunt their wealth through flashy sports cars.

Pacquiao said most of his cash was kept in the Philippine bank accounts. He did not say how much had been garnished.

He said the freeze order had left him without money to pay his staff, and forced him to borrow "not less than one million pesos" to fulfil pledges to help victims of Super Typhoon Haiyan.

At his peak Pacquiao was regarded as the best pound-for-pound fighter in the world, becoming the only man to win world titles in eight weight divisions.

The former street kid who ran away from home to pursue a boxing career became one of the globe's wealthiest athletes.

But his career nosedived after suffering two losses last year, the second in a humiliating knockout to Mexican Juan Manuel Marquez that prompted questions over whether the ageing warrior should retire.

But even last year, Forbes magazine listed him as the 14th highest-paid athlete globally with an estimated $34 million in earnings.  AFP News

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