The gag order issued by the Court of Tax Appeals cannot stop Congress from investigating the tax woes of boxing world champion and Rep. Emmanuel “Manny” Pacquiao of Sarangani province, House leaders said on Friday.
Reps. Romero Quimbo of Marikina and Elpidio Barzaga of Dasmariñas made the announcement a day after the tax court issued a gag order on Pacquiao, Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) and other parties involved in connection with Pacquiao’s P2.16 billion worth of allegedly unpaid income taxes from years 2008 to 2009.
Barzaga has filed House Resolution filed House Resolution 579 which tasks the House panels on Ways and Means and Games and Amusements to conduct an inquiry on the appropriateness of the warrant of garnishment issued by the BIR as a result of a tax collection case against Pacquiao.
“Yes, we can proceed with the probe. The House is an independent body. It is the [House] that determines if we should go on with the probe,” Quimbo, a lawyer, said in a text message to The Manila Times.
Barzaga, a certified public accountant cum lawyer, backed Quimbo’s stance by invoking that the House of Representatives is a constitutional body outside the jurisdiction of the tax court, and that the tax court cannot prevent it from exercising its duty to conduct probe in aid of legislation.
Barzaga cited at least two precedents: the House probe on the plea bargain agreement granted to former Armed Forces comptroller and Gen. Carlos Garcia who is charged with facilitating money laundering and indirect bribery and the Senate investigation on the P10 billion Priority Development Assistance Fund or Congressional discretionary fund scam allegedly masterminded by businesswoman Janet Napoles.
“Pacquiao and Henares, among others, cannot invoke the gag order here. As we have seen in past, the pending cases cannot prevent the House from exercising its power and duty. In fact, the House Committee can request the tax court to bring all the documents involving Pacquiao’s tax case,” Barzaga, Chairman of the House Committee on Games and Amusements, said in a separate interview with The Manila Times.
The BIR claims that Pacquiao has P2.16 billion worth of unpaid taxes as a result of Pacquaio’s income from his fights and commercial endorsements plus the penalties, surcharges and interests from 2008 to 2009. Of the P2.16 billion, P760 million are unpaid tax from 2008, while P1.4 billion are unpaid tax for 2009.
Further, the BIR cited that Pacquiao is liable to pay the aforesaid taxes since he did not present any tax returns which was filed in the US and thus, the agency do not have any basis for deducting the amount paid to the US to his taxable income in the Philippines since what was actually given to them was merely a certification by his promoter, Top Rank Promotions, which is a private entity.
Pacquiao, on the other hand, argued that his lawyers and accountants have already presented copies of the payments made to the Internal Revenue Service (IRS) of the United States since his boxing matches in those years were conducted within the tax jurisdiction of the US and not within the Philippines.
In addition, Pacquiao invoked that the United States and Philippines have an existing tax treaty in which tax payments made to the Internal Revenue Service of US will be credited by the Bureau of Internal Revenue.
“Due to conflicting claims of the parties, there is a need to verify the accuracy of statements of the parties involved and whether proper procedure in the BIR’s authority to issue distraint, levy and garnishment has been followed, particularly in connection with unreported income earned abroad by a professional boxer,” Barzaga said in his Resolution.
Pacquiao, the only boxer in history with eight world titles in eight different weight classes, successfully pulled off a comeback win with a masterful victory over Brandon Rios for the World Boxing Organization International Welterweight title last month.
“Representative Pacquiao’s numerous feats and accomplishments in and outside the boxing ring is definitely the pride and glory of every Filipino and his recent ring victory became the source of hope and respite especially in the aftermath of Typhoon Yolanda. Hence, it is essential that the tax issue with the Bureau of Internal Revenue be immediately resolved,” Barzaga added. LLANESCA T. PANTI