Why is Henares not pursuing a tax evasion case vs. donut seller?

Emeterio Sd. Perez

Emeterio Sd. Perez

IT is good to hear from lawyer Perfecto R. Yasay Jr., former chairman of the Securities and Exchange Commission, that he and Edgardo de Leon are elevating their suit against Philippine Long Distance Telephone Co. to the Supreme Court, after they lost the case at the Court of Appeals which dismissed it for being a “nuisance or harassment suit.”

Apparently, the appellate court failed to appreciate the case questioning, among others, the reclassification of PLDT’s capital stock to accommodate the issuance of 150 million voting preferred shares that enabled the telecommunication company to comply with the constitutionally required 60-percent to 40-percent ownership ratio in favor of Filipinos for public utility companies.

A High Tribunal’s final ruling should resolve the issue on the issuance of voting preferred shares as a “last resort” for partially nationalized industries to abide by—or is it circumventing?—ownership restrictions.

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Due Diligencer has to take up the cudgel for Othello Dalanon, the former tax examiner of the Bureau of Internal Revenue (BIR) who preferred losing his job than to continue serving under Kim Henares, the Aquino administration’s chief tax collector who is very selective in going after tax evaders. Since Dalanon’s story came out earlier in this corner, allow this writer to discuss the issue at greater length. Hopefully, this would be the last on the subject.

Instead of collecting the tax deficiency of Golden Donuts Inc. amounting to P1.51 billion for 2007, Henares recently told GMA 7 in a newscast that she had the company’s financial filings re-audited. She was giving her side after the station interviewed Dalanon, who resigned as a senior tax examiner of the BIR over the issue of GDI’s unpaid taxes. Dalanon happened to have been assigned to review GDI’s tax filings and discovered the company’s unpaid tax liabilities for 2007.

As far as Due Diligencer is concerned, Henares was entirely wrong and may have set a precedent when, instead of waiting for GDI to question Dalanon’s findings before the Court of Tax Appeals, she assigned new examiners to re-audit the company. As expected, the result of the second audit, apparently ordered by Henares, showed GDI still had tax deficiency but probably not as much as P1.51 billion. Henares, however, did not disclose the new findings. Instead of dealing with the issue, she accused Dalanon of premature disclosure of his audit of a taxpayer for which, she said, he could possibly be held criminally liable.

There are two issues here: the re-audit of GDI’s tax filings and her allegation of Dalanon’s premature disclosure of his findings against GDI.

As BIR commissioner, Henares can claim she has the power to review a tax examiner’s audit findings. But should she exercise this power selectively? In the case of Manny Pacquiao, the Filipino boxing champion who she alleged owed BIR over P2 billion, she followed the proper procedure by going to the Court of Tax Appeals.

With her selective “re-audit” policy, Henares should answer the following questions: Why did she not order a review Pacquiao’s tax liability? Who knows the new examiner or examiners might find it justifiable to reduce the boxer’s tax deficiency by concluding that the first examiners were wrong in their computations? After all, mathematics may be an exact science but never to Henares.

How about the gold trader that deals with the Bangko Sentral ng Pilipinas whom Henares alleged owed the BIR more than P2 billion? Why should the BIR deprive him of a second audit if only to clear his name? After all, he has been dealing with government. Finally, what does the donut seller have that Pacquiao and the gold trader do not have?

When Henares talked to GMA 7 about Dalanon’s premature disclosure of his findings, which to her were highly confidential, she again showed there are two rules that she imposes: one for her and another for tax examiners not afraid of the truth. If Dalanon is guilty of what he has been accused of by Henares, then the Aquino administration’s chief tax collector should review the news and press releases in which she cited the details of a taxpayer’s tax liabilities, thereby embarrassing said taxpayer.

If Dalanon is guilty as she has charged him over a GMA 7 newscast, who will accuse Henares of being administratively, if not criminally, liable for announcing through the media BIR’s assessments “against” taxpayers?



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  1. Hector David on


    Ipakita sa taong-bayan ang detalye ng assessment ni Othello Dalanon at ng mga “tax experts” ng BIR na tulad ni Kim, na inatasan niyang nag re-audit ng dalawang beses, upang makita ng tunay na mga tax experts na hindi taga-BIR ng sa gayun ay malaman ang buong katotohanan kung alin nga ba ang tama o mali.

  2. Hector David on

    Eto ang proceso bago maaprub at maisyu ang notice of assessment na pinadadala sa taxpayer. Ang audit report ng examiner ay dadaan sa mga mata at brains ng mga “tax experts” ng BIR sa district at regional levels for review, evaluation, and approval. Sa district level, dadaan ang audit report ng examiner sa mga sumusunod: supervisor ng examiner, head ng assessment section ng district office, assistant revenue district officer, at revenue district officer. At sa regional level naman, dadaan ang audit report ng examiner sa mga sumusunod: reviewer, supervisor ng reviewer, assistant chief ng assessment division, at chief ng assessment division. At pagkatapus sa assessment division, dadaan pa ito sa Assistant Regional Director then to the Regional Director for final approval.

    Ang sabi ni Kim Henares ay “mali” daw ang assessment ni Othello Dalanon. Bakit naaprubahan ito ng Regional Director? So, kung “mali” ang assessment ni Dalanon ay dapat ding sisihin ang mga “tax experts” ng BIR sa district at regional levels na nagconcur sa sinasabi ni Kim Henares na “maling” assessment ni Mr. Othello. Di kaya dapat na tanggalin yong mga “tax experts” na yon, na tulad ni Kim, sa pag concur sa “maling” assessment, kung totoong “mali” nga ang assessment ni Dalanon?

  3. You are right in what you are saying. But i see it in everything in this country, there isnt a single thing that seems to work. What is wrong with this country, its a total shambles & it seems its run by incompetent people. It needs a huge overhaul from top to bottom & for people to be held accountable.

  4. Claro Apolinar on

    Very good, Mr. Emeterio Perez.
    Is the donut company a crony-capitalist firm whose owners are donors to the Liberal Party?