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Tax evasion charges filed vs Mikey Arroyo, wife

Posted on April 08, 2011

THE SON and daughter-in-law of former president Gloria Macapagal-Arroyo, along with a popular Brazilian celebrity, have joined the ranks of alleged tax cheats the government wants to prosecute.

Party-List Rep. Juan Miguel "Mikey" M. Arroyo and his wife, Ma. Angela M. Arroyo, allegedly failed to pay taxes totalling P73.85 million.

Ang Galing Pinoy party list Rep. Juan Miguel "Mikey" M. Arroyo and his wife, Ma. Angela M. Arroyo, failed to file their income tax returns (ITRs) and pay taxes totaling P73.85 million, the Bureau of Internal Revenue (BIR) claimed in filing the complaint at the Justice department.

Brazilian model, actress and TV host Daiana A. Menezes, meanwhile, was also charged by the BIR for reportedly failing to file income taxes amounting to P983,658.07.

The cases against the three constituted the 37th and 38th cases filed under the tax bureau’s Run After Tax Evaders (RATE) program.

Mr. Arroyo called the charges rushed and politically motivated as President Benigno S. C. Aquino III had pledged to investigate Mrs. Arroyo, who now occupies the Pampanga congressional seat vacated by her son.

BIR Commissioner Kim Jacinto-Henares denied this, saying: "We file cases because of evidence. It’s not because of any personality".

Finance Secretary Cesar V. Purisima, in a statement, said: "The cases that we filed today are testaments to the Aquino administration’s continued drive against tax cheats who think that they are above the law ... [the] government is determined to send to jail all tax evaders and smugglers that rob the Filipino people of their much needed government revenues."

The BIR said Mr. and Mrs. Arroyo had failed to pay the proper taxes for several real estate and personal property acquisitions from 2004 to 2009.

It claimed Mr. Arroyo did not file ITRs in 2005, 2008 and 2009, while Mrs. Arroyo also failed to do so from 2003 to 2009.

Mr. Arroyo was also accused of "substantially" underdeclaring his taxable income by more than 30% compared to his net worth during the years that he had filed tax returns.

Ms. Henares claimed he had declared a net income of only P2.4 million for 2004, P1.7 million for 2006 and P376,000 for 2007.

"[The underdeclaration of income] is [based on] the submitted SALN (statement of assets, liabilities and net worth) alone. As we go along, it can grow because there’s an allegation that there are assets that were not included. ...If more assets will be recovered, [the tax liabilities] will keep on growing," Ms. Henares said.

Mr. Aquino, however, said he had paid the right taxes and accuses the Aquino administration of political gimmickry.

"I received a notice of audit from the BIR two days ago and they gave me 10 days to submit some documents ... I was more than willing to send my lawyer to their office to answer all their queries. But surprisingly, they filed the case against me and my wife [already]," Mr. Arroyo said in a statement provided reporters.

"My conscience is clear. I have done nothing wrong. Now that the case is already in court and the rules of evidence will finally govern this issue, I am confident I will be vindicated," he said.

The Arroyos face imprisonment of up to four years and a fine of P100,000. The failure to file ITRs could also earn them a fine not less than P10,000 and imprisonment of up to 10 years, Ms. Henares said.

The BIR chief also rejected claims by the Arroyo couple that the questioned properties were either donated or inherited.

Ms. Menezes, meanwhile, was said to have evaded paying taxes on income of P2.66 million from 2007 to 2009. While she had registered with the BIR to secure a taxpayer identification number, she listed her tax type as "not taxable," which the BIR charged showed a willfulness to evade payment of taxes.

Ms. Menezes was not immediately available for comment.

As this developed, Justice Secretary Leila M. De Lima also announced yesterday that her department had resolved its first RATE case, against Macario L. Gaw, Jr. who had been accused of evading taxes from 2007 to 2008.

Mr. Gaw allegedly underdeclared his income because he was able to purchase six parcels of land in 2007 worth P1.96 billion despite having disposable cash of just P66.06 million.

He also reportedly acquired four more parcels of land the following year worth P2.16 billion with a gross income of only P309,649.81.

The Justice department ruled that Mr. Gaw was able to show evidence that he had taken out loans to purchase the properties, but also said he had not paid the required income and value-added taxes when he sold the land.

"There is therefore basis in BIR’s contention that ... [Mr. Gaw] should have declared income of P4.12 billion from [the sale of land] and paid the correct amount equivalent to 32% income tax and 12% VAT," the department said. -- Diane Claire J. Jiao