Pacquiao tax break junked Palace nixes
THE Palace on Friday rejected two bills seeking to exempt boxing champion and Sarangani Rep. Manny Pacquiao from paying taxes.
“Paying taxes is one of the basic obligations of every Filipino citizen. That is why in our view, that proposal is not reasonable,” said Communications Secretary Herminio Coloma.
“Exemptions are based on the capacity of workers to pay tax. Usual exemptions include those that are extended to minimum wage earners. Those are the only types of exemptions that we have,” Coloma added.
Independent lawmakers led by Buhay party-list Rep. Lito Atienza have filed a measure that would stop the government from taxing Pacquiao’s winnings as well as those of other national athletes who win prizes and awards in international competitions.
The exemption would apply to prizes and awards in all competitions earned 10 years prior to the effectivity of the proposed law.
Valenzuela Rep. Magtanggol Gunigundo also filed a bill granting tax exemption to Pacquiao for as long as he lives for the honor and pride he has brought to the country.
Earlier, President Benigno Aquino III said it was illogical to suggest that the government is harassing Pacquiao, who the Bureau of Internal Revenue (BIR) says owes P2.2 billion in back taxes.
Aquino chided the boxing champion for engaging the BIR in a media war, and said he should just present evidence that he has complied with all the tax requirements.
“Why should we harass him? Where is the logic in that?” he said. “I understand the frozen accounts total P1.1 million. What is that compared to all of his winnings? With all due to respect to Congressman Pacquiao, if he believes that he has complied with all the necessary rules and all the necessary laws, then I’m sure he has all the evidence to (back up his claim),” the President added.
Aquino even described Pacquiao as being “cavalier” in not responding to the legitimate summons of the BIR.
“He earns abroad, he pays taxes there, but the tax rate in the US and ours are different. That difference still has to be made up,” the President said.
Aquino said Pacquiao’s media interviews will not help him resolve the tax case.
“The way to settle it is to answer all of these queries by the BIR and not to engage in a media war. The media will not decide who is right or wrong. It will be our courts eventually, if it gets to that, who will decide,” Aquino added.
The tax case arose from the alleged failure of Pacquiao’s accountant to report in his income tax returns the taxes collected by the US Internal Revenue Service from his prize winnings for the years 2008 to 2009.
BIR lawyers said Pacquiao’s failure to answer the final assessment notice sent to him has made his tax debts “demandable, executory, and collectible.”
BIR records showed that the boxing champ earned more than $28 million in prize money in 2008 and 2009.
Of the amount, the US IRS collected $8.4 million or roughly about P395 million.
Pacquiao said he did not include the remittances to the IRS in his income tax return because of an existing tax treaty agreement between Manila and Washington which stipulates that income tax paid by Filipinos in the US is creditable against his income tax liabilities in the Philippines.
The Court of Tax Appeals this week imposed a gag order on Pacquiao, his immediate family and representatives and the BIR to stop them from discussing the case while it is being heard.
In the House, Speaker Feliciano Belmonte Jr. dismissed Guinigundo’s bill.
“I do not support giving permanent tax exemption to anybody, particularly those who do not even need it,” Belmonte said.
Pacquiao is already the richest among the 292 members of the House of Representatives, with a net worth of P1.35 billion based on the 2011 Statement of Assets Liabilities and Net Worth that he filed.
Basilan Rep. Jim Hataman-Salliman, AKO-Bicol party-list Rodel Batocabe, Isabela Rep. Rodolfo Albano III, Gabriela party-list Rep. Luz Ilagan and Kabataan party-list Rep. Terry Ridon agreed with Belmonte.
“He is earning more than what he needs, and there are people who have less in life that deserve to be given that privilege,” Hataman-Salliman said.
He said the country can honor Pacquiao “in a different way” that does not deprive the government and the people of their revenue.
Batocabe said he was inclined to support Atienza’s bill instead because it covers not only Pacquiao but other athletes as well.
Isabela Rep. Rodolfo Albano III, member of the House opposition bloc, also opposed Gunigundo’s proposal.
“That’s crazy!,” Albano said of Gunigundo’s bill. “Why not make him a king, perhaps it’s better.” With Maricel V. Cruz