The highest income declared by Janet Lim-Napoles was P195,800 in 2004 but she made pricey purchases amounting to P4.17 milion.
Two years later, the alleged brains behind the P10-billion pork barrel scam declared no income but she paid P22.29 million for purchases.
Napoles’ husband, retired Marine Maj. Jaime Garcia Napoles, also made multimillion-peso purchases from 2004 to 2012 but he did not file any income tax returns (ITRs) until 2009 when he declared zero income.
Because of these discrepancies, the Bureau of Internal Revenue (BIR) sued Thursday the Napoles couple in the Department of Justice for tax evasion (a total of P61 million for taxable years 2004, 2006, 2008, 2009, 2010, 2011 and 2012), and for deliberate failure to supply correct and accurate information in their ITRs.
Napoles was charged with failing to supply correct and accurate information in her ITR for 2004, 2006, 2008 and 2009, and with willful failure to file her ITRs for 2010 to 2012.
Her husband was charged with not supplying correct and accurate information in his ITR for 2009 and with willful failure to file his ITRs for 2004, 2006, 2008, 2010, 2011 and 2012.
The BIR said the taxes paid by the couple were not commensurate with their assumed levels of income.
The bureau said it used the “expenditure method” of investigation based on the assumption that if an individual’s spending in a given period exceeded his or her reported income—and if the source of the funds is unexplained—the excess expenditures represented the unreported income.
First batch of cases
Internal Revenue Commissioner Kim Henares said her office was filing the first of several tax evasion cases against the couple as the BIR had yet to complete its investigation of properties listed in the names of their corporations, their children’s companies and people who were registered owners of the real estate assets.
At a news conference, Henares said the tax evasion cases filed Thursday were based on properties that were registered in the couple’s name.
“The amount is just what we have now. It can keep growing,” she told reporters, explaining why the amount was small compared with media reports that she owned up to 40 real estate properties and 30 motor vehicles.
Even if the investigation was not yet complete, Henares said the BIR was suing the Napoleses because the couple had committed tax evasion.
The couple are registered taxpayers with addresses at Suite 2502 Discovery Center on 25 ADB Avenue, Ortigas Center in Barangay (village) San Antonio, Pasig City; and San Isidro Street in Ayala Alabang Village, Muntinlupa City.
Napoles’ registration with the BIR was canceled in 2010.
The BIR found that Napoles had a total tax liability of P44.68 million, inclusive of surcharges and interests broken down into P3.49 million in 2004; P19.77 million in 2006, P3.18 million in 2008; P7.74 million in 2009; P3.93 million in 2010; P3.14 million in 2011; and P3.42 million in 2012.
The BIR based the liability on her purchases amounting to a total of P59.51 million in 2004, 2006, 2008, 2009, 2010, 2011 and 2012. There was no record of her purchases in 2005 and 2007.
Napoles declared in her ITR an income of P195,800 in 2004; P100,744.59 in 2008; and no income in 2006 and 2009. She did not file any ITR for the years 2010 to 2012.
The BIR said Napoles had declared in her ITR that she was the sole proprietor of Jo-Christine Trading, which she canceled in 2010.
As for her husband, he had a total income tax liability of P16.43 million, inclusive of surcharges and interests (P0.83 million in 2004; P4.78 million in 2006; P0.45 million in 2008; P6.33 million in 2009; P1.52 million in 2010; P0.77 million in 2011; and P1.75 million in 2012).
Napoles’ husband had total acquisitions of P23.88 million (from 2004 to 2012 except for 2005 and 2007) but he failed to file any ITR for these years except for 2009 when he declared nothing.
Based on reports
Henares said the BIR had tracked down the properties of the couple based on media reports.
From 2004 to 2012, the Napoles couple purchased and listed in their names various real properties, a number of motor vehicles, several insurance policies and club shares. They also invested millions of pesos in new corporations.
Their acquisitions included condominium units in City and Land Mega Plaza and the Discovery Center, parcels of lands in Pangasinan and Kidapawan City, insurance policies with Insular Life Assurance, Philippine American Life, General Insurance and Philippine Axa Life Insurance, and vehicles such as a Ford Lincoln Navigator, a Honda Civic and a Porsche Cayenne.
The filing of tax evasion cases came two months after Henares announced that her office had started to investigate Napoles if she paid taxes properly.
Napoles at the time was at the center of the pork barrel controversy, with former employees claiming that she had connived with lawmakers to pocket their pork barrel funds through the use of dubious nongovernment organizations.
Since then, the National Bureau of Investigation has filed plunder cases against Napoles, lawmakers and officials, including Senators Juan Ponce Enrile, Jinggoy Estrada and Ramon “Bong” Revilla Jr.
Henares said her office was dealing with foreign governments in pursuit of reports she had acquired properties abroad or had companies there.
Asked whether her office was investigating other alleged players in the scam, the BIR chief said she did not want to comment on what she said was confidential investigations.
“BIR can motu proprio [on its own initiative] investigate somebody when we get information that he has income that he did not report. I just leave it at that and let everyone come to their own conclusion,” Henares said.
Not political institution
“If there is a suspicion of undeclared income, we will investigate,” she added.
When the BIR conducts an investigation, it will be an objective one, Henares assured the public.
“The BIR is not a political institution. It’s an executive, implementing enforcement institution. So, we look at things based on evidence and file it based on what evidence tells us,” she said.—With a report from Michelle V. Remo