Rep. Juan Miguel Arroyo, wife face P73.8M tax evasion suit
Rep. Juan Miguel Arroyo and Angela Arroyo. INQUIRER FILE PHOTO
The Department of Justice (DOJ) has decided to prosecute Ang Galing Pinoy Representative Juan Miguel “Mikey” Arroyo along with his wife for alleged failure to pay P73.85 million in income taxes during his mother’s presidency.
In a 28-page resolution, state prosecutors said that they had found “probable cause” to indict former President Gloria Macapagal-Arroyo’s eldest son and his wife Maria Angela for their failure to pay the taxes, including interests and surcharges, from 2003 to 2009.
The resolution of a three-member panel headed by Senior Assistant State Prosecutor Lagrimas Agaran was approved by Assistant Chief State Prosecutor Miguel Gudio and Prosecutor General Claro Arellano.
First criminal case
The release on Tuesday of the resolution dated September 16 could result in the first criminal case to be filed against Arroyos after President Benigno Aquino III vowed last week to go after them by 2012.
While the Arroyo couple may still seek reconsideration, Justice Secretary Leila de Lima on Tuesday said nothing could stop the DOJ from immediately filing the case with the Court of Tax Appeals.
“The filing of anything, whether motion for reconsideration or petition for review or any appeal, will not defer the filing of information with the proper court,” De Lima told reporters.
She said she had referred to her legal team the possibility of issuing a hold departure or watch list order against Arroyo and his wife, “whichever is appropriate at this stage.”
Arroyo said he was not surprised by department’s move, saying in a text message to the Philippine Daily Inquirer that it was part of “the President’s marching order against our family.”
Expected
“Coming from an administration that has always subjected us to persecution, we have expected it. This admin has not hidden its intent to put us behind bars and this is one of them,” he said, adding that it was “unfortunate” his wife had to be included.
“But we always believe in the rule of law and we will face the charges head-on because my conscience is clear. In the end I know we will be vindicated and justice will be served,” said Arroyo.
He said he had expected the DOJ to recommend the tax evasion case filed by the Bureau of Internal Revenue (BIR) against him and his wife on April 7 “despite the fact that we have sufficiently disputed the allegations.”
On Monday, the Commission on Elections announced a witness had linked the former president who is now a Pampanga representative to alleged rigging of the 2007 senatorial elections.
De Lima dismissed suggestions that the case against Representative Arroyo was meant to please the President. “I’m doing this because this is my job,” she said. “All I ask is respect for the mandate of the DOJ. We don’t need to be reminded because we understand what our handling prosecutors are doing.”
Three counts
The prosecutors indicted Arroyo for three counts of violation of Section 255 of the National Internal Revenue Code while his wife was charged with seven counts of failure to file income tax returns.
Arroyo was also charged with three counts of “failure to supply correct and accurate information” in his tax returns from 2004 to 2006.
State prosecutors also held that the tax investigators appropriately used the “Al Capone” system, or the net worth method, in determining the P73.85 million tax liability of the Arroyos.
Using the net worth method, BIR tax assessors sum up all the assets of the taxpayer and subtract all his or her liabilities to calculate the net worth.
“After deliberately going over the evidence on record, we are of the considered view that the net worth method of determining the tax deficiency was properly applied in the instance case,” the resolution said.
‘BIR erred’
The Arroyos claimed that the BIR erred in employing the net worth system “considering that the condition for its use are not present” and that its use “is not without limitations.”
Citing Section 3 of the Revenue Memorandum Circular No. 43-74, they said the BIR can only invoke the method only if the following conditions exist:
• If the taxpayer’s book do not clearly reflect his or her income;
• That there is evidence of a possible source or sources of income to account for increases in net worth;
• There is a fixed starting point or opening net worth, and;
• That the circumstances are such that the method does not reflect the taxpayer’s income with reasonable accuracy and certainty. With a report from Gil C. Cabacungan Jr.
Originally posted: 12:37 pm | Tuesday, October 4th, 2011
