BIR sues 3 former Philcomsat executives

MANILA, Philippines—The Bureau of Internal Revenue (BIR) Thursday filed tax evasion charges against three former officials of Philcomsat Holdings Corp. (PHC), which stemmed from a 2006 Senate investigation of alleged questionable disbursements of corporate funds.

The charges were filed in the Department of Justice against former PHC chair and director Benito Ramon Araneta, and former directors Philip Brodett and Luis Lokin Jr.

Among the three respondents, it was Brodett who appeared to have allegedly earned income that an ordinary person could only dream of.

BIR Deputy Commissioner Estela Sales said at a press conference that the investigation of the three former PHC officials were based on the Senate inquiry in 2006, documents provided by informants and corporate records “showing that they earned this income.”

Philcomsat is a holdings corporation that used to control the rights to satellite transmissions during the Marcos years. It is now a telecommunications company that continues to be embroiled in a corporate dispute.

Brodett’s P625M

In 2007, the BIR discovered that Brodett earned P625.78 million, but failed to file his income tax returns.

The BIR said that from 2003 to 2007, Brodett accumulated a tax deficiency amounting to P526.61 million, inclusive of surcharges and interests.

The agency discovered that he earned P15.4 million in 2003, P43.5 million in 2004, P37 million in 2005 and P40 million in 2006.

For these earnings, Brodett only declared the following in his income tax returns: P946,000 in 2003, P1.1 million in 2004, P1.8 million in 2005 and P2.3 million in 2006.

Sales told the Inquirer that Brodett appeared to have the biggest income among the three PHC officers based on the documents the BIR had obtained.

Lokin’s deficiency

Lokin, a lawyer, has a tax deficiency of P12.4 million from 2003 to 2007, according to the BIR.

The BIR claimed that Lokin underdeclared his income from Philcomsat by reporting that he received P4.9 million in 2003, P2.1 million in 2004, P5.8 million in 2005, P2.5 million in 2006 and P7.7 million in 2007.

Lokin is also facing 36 counts for failure to file value-added tax returns for 2005, 2006 and 2007 from his work as a lawyer. The BIR said Lokin had P3.7 million in tax deficiency from his work.

As for Araneta, the BIR said he had failed to declare his exact salaries, allowances and fees, and director’s allowances and per diem from Philcomsat as well as other taxable income from different sources.

Underdeclaration

BIR investigators discovered that Araneta underdeclared his income by P15.05 million in 2003, P53.2 million in 2004 and P35.8 million in 2005.

They based the amounts on travel allowances, reimbursements and advances treated as “advances to affiliates” in the PHC books not accounted for by Araneta, and pretermination of money market placements and special savings account which Araneta had allegedly appropriated for himself.

Araneta has a total of P87.7 million in tax deficiency, broken down as follows: P13.7 million in 2003, P45.5 million in 2004 and P28.4 million in 2005.