Review of tax credit scam cases sought

A key witness in the government’s tax credit scam cases is hoping that the Ombudsman would review how these are being handled, after he himself was implicated in a similar controversy despite having an immunity agreement with the government.

But Ernesto Hiansen, who used to head the One-Stop Shop Tax Credit and Duty Drawback Center of the finance department, also said he remained firm in his commitment to help the government pin down the perpetrators of the scam and would continue to testify in tax credit scam cases if called to the stand.

Still, he said, it continued to pain him that he was implicated in a case in which he had acted as whistle-blower and had helped in unmasking the people behind the alleged misuse of tax credit certificates (TCCs).

TCCs are instruments showing how much tax credit a taxpayer is entitled to. These are refund payments that export companies are allowed to claim for duties paid on imported materials that they use in manufacturing their products. The TCCs could be used to pay for taxes or sold to other companies.

Hiansen was charged before the Sandiganbayan in July for alleged negligence, in violation of the antigraft law, for failing to verify the authenticity of tax credit certificates set for transfer. The TCCs were in the name of Rohm Electronics Philippines, Inc. and later sold to private corporations Nissan and Splash and used to settle tax obligations.

Others charged

Charged along with Hiansen were officials of the Bureau of Internal Revenue.

But on Hiansen’s motion, the Sandiganbayan Third Division in October decided to defer proceedings in the case while the Office of the Ombudsman is resolving the motion for reconsideration of the accused on the ruling ordering them charged with criminal cases.

In seeking the dismissal of his case, Hiansen had cited his immunity agreement with the Office of the Ombudsman as well as the lack of probable cause to hold him liable in challenging his indictment.

In an e-mail interview, Hiansen said he would like to appeal to Ombudsman Conchita Carpio Morales to conduct a legal audit of tax credit scam cases—those pending at the Sandiganbayan and undergoing preliminary investigation—and to make these a priority as well.

He said he was worried that some of these may be headed for failure.

“My view is that a review of the entire process of the handling (or mishandling) of the tax credit scam cases—both the civil and criminal aspects of the cases—would be beneficial to the new team at the Ombudsman as it would make an excellent case study on how not to lose a winning case,” he said.

Hiansen said he believed it would be better to focus on cases where the evidence of guilt is strong so as not to waste time and resources.

According to him, he had some concerns about the charges that the Office of the Ombudsman had filed. In one case, he said the evidence that was in the possession of his former office contradicted the findings of the Office of the Ombudsman that were used as the basis for bringing the charges to court.

Complications

He said that he had brought this up with prosecutors in private, “but no one seemed to take heed.”

“It is cases like these that complicate the prosecution of the real perpetrators because the courts are now clogged with cases that should not have been there in the first place. It also creates friction between myself and the prosecutors when in fact we should actually be working for the same agenda,” he said.

He was supposed to be the lead government witness in the main case against the Chingkoes—who are facing several criminal charges for the allegedly fraudulent use of TCCs—but he said this had been dismissed and that he was waiting for the appeal before the Supreme Court to be resolved.