Former Sen. Manny Pacquiao (Photo from his Facebook page)
MANILA, Philippines—The Court of Tax Appeals (CTA) has refused to reverse its September 2022 ruling that canceled the supposed P2.229-billion deficiency tax of former senator and boxing legend Manny Pacquiao and his wife Jinkee.
In a resolution promulgated on Feb. 17, 2023, CTA dismissed the motion for reconsideration filed by the Bureau of Internal Revenue (BIR).
“Premises considered, the instant motion for reconsideration is hereby denied for lack of merit,” the CTA said.
The September 2022 ruling of the CTA’s Special Third Division said the assessment against the Pacquiaos is “void” for violating their right to due process and for “lack of sufficient factual basis.”
The Pacquiao couple went to the CTA questioning the BIR’s assessment and the order for them to pay the supposed tax deficiency.
The Pacquiao couple said the BIR proceeded with the collection process without a Final Decision on Disputed Assessment (FDDA).
An FDDA is needed to allow the taxpayer to question the final decision of the BIR.
BIR alleged that Pacquiao has a deficiency tax of P2.229-billion inclusive of interest and surcharges for his prize money in matches abroad and product endorsements for 2008 and 2009.
But the CTA, in its September ruling, said BIR failed to provide the Pacquiaos a notice of informal conference (NIC), a requirement under the law to allow the taxpayer to present his side.
The Tax Court added that BIR’s tax assessment basis was principally unsubstantiated news articles.
“A perusal of the records shows that there is no indication that the news articles were corroborated. Likewise, there is no showing that the revenue officers performed due diligence to confirm the veracity of the information contained in the said articles before issuing the subject assessment,” the CTA said.
It added that there is no evidence that the revenue officers performed due diligence in confirming the integrity of the information mentioned in the news articles.
“Thus, finding the subject assessment without sufficient basis, the same should be canceled and withdrawn,” it added.