Former Congressman Pichay faces tax evasion rap at DoJ

TAX EVASION RAP VS PICHAY. Former Congressman Prospero Pichay faces tax evasion charges before the Department of Justice in a complaint filed by the Bureau of Internal Revenue. INQUIRER FILE PHOTO

MANILA, Philippines – The Bureau of Internal Revenue filed a tax evasion complaint against former Congressman Prospero Pichay before the Department of Justice Thursday.

In a news conference, Revenue Commissioner Kim Henares said Pichay, who was also recently dismissed as chairman of the Local Water Utilities Administration, did not file his income tax return in 2009.

Pichay “wilfully attempted to evade or defeat tax and deliberately failed to file a return and to pay tax for 2009,” the BIR said in its complaint.

Pichay was assessed with a total tax liability of P32.73 million.

Based on the documents submitted by LWUA, BIR said that Pichay was able to acquire real, personal and other properties in 2009.

Using the net worth method of tax investigation, it was able to determine that Pichay did not declare his income for taxable year 2009 after a comparison of the Statements of Assets, Liabilities and Net Worth (SALNs) he filed as a government employee in 2008 and 2009 and showed a substantial increase in net worth of P58.5 million.

The BIR said a breakdown of the increase in his net worth for 2009 showed property acquisitions including a residential lot in Las Piñas, a house in Marikina, motor vehicles and an airplane. Investigation also showed that he is in possession of large sums of cash.

“Despite receipt of substantial amounts of income as shown by his acquisition of numerous properties and possession of large amounts of case, Pichay failed to file any annual income tax return and to pay the corresponding taxes due thereon for taxable year 2009,” the BIR said.

Pichay is also facing criminal case before the Office of the Ombudsman and the DoJ and was recently dismissed from service after he was found guilty of grave misconduct.

Pichay has been slapped with a case for violation of Republic Act 6713 or the Code of Conduct and Ethical Standards for Public Officers and Employees and Grave misconduct for the unlawful disbursement of LWUA funds for the purchase of 60 percent outstanding capital stock of the Express Savings Bank, Inc. (ESBI).

Complainants said LWUA paid P80 million for the 60 percent shares of ESBI, whose main office is located in Cabuyao, Laguna.

The bank was undergoing rehabilitation from the Bangko Sentral ng Pilipinas at that time of LWUA’s purchase. The employees added that through LWUA board resolution no. 336, the government agency invested another P400 million to increase the bank’s authorized capital

The complaint stated that Pichay, who also heads the LWUA Board, ignored Administrative Order No. 59 which requires that all proposals to establish subsidiary corporations shall be submitted to the Monetary Board for review and approval by the Office of the President.

The complaint pointed out that Section 15 of the General Appropriations Act for 2009 which restricts the use of government funds as investments or deposit in private banking institutions was also violated.

With Marlon Ramos, Inquirer

Originally posted at 11:19 am | Thursday,  July 21, 200