SC lets ex-lawmaker turn witness in tax credit scam

The Supreme Court building in Manila. INQUIRER FILE PHOTO

MANILA, Philippines—The Supreme Court has paved the way for a former party-list representative to turn state’s evidence against former finance department officials charged in the Sandiganbayan with involvement in an P11-million tax credit scam more than 10 years ago.

The high tribunal’s Third Division reversed two rulings of the Sandiganbayan issued in 2008 that refused the Office of the Ombudsman’s bid to turn former 1-Utak party-list Rep. Homer Mercado into a state witness against Undersecretary Antonio Belicena, Deputy Director Uldarico Andutan Jr., Assistant Executive Director Raul de Vera and Rosanna Diala, formerly of the Department of Finance’s (DOF) One-Stop Shop Inter-Agency Tax Credit and Drawback Center.

The case arose from the issuance of two tax credit certificates in favor of JAM Liner Inc. which were found to be fraudulent by a task force created by President Joseph Estrada in 1999.

Mercado, who was then president of JAM Liner, came out in 2000 to testify against the syndicate that allegedly ran the credit scam at the DOF one-stop shop. He applied with the Department of Justice for immunity as a state witness under the government’s witness protection program.

The bus operator revealed that he obtained the certificates in 1997 through an intermediary who claimed to have close ties to the one-stop shop officials. He said the amount on the certificates was 20 percent more than what the company was supposed to get and that the intermediary told him the excess would be given to his connections in the one-stop shop.

The DOF officials were later accused of illegally approving and issuing two certificates in favor of Jam Liner: One was worth P7.35 million for domestic capital equipment and the other P4.41 million covering the purchase of six Mitsubishi buses.

The Office of the Ombudsman initially included Mercado in the charges of graft and falsification filed in the Sandiganbayan against the DOF officials. Mercado, in a motion, reminded the Ombudsman of the DOJ’s grant of immunity to him. In September 2003, the Ombudsman executed an immunity agreement with Mercado, who was required “to produce all relevant documents in his possession and testify against the accused in all the cases, criminal or otherwise, that may be filed against them.”