Pacman no match for taxman | Inquirer News

Pacman no match for taxman

/ 01:51 PM November 28, 2013

It has often been said that in life, nothing is certain except death and taxes.

For world boxing champion Manny Pacquiao, who is being chased, some say harassed, by the Bureau of Internal Revenue (BIR) for allegedly failing to pay his income taxes, the bureau’s issuance of a warrant of garnishment which prompted the Court of Tax Appeals to freeze his multiple bank accounts could not have come at a more difficult time.


Pacman has pledged to help 10,000 families displaced by supertyphoon Yolanda (international name, Haiyan). The payroll for his 1,000 employees needs to be met on time. Because he maintains a lifestyle befitting one of the wealthiest sportsmen on the planet and the richest Philippine congressman (total net worth is P1.7 billion based on his 2012 statement of assets and liabilities), the BIR action sends a death-like chill that beating Brandon Rios in Macau last week would seem like child’s play.

His feisty mother Dionisia put it very well when she said, “Gitumba sa akong anak ang iyang mga kontra ibabaw sa ring apan kining hitaboa, morag lisod (My son felled his opponents in the ring, but the tax issue will be rough).” With these words, Nanay Dionisia has presented a sharp analysis of the situation: her son is very vulnerable in the battle against the BIR.


Pacman’s tax woes stem from his alleged failure to pay taxes amounting to P2.2 billion from prize monies of his boxing matches against Ricky Hatton and Oscar de la Hoya, wherein the Filipino boxing virtuoso earned some US $27.8 million or roughly P1.2 billion in 2008 and 2009.

The BIR is also examining his financial statements after paying only a measly P7 million in taxes in 2010. The sudden drop has caught the eye of tax auditors because he paid over P125 million in taxes in the previous year.

For the top-billed fights in Las Vegas, the United States Internal Revenue Service IRS reportedly assessed Pacquiao a whopping $8.4 million or roughly P395 million in taxes. He said he has paid them all, and I think anybody familiar with the US system will not doubt his claim.

A tax treaty between the US and the Philippines prohibits double taxation so if Pacquiao has already paid his dues to Uncle Sam, what more does the BIR want?

According to Commissioner Kim Henares, the agency has been asking Pacman for two years now to submit proper IRS documentation but he came up only with a certification from Top Rank Promotions. Top Rank is the Las Vegas-based boxing promotions company which also handles Pacman’s professional boxing career. Henares is not impressed by the certification signed by Top Rank CEO and founder Bob Arum.

It’s difficult to believe that with all his resources, Pacman is unable to secure the proper IRS document unless it does not exist. But in the US, the IRS is a feared agency. Complaining citizens even call it an evil organization because it “bullies, intimidates, threatens and penalizes” Americans into paying “more than 50 percent of taxable income.” Out there, one can cheat death but not the IRS.

That is why the idea of Pacman presenting a bogus document to dodge tax assessment in the Philippines does not wash. Skeptics will even say IRS agents were already knocking on Pacman’s Las Vegas suite even before he could claim his prize money.


Is politics behind Pacman’s tax problems?

Congressman Manny Pacquiao of Sarangani is a member of Lakas-Christian Muslim Democrats, the party of former president Gloria Arroyo. I don’t know if Pacman is ruing the day he entered politics because many were against his decision to join the game of the devil early on.

Maybe now the boxing champ has a better understanding of Pinoy politics, but what I don’t understand is why he continues to remain with the discredited party when he can choose to be an independent, that is if he is really averse to join the ruling party.

Malacañang vehemently denies it is out to destroy Pacman for political reasons but even Aquino allies find it difficult to justify the decision of the BIR even assuming it exercised fair play.

In the first place, Pacquiao has been paying hundreds of millions in taxes since he hit the big time. If there are deficiencies in payments, the agency should be able to find a middle ground to correct the mistakes without going into a costly battle outside of the tax court.

Pacquiao is a positive force who could even help the government restore the trust and goodwill of the people. Administration officials need only to recall last week’s TV footages of Filipinos across the country especially in typhoon-ravaged areas, cheering Pacquiao all the way to his victory against American boxer Brandon Rios.

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TAGS: Bureau of Internal Revenue (BIR), Manny Pacquiao, opinion, Tax
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