SC orders Pacquiaos to answer BIR bid to collect P3.2B

MANILA, Philippines–The Supreme Court has ordered boxing champion Manny Paquiao to comment on a Bureau of Internal Revenue (BIR) motion seeking the lifting of a temporary restraining order on the agency’s efforts to collect P3.2 billion in taxes from him.

In a resolution issued last week, the Supreme Court’s Third Division gave Pacquiao and his wife, Jinkee, 10 days to answer the motion for reconsideration filed by the BIR contesting the court’s Aug. 18 order temporarily stopping the enforcement of a Court of Tax Appeals (CTA) order requiring them to post a P3.2-billion cash bond or a P4.9-billion surety bond in exchange for the lifting of the warrants of distraint and levy and of garnishment issued by the BIR in April on their properties.

The Pacquiaos went to the Supreme Court after the CTA rejected their plea to reduce the amount of the bond.

The BIR has been trying to collect taxes from the couple on the basis of alleged deficiencies in the income taxes and value-added taxes they paid in 2008 and 2009.

Pacquiao’s alleged tax liability was P2.2 billion. The required bond includes the accumulated surcharges and penalties.

The BIR also asked the Supreme Court to conduct a hearing on the agency’s motion for reconsideration.

In the petition for review they filed in the Supreme Court in August, the Pacquiaos accused the CTA of making “oppressive” assessments and described the bond as “astronomical.”

The couple claimed that the bond was no longer necessary since they were able to show during the CTA hearings that the BIR violated their right to due process and that the agency’s collection method was unlawful.

“Without such proof having been offered in evidence, the [CTA] should have dispensed with the bond requirement since the validity of the grand assessments [is] placed in doubt and the government’s right to collect the assessed taxes is uncertain to say the least,” the couple said.

The Pacquiaos sought a temporary restraining order from the Supreme Court because if the CTA revoked the lifting of the garnishment order due to the their inability to post the bond, the BIR would have proceeded to collect the tax liabilities by imposing a levy on their properties and bank accounts even while the CTA was still hearing the tax suit.

Pacquiao’s tax woes stemmed from his winnings and other earnings in the United States. The boxer claimed he paid the taxes in the United States.