BIR files P39-M tax evasion rap vs Tiu’s brother, sister-in-law

By: Jerome Aning - 10 years ago

Antonio Tiu (center). INQUIRER.net/Cathy Miranda

The Bureau of Internal Revenue (BIR) on Thursday filed in the Department of Justice (DOJ) a P39-million tax evasion case against the brother and sister in law of businessman Antonio Tiu, the alleged front in the acquisition of illegal wealth by Vice President Jejomar Binay when he was mayor of Makati City.

BIR Commissioner Kim Henares said spouses James and Ann Loraine Tiu, who were said to be substantial campaign contributors of Binay and his political party, were found to have committed “substantial underdeclaration of income.”

Henares said the couple was able to make expenses and investments without any “identifiable source” of income in 2010 and 2011. Their income for the two years combined, she added, was “considerably short” compared with their expenditures.

James Tiu, a registered taxpayer of Taguig City, was charged with willful attempt to evade or defeat tax, and deliberate failure to supply correct and accurate information in his income tax return (ITR) for 2010 and 2011. His wife Ann Loraine, a registered taxpayer of Caloocan City, was charged with willful attempt to evade or defeat tax, and deliberate failure to file her ITR from 2010 to 2012.

No comment

The couple’s lawyer, Cornelio Samaniego III, declined to comment on the case, saying they have yet to get a copy of the BIR complaint.

“We believe that James did not violate any laws and any independent and objective investigation will exonerate him,” Samaniego said in a statement.

The BIR said documents it obtained from the Commission on Election showed James made a total contribution of P7.5 million to Binay’s vice presidential campaign and P2.5 million to his party, PDP-Laban in the 2010 national elections.

BMW, stocks

In the same year, he made a downpayment for a BMW3351 Cabrio worth P5.85 million. He also sold shares of stock not traded in the local stock exchange worth P259,500 while incurring costs and other expenses worth P150,000 and paying corresponding capital gains taxes worth P9,511.

In his ITR for 2010, James declared total sales in the amount of P4.01 million and claimed expenses worth P3.65 million, paying P58,750 as income tax.

In 2011, the BIR said James contracted a loan with Philippine Business Bank worth P3.34 million and made an additional investment of P7.5 million in Greenenergy Holdings Inc.

In his 2011 ITR, he declared sales amounting P3.15 million, claimed cost of sales of P2.7 million, deducted expenses worth P125,000 and paid P42,500 income tax. He also paid P3.12 million as amortization for his bank loans.

Unreported income

Ann Loraine, on the other hand, contributed P7.5 million to the Binay campaign and P2.5 million to PDP-Laban in 2010. In the same year, she sold shares of stocks not traded in the local stock exchange worth P172,000 while incurring cost and other expenses amounting to P100,000 and paying P6,301.63 as capital gains tax.

In 2011, she paid Greenenergy P7.5 million as additional investment and another P21.5 million in 2012. She allegedly did not file her ITR for 2010, 2011 and 2012.

Using the expenditure method, the investigators determined that James owed the government P14.96 million in taxes while Ann Loraine owed P24.07 million.

According to the BIR website, “proceeds on the theory that were the amount of money which a taxpayer spends during a given year exceeds his reported income, and the source of such money is otherwise unexplained, it may be inferred that such expenditures represent unreported income.”

Antonio Tiu has told the Senate blue ribbon subcommittee that he is the owner of a supposed 350-hectare farm in Rosario, Batangas. But Senators Antonio Trillanes IV and Alan Peter Cayetano have asserted that Binay owned the farm and that Tiu was his dummy in the acquisition of the so-called “Hacienda Binay.”

Contempt

Sen. Aquilino Pimentel III, chair of the subcommittee, yesterday said he would recommend that James and Ann Lorraine Tiu be cited in contempt by the Senate for snubbing a hearing of his Senate panel into alleged irregularities in Makati.

Pimentel said the lawyer of the Tiu couple had told the subcommittee during one hearing that the couple were abroad but would attend the next one. The lawyer said there was no need for a subpoena, but the subcommittee still decided to issue such summons.

‘Must be disciplined’

“We sent them subpoenas and they did not attend. So they must be disciplined,” he said.

He would recommend to the blue ribbon committee that James and Ann Loraine be cited in contempt. Only the mother committee, and not Pimentel’s subcommittee, has the power to cite resource persons in contempt.

Pimentel would also order the issuance of another subpoena requiring the Tiu couple to appear before the subcommittee.