Court orders billionaire Macario Gaw Jr. arrested for tax evasion
The Aquino administration’s campaign against big-time tax cheats has scored another major legal victory.
The Court of Tax Appeals (CTA) has ordered the arrest of billionaire businessman Macario Gaw Jr. who allegedly defrauded the government of some P5.5 billion for underdeclaring his income tax from 2007 to 2008, Justice Secretary Leila de Lima disclosed Monday.
The arrest order came after the CTA issued an arrest warrant against former military comptroller Jacinto Ligot and his wife Erlinda, also for tax evasion.
According to De Lima, the tax suit filed by the Bureau of Internal Revenue (BIR) against Gaw, owner of Mega Packaging Corp. and the taxi fleet MGE Transit Corp., is the biggest tax case the government has so far filed.
“I instructed the NPS (National Prosecution Service) to get a copy of the arrest warrant and give it to the NBI (National Bureau of Investigation) for implementation,” De Lima told the Inquirer in a text message.
In a statement, Revenue Commissioner Kim Henares said the CTA’s First Division issued on Oct. 19 the order which upheld an earlier resolution of the Department of Justice (DOJ).
2 counts of tax evasion
In its March resolution, the DOJ recommended the filing of two counts of tax evasion against Gaw, also the president of Macro Liquid Petroleum Gas Co. Inc.
Henares said Gaw violated Section 255 of the National Internal Revenue Code when he failed to file correct and accurate income taxes in the BIR.
“The court, after due deliberation, finds the existence of probable cause for the issuance of warrant of arrest against the accused in these consolidated criminal cases,” the court said in a resolution signed by Associate Justices Ernesto Acosta, Erlinda Uy and Esperanza Fabon-Victorino.
The court set Gaw’s bail at P120,000 for each of the two counts of tax evasion.
Henares said the tax court had initially granted Gaw’s petition seeking to suspend the court proceedings until Aug. 22 pending the resolution of the motion for reconsideration he filed with the DOJ.
But the court said it must observe the provisions of the Revised Rules on Criminal Procedure which limited the period of suspension to a maximum of 60 days for petitions for review pending in the DOJ and the Office of the President.
“Considering the lapse of the 60-day period given to the (DOJ) within which to resolve accused pending motion for reconsideration… the court shall now proceed to conduct its own independent evaluation and assessment of the existence of probable cause,” it said.
The CTA also clarified that it was not bound to adopt the resolution of the justice secretary since it was mandated to independently evaluate or assess the merits of the case. It said to do so “would be an abdication of this Court’s duty and jurisdiction to determine a prima facie case.”
From 2007 to 2008, the BIR said Gaw bought 10 properties with an aggregate amount of P4.11 billion and later sold them for P8.41 billion eight months later.
It was during this period when Gaw reportedly failed to declare his income.
Accusations denied
By “deliberately” declaring the sale of the properties as a sale of “capital assets” when these were actually sales of ordinary assets, the BIR said Gaw paid only a 6-percent capital gains tax amounting to P9.1 million in 2007 and P418.7 million in 2008.
The tax bureau said Gaw avoided paying the 32-percent income tax and 12-percent VAT due to sales of lands classified as ordinary assets.
Gaw vehemently denied the accusations.
In his counteraffidavit, he claimed that he had acquired the properties through a bank loan worth P4.75 billion and dismissed the allegation of the BIR that the money had come from his undeclared income.
To prove his argument, Gaw showed several bank documents. He said the parcels of land which he sold were capital assets for which he paid the correct capital gains tax.
He said he only used one taxpayer’s identification number in buying the properties.
But the DOJ found Gaw’s explanation unacceptable, noting that the subject properties with a total land area of 19.5 hectares had already ready buyers, “thus the sale was for business intended for profit.”
