Sandiganbayan acquits ex-DOF officials of tax credit scam on appeal

The Sandiganbayan on Dec. 2, 2008, convicted Plameras of graft for irregularities —PHILIPPINE DAILY INQUIRER

MANILA — The Sandiganbayan has reversed the conviction of five former Department of Finance officials earlier found guilty in one of the graft cases in connection with the multibillion-peso tax credit scam in the 1990s.

In a 23-page resolution dated Jan. 11, the court’s Special First Division granted the motions for reconsideration by the DoF officials and a garments exporter appealing their June 30 conviction.

The now-acquitted former DoF officials were: executive director Uldarico Andutan, Jr., garment division officer-in-charge Miriam Tasarra, and tax credit evaluators Lucila Cueto, Irene Magbojos, and Gladys Olaño.

Also acquitted was Kuldip Singh, the president of J.K. Apparel Manufacturing, Inc., and United Apparel Manufacturing, Inc.

Although some of the officials face conviction in other cases, they no longer have to pay the government P9.7 million in damages because of their acquittal in this specific case.

A  tax credit certificate entitles an exporter to tax refund as part of an incentives package for local firms. The scam, which lasted until 1998, saw companies submit fake documents to increase their tax claims.

In this specific case, the court originally said the prosecution was able to prove that the DoF officials granted P9.7 million in tax credit to Singh’s firms without valid basis.

It had cited that the supporting documents attached to the tax credit applications were mere photocopies, and the bank credit memos (stating the export sales) were spurious.

But now, the court said a 1993 order by then assistant secretary Antonio Belicena, who was also the administrator of the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center has rocked the initial ruling.

Office Order No. 93-13 stated that the original copies of the supporting documents may be returned to the claimants after the TCCs were issued.

This meant there were two possibilities: the original copies were actually returned to the claimants, or the OSS center really accepted mere photocopies as they were the only copies available there.

On this basis, the court had to return to the presumption of the defendants’ innocence, and the prosecution failed to overthrow it by proving the irregularity.

As for the allegedly spurious bank credit memos, the court earlier gave credence to the denial of Prudential Bank officer Renato de Villa, Jr., that the signatures there were his. At the time, it refused to admit a photocopy of a September 1998 certification that would have cast doubt on De Villa’s disavowal.

But, upon reevaluation, the court said the photocopy of De Villa’s certification should be accepted “in the exercise of logic, fairness, and prudence,” especially as Tasarra made reference to it.

The decision stated the certification puts De Villa’s denial—along with the prosecution’s assertion that there was no evidence of export sales—into question, because it confirmed that J.K. Apparel was really an exporter-client of Prudential Bank.  SFM