Philippines Tax Authority Seized Million Dollar Properties of Manny Pacquiao “Lien” to lease or sell; closing evading establishments

Manny Pacquiao Forbes House. Photo from

 Arum blames BIR in tax mess

Philippine Internal Revenue authorities demanded that boxing great Emmanuel "Manny" D. Pacquiao pay a 2.2-billion tax bill or risk having assets seized, but the national hero vowed to take the fight to court.

The battle between one of the best boxers in history and the tax bureau has shocked his army of fans in the Philippines, emerging just days after a comeback win in the ring was hailed as a moment of hope amid the aftermath of a deadly typhoon.

Mr. Pacquiao disclosed  that the Bureau of Internal Revenue (BIR) wanted 2.2 billion for alleged unpaid taxes in 2008 and 2009, when he was at the peak of his career and one of the world's highest-earning athletes.

Mr. Pacquiao, 34, insisted he had paid his taxes in the United States, and so did not need to do so in the Philippines because the two countries have an agreement allowing their citizens to avoid double taxation.

But tax commissioner Kim S. Jacinto-Henares, who has spearheaded a high-profile campaign against tax evasion in the Philippines, stood firm yesterday, saying Mr. Pacquiao had failed for two years to provide documents proving his US payments.

"2.2 billion is what [Mr.]Pacquiao owes now because of surcharges and interest," Ms. Henares said on ABS-CBN television.

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Ms. Henares said the tax bill may be cut if Mr. Pacquiao did provide certified documents proving he paid the US Internal Revenue Service (IRS).

"What we want is evidence that he (Mr. Pacquiao) actually paid the tax."

But she said that even if he had paid the 30% tax rate in the United States, there would still be extra charges due in the Philippines because it had a higher rate of 32%.

The tax office has frozen his bank accounts in the Philippines, which Mr. Pacquiao said had left him financially paralyzed.

Ms. Henares said the tax office could eventually take the money owed by stripping him of his assets.

She said the tax office had already placed a "lien" on a Pacquiao property, worth millions of dollars, in one of Manila's most exclusive gated communities.

A lien is a form of security which allows the tax office to take back money it is owed, via lease payments or sale of the property.


Mr. Pacquiao went on a publicity blitz on Tuesday night, appearing on all the major domestic television networks, to insist on his innocence and brand the tax office's actions "harassment."

"I am not a criminal or a thief. I am not hiding anything. I will face my problems as they come," Mr. Pacquiao said.

Mr. Pacquiao's American promoter Robert "Bob" Arum, chief executive of Top Rank Promotions, also released a statement saying his Top Rank firm had paid the 30% taxes directly to the US Internal Revenue Service, and certified paperwork to show proof would be available "very soon."

"Filipino authorities confirmed that [Mr. Pacquiao] is not required to pay double tax," Mr. Arum said in a statement.

"If [Mr. Pacquiao] paid US taxes for fights and endorsements that occurred on US soil, he is not required to pay double taxes in the Philippines," he added.

He added that Top Rank has deposit confirmations for each payment made and that the boxing agency has done the same for all US endorsements it has facilitated on Mr. Pacquiao's behalf.

Mr. Arum, in the same statement noted, however, that BIR officials wanted certified paperwork of those transactions from the IRS rather than bank deposit confirmations.

"Top Rank submitted copies of the EFT deposit acknowledgements to the BIR as proof of payment. The BIR has received the documents but directed [Mr. Pacquiao] to obtain 'certified' documents directly from the IRS itself," he said.

"Obtaining certified copies of documents from the IRS takes time. Manny made the formal request to the IRS and we have every expectation that the necessary documents will be furnished to the BIR very soon," Mr. Arum added.

But Mr. Pacquiao's Manila lawyer told AFP yesterday that he would not give the tax office those documents, preferring instead to fight the issue in court.

"This is no longer within the jurisdiction of the BIR," lawyer Tranquil Salvador said.

"The tax case is now with the Court of Tax Appeals. We do not have to submit anything to the BIR." A court hearing has been set for Dec. 5.

Mr. Pacquiao, a former street kid who did not finish high school, has used his sporting career to launch a successful political career -- he is a second-term congressman with publicly declared ambitions of eventually becoming president.

Mr. Pacquiao, a member of the main opposition alliance to President Benigno S. C. Aquino III, hinted the case against him may be political, calling for those involved to "forget about playing politics."

At his peak Mr. Pacquiao was regarded as the best pound-for-pound fighter in the world, becoming the only man to win world titles in eight weight divisions.

He lost two fights last year, leading some to predict his career was finished.

But a convincing win over American Brandon Rios in Macau on Sunday reignited his career, sparking talk once again of a long-awaited bout against Floyd Mayweather.

BIR orders 2 Pasig firms closed

Published in Business World Online, the Bureau of Internal Revenue (BIR) has ordered the closure of two establishments in Ortigas Center, Pasig City, after they allegedly underdeclared their income to cut back on taxes.

Events place JCM Exhibit Depot, located at Mega Plaza, ADB Avenue corner Garnet Road, as well as Baldo Construction and Development Corp., in PSEC West Tower, Exchange Road, were shuttered on Friday, the BIR said in a statement.

JCM Exhibit Depot is owned by event's organizer Carlo Naguit Martin. The BIR said the firm failed to file its income tax and value-added tax (VAT) returns for 2011, underdeclaring all of its earnings for that year, estimated at 57.068 million.

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Baldo Construction, headed by Christopher A. Baldo, is engaged in general contracting for roads and buildings, counting among its clients the San Miguel group of companies. It allegedly underdeclared its 2011 taxable sales by more than 40%, disclosing only 15.413 million.

"The closures were effected after the subject taxpayers failed to comply with the requirements specified in the 48-hour Notice and the 5-day VAT Compliance Notice..." the BIR said in the statement.

The tax bureau has been shutting down establishments that violate the National Internal Revenue Code under its Oplan Kandado program. It is the main revenue collection agency of the government, accounting for some 70% of revenues.

The BIR is mandated to collect a total of 1.253 trillion in revenues this year. As of October, it has netted P993.54 billion. – Business World Online / AFP with Imee Charlee C. Delavin

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