President Benigno Aquino III said that it was illogical to suggest that the government is harassing Saranggani Rep. Manny Pacquiao even as he chided the Filipino boxing champ for engaging in a media war with the Bureau of Internal Revenue.
Aquino said Pacquiao should just present evidence that he has complied with all the requirements of the BIR.
?Why should we harass him? Where is the logic in that?? he said in an interview in Bohol Thursday.
?I understand the frozen accounts total P1.1 million pesos. What is that compared to all of his winnings? With all due to respect to Congressman Pacquiao, if he believes that he has complied with all the necessary rules and all the necessary laws, then I?m sure he has all the evidence to (back up his claim),? the President added.
Aquino even described Pacquiao as being ?cavalier? in not responding to the legitimate summons of the BIR.
?He earns abroad, he pays taxes there, but the tax rate in the US and ours are different. That difference still has to be made up,? the President said.
Aquino said Pacquiao?s media interviews will not help him resolve the tax case.
?The way to settle it is to answer all of these queries by the BIR and not to engage in a media war. The media will not decide who is right or wrong. It will be our courts eventually, if it gets to that, who will decide,? Aquino added.
The tax case arose from the alleged failure of Pacquiao?s accountant to report in his income tax returns the taxes collected by the US-Internal Revenue Service from his prize winnings for the years 2008 to 2009.
BIR lawyers said Pacquiao?s failure to answer the final assessment notice sent to him has made his tax debts ?demandable, executory, and collectible.?
BIR records showed that the boxing champ earned more than $28 million in prize money in 2008 and 2009.
Of the amount, the US IRS collected $8.4 million or roughly about P395 million.
Pacquiao said he did not include the remittances to the IRS in his ITR because of an existing tax treaty agreement between Manila and Washington which stipulates that income tax paid by Filipinos in the US is creditable against his income tax liabilities in the Philippines.
Meanwhile, the BIR confirmed earlier reports that Manny Pacquiao?s tax liability has reached P2.2 billion because of penalties and surcharges.
A BIR source said that the agency has taken into account the taxes Pacquiao made in the US, but added that there are still taxes in the Philippines that he had left unsettled.
The BIR said the amount, which covered the years 2008 and 2009 stemmed partly from Pacquiao?s failure to present proper documentation of his tax payments to the Internal Revenue Service (IRS) of the United States.
It added that Pacquiao also failed to pay value added tax, pegged at 12 percent of his total income.
In 2008, the agency said Pacqluiao had a gross income of P1.5 billion, which includes his fights abroad, his share in pay-per-view earnings and his endorsements.
The BIR said that according to the Tax Code, a Filipino earning an income ought to pay an income tax of 32 percent.
Based on the estimated amount of Pacquiao?s gross income for 2008 and on the 32-percent income tax rate, Ortiz said, the boxer needed to pay P340 million in income tax to the BIR on top of the P120 million he remitted to the US government.
Because Pacquiao failed to pay the P340 million in income tax liability, the BIR added surcharges and interests on unpaid tax liabilities.
The BIR imposed a 50-percent surcharge, or P170 million, on Pacquiao?s basic income tax liability and also imposed a cumulative interest of P250 million for the four years that the boxer failed to pay the income tax liability.
On top of his income tax liabilities?the basic income tax due, plus surcharge and interest?Pacquiao also had an unpaid value added tax of P4.3 million.
Thus for 2008, Pacquiao?s total unpaid tax liabilities?combining basic income tax due, basic VAT due, and the penalties?amounted to P760 million. With Jennifer Ambanta
