Manila, Philippines ? Manny Pacquiao may have beaten American Brandon Rios to a pulp Sunday, but needs more than Freddie Roach to get past the Bureau of Internal Revenue (BIR).
Two weeks before facing Rios in Macau, Pacquiao received a wicked uppercut from the Court of Tax Appeals (CTA) which froze the bank deposits of the boxing champion.
This was learned yesterday from sources inside CTA and BIR lawyers going after P2.2 billion Pacquiao allegedly owes the government in back taxes.
The freeze order had been kept out of public knowledge. It?s uncertain if Pacquiao was informed by his tax lawyers.
Sources said the CTA action came after Pacquiao?s lawyers protested the BIR?s warrant of garnishment (WG) attaching his personal assets, including bank deposits.
The BIR normally issues WG to prevent delinquent taxpayers facing court suits from disposing his or her assets during the trial.
The tax case arose from the alleged failure of Pacquiao?s accountant to report in his income tax returns (ITR) the multi-million-dollar taxes collected by the US Internal Revenue Service (IRS) from his prize winnings for the years 2008 to 2009.
Pacquiao, a congressman representing Sarangani, said the assessment which included interests and surcharges was ?arbitrary,? stressing he could not afford to pay the assessment because it was more than his net worth.
BIR lawyers said, however, that the tax debts have become ?demandable,? ? executory? and ?collectible? because the solon allegedly ignored to answer the final assessment notice (FAN) sent to him, which expired 30 days after receipt as provided in the Tax Code.
Revenue officials explained that as a Filipino citizen, Pacquiao is required to declare all his earnings, including from abroad, in his ITR.
Records showed the solon earned more than $28 million in prize money for successfully defending his various titles against Juan Manuel, David Rios, Oscar de la Hoja in 2008 and Ricky Hatton and Miguel Cotto in 2009.
Of the amount, the IRS collected $8.4 million, or roughly about P395 million.
Pacquiao declared that he did not include remittances to IRS in his returns due to the existing bilateral 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 here.
He added that what he remitted to the BIR was the value-added tax (VAT) amounting to P12 million to cover P114 million earnings from endorsing at least 14 products.
He argued that the BIR assessment has no legal force because it was based on ?best obtainable sources?
He accused revenue probers of ignoring the financial reports submitted by his promoter, Top Rank Promotions and other actual transaction documents, relying only on the so-called ?best obtainable evidence rule.?
