Top corporations tagged in tax scam

Top corporations benefited from a conspiracy led by resigned Bureau of Internal Revenue Commissioner Rene Bañez to defraud the government of as much as P10 billion in much-needed tax revenues, according to Lakas Rep. Aniceto G. Saludo, Jr. (Lone District, Southern Leyte).

            In a privilege speech at the House of Representatives, Saludo identified the top corporations as Metro Pacific Corporation, Philippine Long Distance Telephone Company, and Smart Communications. 

Saludo named businessman Manuel Pangilinan, chair and chief executive officer of Metro Pacific Corporation and the two other giant telecommunications companies, as the principal beneficiary of the tax scam.   

According to Saludo, the tax scam started when the Fort Bonifacio Development Corporation, a subsidiary of Metro Pacific Corporation, filed a total of 19 tax refund cases with the BIR involving a total amount of P6 billion.

One of the claims in the amount of P15 million was denied by the BIR when Bañez was not yet the commissioner. FBDC appealed the case to the  Court of Tax Appeals and obtained a favorable decision.

But the BIR with Bañez already at the helm failed to file an appeal, thus making the CTA ruling final and executory. The CTA Entry of Judgment issued on January 20 this year set a precedent for the 18 other cases, thus allowing FBDC to evade payment of as much as P6 billion in taxes.

Bañez is also liable for economic sabotage in the case of the sale of Fort Bonifacio land worth P71.2 to FBDC, for which the latter had to pay Documentary Stamp Tax, Saludo said.

But the government-owned Bases Conversion Development Authority assumed the P1.18 billion tax obligation of the FBDC, a private corporation, thus effectively defrauding the government of tax revenues. 

In yet another case, Saludo said, Bañez caused the reduction of the zonal valuation of Fort Bonifacio land from P100,000 per square meter to P35,000 per square meter, resulting in huge losses in tax revenues to the government.

All in all, up to P10 billion in tax revenues that should have gone to government coffers was lost as a result of the conspiracy between Bañez and  his former employer, Metro Pacific Corporation, Saludo said

The solon recommended the prosecution of Bañez and his “co-conspirators in the Grand Scam of the Millennium” for plunder, economic sabotage and gross violation of the Anti-Graft and Corrupt Practices Act. 

Bañez and the others involved in the tax scam should also return to the government all assets acquired as a result of fraudulent transactions, Saludo said.

Finally, the Southern Leyte congressman said, the President should appoint a new BIR Commissioner who is competent, honest and untainted by any conflict of interest arising from connection with the big auditing firms in the country.

(Released on August 27, 2002)