Pichay says tax evasion rap 'political persecution'

ABS-CBN News

Posted at Jul 21 2011 12:46 PM | Updated as of Jul 21 2011 08:46 PM

MANILA, Philippines - Former Surigao del Sur Rep. and dismissed Local Water Utilities Administration (LWUA) chair Prospero Pichay denied he evaded paying taxes, adding that the case filed against him by the tax bureau was "political persecution."

"I was not surprised. I knew this was coming. They want to persecute officials of the previous administration," he told ANC in a phone interview.

"First, for the record, I want the public to know that I have been paying my taxes regularly and religiously."

In a press conference Thursday morning, the Bureau of Internal Revenue (BIR) announced that it sued Pichay for his "willful attempt" to evade taxes amounting to P32.73 million.

BIR Commissioner Kim Henares said Pichay did not file his income tax return (ITR) in 2009, when his net worth grew by a hefty P58.5 million based on his Statement of Assets, Liabilities and Net Worth (SALN).

"We're running after him for a total tax liability of P32.73 million. This case is based solely on his SALN. We're not talking about any other things. As we go along, it (the tax liability) may grow," Henares said.

But Pichay said even BIR's findings on his SALN were false. "There is no big jump (in my assets) in 2009, that's not true. And I file my ITR every year. I have my records."

No due process

Pichay also branded the BIR's move as a violation of his right to due process. He said the bureau should have informed him of his tax liability before filing a case.

"If I had a tax deficiency, then I should have been informed, then we can reconcile. There should be a notice first. But without informing me, they are filing a case."

"Every single Filipino is entitled to due process. Here, there is no due process," he added.

Pichay, who is also facing charges for the alleged anomalous acquisition by LWUA of a controlling stake in a thrift bank in Laguna, said the Aquino administration was just going after officials who worked under President Aquino's predecessor and rival, Gloria Arroyo.

"They're trying to demonize officials of the previous administration," said Pichay.

The BIR, however, was quick to dismiss the allegations.

"We have never been but fair. We have been prodded by various sectors several times to file cases against people. But... the only time we file cases is if we have evidence," Henares said.

"Hindi pwedeng umatras ang gobyerno dahil sinasabing harassment. Lahat naman yata ng naakusahan sinasabing harassment."

LWUA controversy

Henares said the BIR's investigation of Pichay stemmed from charges filed against him when he was LWUA chair.

Pichay and two other LWUA officials were ordered dismissed by the Ombudsman for investing P780 million agency funds to acquire Laguna-based Express Savings Bank without clearance from monetary officials in 2009.

"We're investigating any anomaly that has come to our attention. The LWUA anomaly has been in the papers, it has been investigated," said Henares.

Pichay was appointed by Arroyo to LWUA in 2008 after he lost in the senatorial elections under the administration ticket. He was also leader of Arroyo's Kabalikat ng Malayang Pilipino (KAMPI) party.