Truth Commission may probe Iggy for tax evasion

ABS-CBN News

Posted at Aug 06 2010 04:00 PM | Updated as of Aug 07 2010 08:51 AM

MANILA, Philippines - The Department of Finance on Friday said the soon-to-be formed Truth Commission could investigate a previous tax evasion charge against Negros Occidental 5th District Rep. Ignacio "Iggy" Arroyo for failing to declare ownership and paying taxes on the multi-million-peso Jose Pidal account.

Finance Secretary Cesar Purisima said the tax evasion charge against the congressman is covered by the Truth Commission, which seeks to investigate corruption scandals during the Arroyo administration.

"If there is a finding, if we can establish anything, then we will file a case. There has to be a process. It should not a be a witch-hunt. It doesn't matter if it's an ally or an enemy who is being investigated," he told radio dzMM.

In 2005, the Bureau of Internal Revenue (BIR) under then Commissioner Guillermo Parayno started an investigation into the assets of Iggy Arroyo, the brother-in-law of then President Arroyo, after he admitted owning the P321 million "Jose Pidal" account allegedly owned by First Gentleman Mike Arroyo.

Before the investigation, Arroyo had declared a net worth of P286.2 million in 2004.

The BIR investigation was later sidelined after Parayno and other government officials belonging to the "Hyatt 10" group resigned from their posts. 

In the interview, Purisima said public officials could undergo a lifestyle check to see if their lifestyles match their declared net worth. The finance chief said the government will not hesitate to prosecute government officials who do not pay their taxes.

"There are no sacred crows in the paying of taxes. Everyone must do their duty in paying their taxes and that includes allies of the President," he said.

He said tax collection only brings in about 13% of the country's annual gross domestic product (GDP), compared to the 17% recorded by neighboring countries. He said the 3% lost to collection inefficiency or corruption is equivalent to about P250 billion annually.