Neri denies tax raps, cites late receipt of income

ABS-CBN News

Posted at Nov 04 2010 04:56 PM | Updated as of Nov 05 2010 01:18 PM

Neri denies tax raps, cites late receipt of income 1MANILA, Philippines (UPDATED) - Former economic planning secretary and pension fund chief Romulo Neri visited the office of the Bureau of Internal Revenue (BIR) on Thursday to explain the supposed discrepancies in his income.

BIR chief Kim Henares told a press conference earlier that tax evasion charges have been filed against Neri at the Justice Department for his alleged tax deficiency estimated at P18.3 million, inclusive of surcharges and interests.

Neri allegedly under-declared his income as a director in the boards of Philex Mining Corp and Union Bank of the Philippines for taxable years 2008 and 2009. Neri was then the chief of pension fund Social Security Services (SSS), which has substantial stakes in these private firms.

"When he heard the news, he came over to my office to explain, to give his side of why there is no under-declaration. We listened to him and informed him that we already filed the case at the Department of Justice," Henares told ABS-CBN News in an interview.

Neri explained to the BIR that he was not able to declare his income from these firms on time since he belatedly received these.

In a phone interview, he said he received income from the two companies for the year 2008 only in 2009. Ditto for 2009 since he received them only in 2010.

He stressed that he has properly declared these earnings and the corresponding taxes in his income tax returns.

Timing of receipt

Henares said she listened to Neri's explanation, but told him to just wait for the summons from the Justice Department where he can explain his case.

Henares said that while she "understands where Neri is coming from," she said she is confident about their tax case against him since they got certification from the companies themselves detailing when Neri's earnings as board director were paid.

"[The certifications showed that] they paid this amount on that year," she explained.

"We looked at our case from all possible angles and we filed it based on documentary evidence," she stressed.

Tax collections, Senate investigation

The tax evasion case against Neri is part of the Run Against Tax Evaders (RATE) program, a name-and-shame campaign of the Aquino government to improve tax collections amid a widening budget deficit.

The BIR has included former SSS chair Thelmo Cunanan and other SSS officials in the tax raps. Cunanan has denied the charges.

Prompting the BIR to investigate the SSS officials' taxable incomes was a Senate investigation last August. It was bared that the pension fund officials earn millions of pesos from sitting as a representative of SSS in the board of different companies where SSS has a stake.