DOJ finds probable cause to sue Neri for tax evasion

By Ina Reformina, ABS-CBN News

Posted at May 12 2011 11:34 AM | Updated as of May 13 2011 12:58 AM

MANILA, Philippines (UPDATE 2) - The Department of Justice (DOJ) has found probable cause to file tax evasion charges against former National Economic Development Authority (NEDA) and former Social Security System (SSS) chief Romulo Neri for under-declaration of his income or revenues earned from various corporations for taxable years 2008 and 2009.

Justice Undersecretary Francisco Baraan III told reporters today that the DOJ will file a P15-million tax evasion case against Neri before the Court of Tax Appeals either today or tomorrow.

Bureau of Internal Revenue(BIR) Commissioner Kim Henares said she is "happy, in the sense that our work is vindicated, but of course, sad, that we have to reach this stage."

"The BIR will be the happiest when we no longer file tax evasion cases because that (will mean) the people are paying their taxes," she added.

The BIR filed an P18.2-million tax evasion complaint against Neri last November following a Senate Committee on Finance inquiry that revealed Neri earned from the sale of his stock options. It was revealed in the same inquiry that Neri, along with three other SSS officials received "excessive and unwarranted bonuses and allowances, including the exercise of stock options," of at least P127-million.

Neri's alleged under-declared income or revenues are an offshoot of his stock options at PHILEX Mining Corporation where he sat as board member from 2007 to 2010  and his director's fees at Union Bank of the Philippines. The SSS invested its members' trust fund in these two companies.


According to the BIR,  Neri under-declared his income by P9,999,392 or by 88% in 2008 and by P18,788,307 or 54.92% in 2009 which resulted in a tax deficiency of P6,290,012 for 2008 and P11,977,719 for 2009 for an estimated aggregate tax liability of P18,267,732, inclusive of surcharges and interests.

In his counter-affidavit, Neri said the BIR recorded his 2010 income as his 2009 income and his 2009 income as his 2008 income, thus the discrepancy.


Neri insisted all his income tax returns were filed appropriately, but failed to convince the DOJ.