MANILA, Philippines - The Bureau of Internal Revenue (BIR) has maintained that the supposed out-of-court negotiation over the P2.2-billion tax case of world-boxing champ Manny Pacquiao continues and is limited to the Tax Code provisions.
Under Section 204 of the Tax Code, the BIR head is authorized to compromise the payment of any tax “if there is a reasonable doubt as to the validity of the claim against the taxpayer or when the financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.”
BIR Commissioner Kim Henares said yesterday Pacquiao would need to apply for a compromise settlement as provided under the Tax Code and prove his case is qualified under Section 204 of the Code.
“It is not a matter of negotiation but a matter of qualifying,” Henares pointed out as she brushed aside speculations that the BIR had dropped its case against the boxer-lawmaker from Saranggani following the Dec. 21 shooting competition at the Presidential Security Group where she partnered with Paquiao.
Henares, a gun enthusiast, said she and Pacquiao did not talk about the tax case during the shoot fest.
The BIR chief stressed that the government would continue to run after Pacquiao to ensure that he pays proper taxes.
Pacquio and Henares have been trading barbs due to the boxer’s tax liabilities.
Presidential Communications Operations Office Secretary Herminio Coloma Jr. earlier described the event as a “friendly engagement” that shows President Aquino does not harbor any ill feelings against the boxing icon.
“Joining a sports activity where the President is present does not stop or deter the BIR from pursuing its case against Rep. Paquiao,” Coloma said in a statement last Tuesday.
Pacquiao’s camp is disputing the BIR’s tax deficiency assessment, insisting he already paid multi-million taxes to the United States Internal Revenue Services on earnings from his boxing matches and pay-per-view in 2008 and 2009.
The US IRS, however, is also demanding around $18 million in alleged back taxes from Pacquiao.
Under the Tax Code, a compromise payment of at least 40 percent of basic tax assessed may be allowed when reasonable doubt as to the validity of the assessment against the taxpayer exists.
In cases where the taxpayer is suffering from a net worth deficit or has been declared bankrupt, a minimum compromise rate equivalent to 10 percent of the basic assessed tax may be levied.