Pacman not yet off the hook – Kim

orld bo ing icon and aran gani e . Manny Pac uiao is not yet off the hoo des ite a ourt of a eals decision reventing the ureau of nternal evenue from garnishing his ro erties.

BIR commissioner Kim Henares said that while there would be no garnishment of Pacquiao’s properties at the moment, he has been required to post a cash bond of P3.3 billion or a surety bond of P4.95 billion, which is one and a half times the amount being demanded by the government from him.

“Basically, the decision of the Court was not to determine if the assessment has become final. A full-blown trial must be conducted. I do not see it as stopping the garnishment as it will only stop if he is able to post a cash bond or surety bond,” Henares said in a text message.

Pacquiao was given 10 days from receipt of the CTA ruling to deposit the bond, otherwise the BIR would continue the enforcement of collection of his tax deficiencies and the garnishment of his properties.

BIR deputy commissioner Estela Sales said the CTA’s decision to require Pacquiao to post cash bond or surety bond actually guarantees protection of government interest.

“In a way, it’s a victory for us because they are required to deposit cash bond or file a surety bond,” Felix Paul Velasco, chief of the BIR litigation division, said in a phone interview yesterday.

In its ruling, the CTA first division in effect granted the motion of Pacquiao and his wife Jinkee for the lifting of the warrants of distraint and levy and garnishment as well as suspension of collection.

“The suspension of collection shall be subject to petitioner’s depositing of a cash bond in the amount of P3,298,514,894.35 or posting of a GSIS bond or a bond from other reputable surety company duly accredited by the Supreme Court, in the amount equivalent to one and one half of the amount being collected or P4,947,772,341.53,” the 10-page resolution read.

“Failure to post the required cash or surety bond and submit the above-stated requirements within 10 days from receipt of the resolution will warrant the setting aside of the suspension of collection of taxes as herein granted,” it added.

Tranquil Salvador, one of Pacquiao’s lawyers, earlier said they may file a motion seeking to reduce the amount of bond set by the court.

Velasco said the battle is far from over as the CTA would still hear their motion seeking the dismissal of the petition for review filed by the Pacquiaos.

The case stemmed from Pacquiao’s alleged failure to pay taxes on earnings from his bouts in 2008 and 2009 and on his share in income from “payper-view” cable services and product endorsements.

His tax liability has now ballooned to around P2.65 billion due to interest charges.

Under the Tax Code, the BIR shall impose an interest of 20 percent per annum on unpaid tax obligations.

The tax liability was also due to Pacquiao’s failure to present proper documentation of his tax payments to the Internal Revenue Service (IRS) of the United States.

Days prior to Pacquiao’s rematch with Timothy Bradley, Henares had reminded Pacquiao to declare in his income tax return whatever he earns from the fight and pay the corresponding taxes.

Henares likewise reminded the boxer to properly document his US tax settlements to avoid being levied twice.

Pacquiao has so far only paid the value added tax amounting to P32 million, which covers his P114-million earnings from 14 product endorsements.

The BIR had attached a writ of garnishment against Pacquiao’s assets and properties to compel the boxer-politician to settle his tax liability to the government.

The boxing champ, however, is contesting the BIR’s findings, pointing out he has already paid all the required taxes.

Under the Philippine 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 is allowed.

Where the basic tax involved exceeds P1 million or where the settlement offered is less than the prescribed minimum rates, the compromise shall be subject to the approval of an evaluation board composed of the commissioner and the four deputy commissioners.

The Tax Code also states that no offer of compromise shall be entertained unless the taxpayer waives in writing his or her bank deposit secrecy privilege.