MANILA, Philippines—World boxing champ and Saranggani Rep. Manny Pacquiao and his wife Jinkee have asked the Supreme Court to stop the Court of Tax Appeals (CTA) from requiring them to deposit a cash bond of P3.29 billion or a surety bond of P4.94 billion as a condition to suspend the collection of their alleged tax deficiencies in 2008 and 2009.
In a petition for certiorari filed before the high court last month, the Pacquiaos said the payments being ordered by the tax court far exceeded their current net worth of P1.186 billion.
The Bureau of Internal Revenue (BIR) initially said the Pacquiaos had evaded tax payments of P2.2 billion, but the amount was later increased to P3.29 billion, according to the petition.
The petition, dated July 24 but released only on Friday, named as respondents the CTA, where the Pacquiaos are fighting the tax deficiency collection, and the BIR, which initiated the action.
“If it was impossible for petitioners to simply settle the deficiency income tax assessments because the amount sought to be collected by respondent commissioner far exceeds their net worth, then for the same reason, it is equally impossible for petitioners to post the required cash or surety bond,” the 75-page petition said.
Bond exceeds net worth
“Petitioners will be unable to post the required bond within the prescribed period (10 days) since the amount of the bond required far exceeds their net worth, not to mention that a portion of the taxes which the bond seeks to cover has already been fully paid,” the pleading said.
It said the bond requirement goes against the intent of the CTA’s April 22 resolution, which suspended the collection of taxes against the Pacquiaos. The petitioners said this “will pave the way for the seizure of all of petitioners’ real and personal properties for liquidation and application towards the settlement of their alleged income tax liabilities.”
The petitioners scored the CTA for acting “with grave abuse of discretion” in ordering their bond payment, citing how the BIR’s tax collection against them was “patently in violation of law thereby blatantly breaching petitioners’ constitutional right to due process.”
In a resolution in April, the CTA granted Pacquiaos’ petition to suspend BIR’s collection of their supposed tax deficiencies and lifted the tax agency’s garnishment of his assets meant to cover these unpaid tax dues.
The order was, however, issued on the condition that the Pacquiaos deposit the bond within 10 days of receipt of the document.
In the petition, the Pacquiaos told the high court how they had fulfilled tax obligations both in the Philippines and the United States where Pacquiao’s boxing matches were held.
In 2008 for instance, the lawmaker paid the US Internal Revenue Services (IRS) $3.88 million for his payout totaling $12.94 for three Top Rank bouts in Las Vegas. In 2009, Pacquiao paid the IRS $4.47 million for earnings of $14.9 million from two fights under the same boxing promoter.
The petitioners also cited how the “premature seizure and liquidation” of their assets would be detrimental to both their professional career and philantrophic work.
“…[T]he premature seizure and liquidation of all of the properties of petitioners on account of respondent commissioner’s premature tax collection efforts will not only destroy them financially… but, moreover, will forever tarnish their reputations beyond repair, even in the absence of a judicial determination rendered after the trial on the merits of the case,” said the petition.
It said the seizure of their assets will stop Pacquiao’s “philantrophic endeavors” and he and his wife’s standing as elected officials—he as lawmaker for Saranggani and she as vice governor of the province.
“The seizure of all their properties will be viewed negatively by the electorate and will therefore adversely affect their ability to run for higher office,” said the petition.
The tax case would also “adversely affect” Pacquiao’s boxing career.
“Already, this tax case has become one of the reasons his main boxing rival Floyd Mayweather, Jr. refuses to fight him, thus depriving Manny of the opportunity to make boxing history and prove he is the best boxer of this generation,” read the petition.