“Bring the PCGG into the discussion.”
Pure nonsense.
That is how Harvard-educated lawyer and long-time tax expert Juan Ponce Enrile describes the so-called P203 billion estate tax being slapped by their critics on the heirs of the late Ferdinand Edralin Marcos Sr., president of the Philippines from December 30, 1965 to February 25, 1986.
Enrile, or JPE, for short, was former Finance undersecretary to Marcos before becoming the strongman’s defense secretary/minister for 17 years. After Marcos was ousted, he was elected to the Senate and became its president.
The former Senate president scoffs at retired Supreme Court Justice Antonio Carpio’s math on the so-called estate tax of the Marcoses.
Carpio and presidential candidate Manila Mayor Isko Moreno have collaborated and computed the Marcos estate tax to be P203 billion, up from P23 billion when the tax became final and executory in 1991.
Enrile suggests that Carpio stop issuing wrong and baseless pronouncements in connection with the estate tax of the Marcoses because “he (Carpio) does not fully comprehend tax laws”.
Politics could be the only reason behind the issue, says Enrile, especially since the May 9 presidential elections is only a little more than a month away.
“Alam ninyo, mga kababayan pulitika ngayon eh bago kayo maghusga, bago kayo maniwala, makinig kayo. Bago kayo maniwala isipin muna ninyo kung totoo yung sinasabi ng mga tao na yan,” the former senator said in a radio interview.
“Kahit na ex-Supreme Court Justice (Carpio) kung hindi nya na pag-aralan yan at hindi nya naintindihan at hindi nya prinaktis sa kanyang pagiging abogado, hindi nya naintindihan yan,” Enrile pointed out.
“Ang taxpayer ng estate tax, ay hindi ‘yung tagapagmana, kalokohan ‘yung sinasabi nila na may utang si Bongbong Marcos at kanyang mga kapatid,” Enrile explained.
“Ang gumawa ng issue, ang gobyerno ni Cory (Aquino), sinequester nila yung mga ari arian ni presidente Marcos, pagkatapos sisingilin nila ng estate tax eh kalokohan yun, kaya dapat yung legitimacy nung ari-arian ni Presidente Marcos, malinis yun at dun mo babayaran yung utang niya kung may utang siya,” Enrile said.
The camp of presidential frontrunner Ferdinand ‘Bongbong’ Marcos, Jr. earlier said the issue surfaced because of gutter politics.
“Our rivals are misdirecting everyone by claiming that the case has attained finality when the truth of the matter is, it is still pending in court and the ownership of the properties in litigation has yet to be settled,” said Atty. Vic Rodriguez, Marcos’ spokesman and chief of staff.
“It is not coincidence that rivals of presidential frontrunner Bongbong Marcos are raising this matter in unison a few weeks before the elections; sadly, this is all about politics,” BBM’s spokesman added.
For his part, former Bureau of Internal Revenue Commissioner Jose Mario “Jojo” Buñag tells us what he says is “the unvarnished truth as far as I know.” Jojo was BIR chief from October 2006 to June 2007. He was No. 2 in the 1968 bar exams.
When FM died in 1989, the heirs were obliged to file the estate tax return and pay the estate tax within six months. No return was filed, Jojo Buñag recalls.
In 1992, Ramos was elected president and appointed Liwayway Chato BIR commissioner. Under the Tax Code, when any tax return is supposed to be filed and it is not filed, the Commissioner is authorized to make the return to the best of his/her knowledge and file it with the BIR.
“Since no return was filed on FM’s estate, Commissioner Chato made the return and filed it based I think on what were being reported as assets of FM,” explains Buñag.
Also, since no taxes were paid, the BIR issued an assessment for P23 billion based on the return Chato prepared and filed. “The Marcos’ lawyer then made a fatal mistake,” Jojo winces. Instead of elevating the case to the Court of Tax Appeals within 30 days as required he elevated it instead to the Court of Appeals.
Expectedly, the CA denied the petition was filed in the wrong court. Instead of rushing to the CTA to meet the deadline, the Marcoses went up to the Supreme Court which affirmed the CA decision.
Since the 30 days to go to the CTA had lapsed, the Marcoses were out of remedies and the assessment has become final and executory. “Rightly or wrongly, the assessment is now beyond question,” Jojo opines.
So even if Chato included in the computation properties not belonging to FM, it cannot be questioned anymore. That ship has sailed. A final assessment is like a court final judgment.
Jojo suggests the assessment can be executed by garnishing bank accounts and levying on properties. The reason BIR has not collected is because the Marcoses have not paid, FM has no bank accounts and the only known real property in his name is the Ortega property in San Juan where he used to live.
Chuckles Jojo: “Believe it or not, FM did not put properties in his name. Even the properties in New York were in other people’s names. Other assets, like the Swiss accounts, the paintings, etc. were claimed by the PCGG as ill-gotten and ergo did not belong to FM but to the Phil government.”
Another tax expert, a Harvard-educated lawyer (master of laws and international tax program, 1997), lectures me on Tax 101. The lawyer explains:
Prescription to collect is five years from the finality of assessment.
In the case of BBM, the assessment was issued in 1991 Sept (I think), it was not protested, so it became final in 30 days. An assessment not protested within 30 days becomes a delinquent account, due and collectible. And the BIR has five years to collect, counting from this period.
In the case of BBM, the BIR started enforcing collection by levying on Marcos properties mostly sequestered by PCGG) beginning 1991-1993. Public auctions were also conducted from 1991 to 1993. Collection process was suspended when BBM filed a case in court questioning it as he claimed that collection of taxes should go through the probate court.
Meanwhile, the running of the five-year prescriptive period to collect was suspended during this time that the case was under litigation. In 1997, the SC upheld the CA saying that the BIR can proceed with summary collection.
Thus in 1997, the BIR should have resumed collection of the tax again, and the five-year period to collect should run again for the remaining three years. The right of the government to collect ended 2000 or 2001. After that, BIR could no longer collect under the rule on prescription.
Why is everybody mum about this prescription? Including Kim (Henares, BIR commissioner under President Ramos)? Is she playing politics? Clearly, she is.
Also note that the same assets included in gross estate were the same sequestered assets by PCGG. Hence, to enforce collection, BIR can levy and sell the same assets. PCGG should now account for those assets, and all proceeds of sale made by PCGG should be considered as payment for the estate tax. Reason being, payment of tax takes precedence over any claim.
It is important to bring PCGG in this discussion, for them to account for those assets.
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