Pacquiao: It’s earned money, not DAP, PDAF

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The boxing champ says his lawyers gave the tax bureau all the info they need and he's being singled out

WHY ME? Professional boxer and Sarangani Rep Manny Pacquiao cries foul over a Court of Tax Appeal order to freeze his bank accounts. File photo by Rappler

MANILA, Philippines (UPDATED) – Fresh from his victory against American boxer Brandon Rios in Macau, professional boxer and Sarangani Rep Emmanuel “Manny” Pacquiao now faces a different opponent – the Bureau of Internal Revenue (BIR).  

Pacquiao said the tax bureau ordered his bank accounts frozen due to an alleged P2.2-billion tax liability, leaving him financially paralyzed. 

“This is harassment,” the former eight-division world champion said in a television interview.

The disclosure came just two days after Pacquiao, 34, resurrected his boxing career with a unanimous points decision over Rios in Macau.

He dedicated his victory to victims of Super Typhoon Yolanda (Haiyan), which claimed thousands of lives in Visayas region this month. (READ: Haiyan survivors to Pacquiao: Help us)

Pacquiao arrived in the Philippines Tuesday, November 26 and immediately addressed the tax issue in a statement released to the media.

In his statement, he hit back calling BIR’s accusations “baseless.”

“The BIR claims I earned more than what I actually did, without any evidence to back it up. They ignored information given by Top Rank and HBO and insisted I earned more,” he said. “My lawyers have given them all the info that they want and they still refuse to believe. I really don’t know why I am being singled out.”

Pacquiao asked the Court of Tax Appeals to lift the bank freeze, but the court has yet to rule on the petition, according to court papers.

‘Not DAP or PDAF’

Pacquiao, who is on his second term as Sarangani representative, compared his situation with the legal scrutiny being faced by public funds.

Hindi ako makapag-withdraw ni isang singkong sentimo sa sarili ko pong pera. Hindi ko magamit para man lang makatulong. Ang pera kong ginarnish ng BIR ay hindi po nakaw at hindi po PDAF (Priority Development Assistance Fund) o DAP (Disbursement Acceleration Program). Ito po ay galing sa lahat ng suntok, bugbog, pawis at dugo na tiniis ko sa boxing,” he added.

(I cannot withdraw even one cent of my own money. I can’t even use it to help. My money that was garnished by the BIR was not stolen, it’s not PDAF or DAP. It came from all the punches, sweat and blood that I endured in boxing.)

The Supreme Court earlier declared lawmakers’ PDAF, the subject of a multibillion scam, as unconstitutional. Meanwhile, the court is presently hearing oral arguments for DAP, the executive’s economic booster scheme.

‘Only P1M was frozen’

BIR chief Kim Henares confirmed that bank accounts of Pacquiao and his wife were frozen.

However, she denied any harassment, saying only two bank accounts containing a total of P1.1 million were held.

She said she issued a warrant of distraint and levy after Pacquiao failed to pay his liabilities. “We wrote banks and told them if you see his money, tell us how much and garnish that amount,” she said in a radio interview.

She said out of 22 banks they wrote, only two reported holding accounts owned by the boxing champ.

“Our presumption is there’s no other money that’s been garnished except for that P1.1 million. The banks should have reported it to us if they are in fact holding money in custody for the government.”

The amount is measly considering the huge winnings Pacquiao takes home from his boxing matches.

Asked where he could be keeping the rest of his money, Henares replied: “Ay hindi ko alam sa kanila. Posibleng na-withdraw na bago na-garnish. O kaya ang pera n’ya ay wala dito, nasa America or nasa ibang bansa.” (We don’t know with them. It’s possible he already withdrew his money before we ordered it garnished. Or maybe his money’s not here, it’s in the US or some other country.)

Tax case

The freeze order stemmed from an assessment made by the tax bureau, alleging Pacquiao has P2.2 billion in unpaid taxes, including interest and surcharges.

BIR claimed Pacquiao failed to declare his winnings from his 2008 and 2009 boxing matches in his income tax returns for said years.

But the boxing icon said he already paid taxes on those earnings in the US, which has a treaty with the Philippines that allows citizens of both countries to avoid double taxation.

He said the tax bureau rejected the documents he provided to prove he had already paid the US Internal Revenue Service (IRS).

“I am not a criminal or a thief. I am not hiding anything. I will face my problems as they come,” Pacquiao said.

“I have already paid my taxes in America. Had I not paid the correct taxes they (US authorities) would have come after me and I would not have been able to travel there.”

Henares said that taxes paid in the US are creditable here, but she stressed a proper process of filing must be followed.

Kailangan i-report lahat ng kita mo, tapos ko-kompyutin ang tax sa Pilipinas. Tapos no’n pwede mong ibawas ang binayad mong buwis sa America pero dapat may evidence na nagbayad ka sa IRS.” (All earnings must be reported in the Philippines and your taxes will be based on that. After that, taxes you paid in the US will be deducted provided you have evidence that you indeed paid the IRS.)

Henares said Pacquiao failed to submit the proper documents.

She said the bureau gave him two years to respond to their assessment but all he submitted was a letter from his US promoter Top Rank saying he had paid his taxes in the US, according to Henares.

“Anyone can write that. That’s not official document,” she noted.

President Benigno Aquino’s spokesman Herminio Coloma brushed off suggestions Pacquiao was being singled out for political harassment.

“We are a government of laws, not of men,” Coloma told reporters.

The government has been running a campaign against high-profile tax evaders, targeting movie stars as well as businessmen who flaunt their wealth through flashy sports cars.

Donations for Yolanda victims

Pacquiao said most of his cash was kept in his Philippine bank accounts. He did not say how much was garnished.

He said the freeze order left him without money to pay his staff, and forced him to borrow “not less than one million pesos” to fulfill pledges to help victims of Typhoon Yolanda.

Pacquiao is now eyeing more lucrative fights in the US as he continues to pursue a political career.

At his peak, he was regarded as the best pound-for-pound fighter in the world, becoming the only man to win world titles in eight weight divisions.

The former street kid who ran away from home to pursue a boxing career became one of the globe’s wealthiest athletes.

But his career nosedived after suffering two losses last year, the second in a humiliating knockout to Mexican Juan Manuel Marquez that prompted questions over whether the ageing warrior should retire.

But even last year, Forbes magazine listed him as the 14th highest-paid athlete globally with an estimated $34 million in earnings. – with reports from Angela Casauay/ and Agence France-Presse

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