MANILA, Philippines (UPDATED) – The Bureau of Internal Revenue has found “some discrepancies” in the tax declarations of Chief Justice Maria Lourdes Sereno, an official from the agency said on Monday, February 19.

“As of now we have made some observations regarding the [tax] declarations and there are some discrepancies but we cannot yet divulge the figures,” said BIR Deputy Commission Arnel Guballa during the House impeachment committee’s hearing to determine probable cause in the complaint against Sereno.

Guballa, however, declined to make public the initial findings, citing confidentiality clauses in the country’s tax code. He said they have written the Office of the President for permission to release the information, citing Section 70 of the code. (READ: Impeachment committee rushes BIR to find ‘anomaly’ in Sereno’s tax payments)

“We will be susceptible to charges if we just give information,” said Guballa, after members of the committee insisted the bureau release the information.

Leyte 3rd District Vicente Veloso, a former Court of Appeals associate justice, insisted that subpoenas issued by the committee must be complied with by agencies covered.

Justice committee chairman Oriental Mindoro 2nd District Representative Reynaldo Umali pointed out that the committee had only sent an invitation and had not yet issued a subpoena for the documents or for the BIR’s testimony.

Quezon City 1st District Representative Vicente Crisologo also insisted that Guballa release the initial report, because failing to do so would impede the committee’s work.

Umali stepped in, reminding his colleagues to “read the pertinent provisions” of the tax code “so we better understand [the discussion].”

Guballa said they were not getting in the way of the House committee’s work but wanted to follow the “rule of law.” The deputy commissioner said they would also ask for the Solicitor General’s take on the limits to the disclosure of BIR documents and findings.

The committee eventually approved Misamis Occidental 2nd District Representative Henry Oaminal’s motion to issue a subpoena directing the BIR to submit the initial findings. Umali also told Crisologo to issue a position paper on the matter if he wishes to do so.

Sereno should also be given a chance to respond to the bureau’s findings, Guballa said.

PIATCO case earnings

Lawyer Larry Gadon, in the complaint, accused Sereno of failing to disclose her earnings from winning a government arbitration case against Philippine International Air Terminals Co. Inc. (Piatco) in her Statement of Assets, Liabilities, and Net Worth (SALN), a document every public official is required to submit.

According to Guballa, Sereno declared the following income from the Office of the Solicitor General, where the funds for the Piatco fees came from:

2006
Income: P1,396,631
Tax withheld: P209,494

2007
Income: P3,633,076.42
Tax withheld: P544,961.46

2008
Income: P4,559,308.24
Tax withheld: P683,896.24

ABS Representative Eugene de Vera noted that the figures were far from the P30-million fee from the Piatco case.

Asked for a clarification by Rappler on the sidelines of the hearing, Guballa said both amounts are taxes, and further questions will be answered when they returned to the hearing. The information provided for by resource persons in the impeachment hearing is often restricted by the questions lawmakers ask.

Sereno, in her official reply to Gadon’s allegations, said she earned P30 million from the Piatco case and that she received these fees over a period of 5 years, from 2004 to 2009.

She also said that over P8.7 million was paid in taxes – P14.7 million used on medical expenses and the purchase of a house and vehicle, and the remaining P6.9 million was used for family expenses from 2004 to 2009.

Reacting to the BIR’s revelations and the reactions of lawmakers, Sereno’s spokesperson lawyer Jojo Lacanilao said the higher amounts were “not income but tax.”

That means initial tax deductions were lower in the beginning because Sereno’s total tax rate for the year had yet to be determined. Once it had been determined, Sereno paid more to make up for the difference. 

Lacanilao explained: “If you pay professionally, the withholding tax is removed. Normally, it’s around 10% or 15%, maybe less. But if it turns out that your tax rate for the year is 32%, then the 10% from earlier is too little, right? So you’ll have to pay that.” 

Sereno has refused to appear personally before the House committee and has said that the proper venue to air her side would be the Senate sitting as an impeachment court.

The chief justice wanted her legal team to represent her before the committee but this was not allowed. 

The committee also discovered that Sereno did not submit a bulk of her SALNs when she applied for the top judicial post. Colleagues in the High Court have accused her of “manipulating” the Judicial and Bar Council.

Impeachment hearings

The justice committee has held more than 10 hearings to discuss the impeachment complaint against Sereno. It had earlier deemed the complaint sufficient in form, substance, and grounds.

According to Umali, they will be holding at least one more hearing before the committee eventually puts to a vote the question of probable cause to pursue the complaint. If the committee votes yes, that means it recommends that the House impeach Sereno.

The committee will then submit its report before the House plenary. If at least two-thirds of the House membership votes in favor or the report, Sereno is deemed impeached.

The case will then be forwarded to the Senate, which will determine if she is guilty or not. – Rappler.com