DOJ okays tax evasion case vs Corona son-in-law

Buena Bernal

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The DOJ upholds criminal complaints arising from underdeclared income filed by the BIR against the son-in-law of former chief justice Renato Corona

DOJ. The DOJ recommends the indictment of an impeached magistrate's son-in-law. Photo by Buena Bernal/Rappler

MANILA, Philippines – The Department of Justice (DOJ) upheld the criminal complaints arising from underdeclared income filed by the Bureau of Internal Revenue (BIR) against the son-in-law of impeached Chief Justice Renato Corona.

The 20-page resolution released Wednesday, March 26, came on the day the Ombudsman ordered the immediate filing of criminal and civil charges before the Sandiganbayan against the former magistrate and his wife for allegedly amassing over P130 million in ill-gotten wealth

In the DOJ resolution, the panel of prosecutors approved the filing of two counts of willful attempt to evade tax and two counts of failure to file an income tax return against Constantino Castillo III over undeclared assets valued at more than P20 million. 

The DOJ panel of prosecutors found probable cause in what the BIR tagged as “688% underdeclaration made by Castillo.”

The resolution, dated February 20, said “…such is considered prima facie evidence of a fraudulent return.” 

The case will be filed on Thursday, March 26, before the Court of Tax Appeals (CTA).

In his defense, Castillo said that he had “requested his parents to help him borrow funds” to purchase the subject properties.

Castillo also cited his income as a licensed physician who underwent residency training from 1997 to 2002. He said he completed his fellowship training at the Tan Tock Seng Hospital in Singapore in 2007. 

Expenditure method ‘valid’

The panel of prosecutors justified the BIR’s use of the expenditure method – looking at Castillo’s property purchases relative to his income – in coming up with the tax deficiencies of Castillo.

“The crux of the instant case is the fact that respondent was able to purchase properties amounting to several millions of pesos, but he failed to substantiate the sources of the money used to buy these properties,” said the panel of prosecutors.

Castillo was able to buy a P10.5 million-worth Quezon City property in 2003 and another property in the same city for P15 million in 2009. The property he purchased in 2009 has a zonal value of P16,051,100. A documentary stamp tax of P240,800 was also paid by Castillo for the same property. 

Even Castillo’s cumulative income from taxable years 2005 to 2009 totalling P1,933,716.86 as reflected in his income tax returns would be insufficient to justify the property acquisitions, the prosecutors said.

The investigating panel is composed of Senior Assistant State Prosecutor Edna Valenzuela, Assistant State Prosecutors Mark Roland Estepa, and Jayvee Laurence Bandong.

Corona’s case

The DOJ also earlier filed 6 counts of willful attempt to evade tax and 6 counts of failure to file income tax return against dismissed Chief Justice Corona before the CTA.

Corona is indicted for failing to pay P120.5 million in taxes and failing to file his income tax return for 6 years – 2003, 2004, 2005, 2007, 2008 and 2010. The subject income is supposedly outside of his compensation as a Supreme Court (SC) justice.

Corona was dismissed in 2012, the year senators who declared him guilty of violating the Constitution supposedly received millions of pesos through the Aquino administration’s spending program – the Disbursement Acceleration Program (DAP).

The DAP is now the subject of deliberations by SC justices, after its constitutionality was questioned before the High Court. – Rappler.com

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