Manny Pacquiao to take tax battle to court

Philippine officials stand firm on alleged unpaid dues and threaten to seize assets, but champion boxer's lawyer lines up legal challenge

PUBLISHED : Wednesday, 27 November, 2013, 11:08pm
UPDATED : Thursday, 28 November, 2013, 9:38am

Philippines authorities stood firm in the face of insistence from Manny Pacquiao and his promoter that the boxer does not owe unpaid taxes, while the national hero vowed to take the fight to court.

Pacquiao has been told to pay a tax bill of 2.2 billion pesos (HK$390 million) or risk having assets seized.

Bob Arum, the promoter of Pacquiao's fights, insisted allegations of unpaid taxes from US bouts in 2008 and 2009 are false, and that his Top Rank agency made certain the proper money was paid to US authorities just to avoid such problems.

This is no longer within the jurisdiction of the BIR [Bureau of Internal Revenue]. The case is now with the court of tax appeals
Pacquiao's lawyer Tranquil Salvador

But tax commissioner Kim Henares, who has spearheaded a high-profile campaign against tax evasion in the Philippines, stood firm on Wednesday, saying Pacquiao had failed for two years to provide documents proving his US payments.

"2.2 billion is what Pacquiao owes now because of surcharges and interest," Henares said. "What we want is evidence that he actually paid the tax [to the US]."

But she said that even if he had paid the 30 per cent tax rate in the United States, there would still be extra charges due in the Philippines because it had a higher rate of 32 per cent.

She said the tax office had already placed a lien on a Pacquiao property worth millions of dollars in one of Manila's most exclusive gated communities.

A lien is a form of security, which allows the tax office to take back money it is owed, via lease payments or sale of the property.

"Filipino authorities confirmed that Manny is not required to pay double tax," Arum said. "If Manny paid US taxes for fights and endorsements that occurred on US soil, he is not required to pay double taxes in the Philippines.

"For each of Manny's fights that occurred in the United States, including those in 2008 and 2009, Top Rank withheld 30 per cent of Manny's purses and paid those monies directly to the Internal Revenue Service (IRS) via electronic funds transfer.

"Top Rank has deposit confirmations for each payment. Top Rank has done the same for all US endorsements it has facilitated on Manny's behalf.

"Obtaining certified copies of documents from the IRS takes time. Manny made the formal request to the IRS and we have every expectation that the necessary documents will be furnished to the BIR very soon."

But Pacquiao's Manila lawyer said that he would not give the tax office the documents, preferring instead to fight.

"This is no longer within the jurisdiction of the BIR [Bureau of Internal Revenue]," lawyer Tranquil Salvador said. "The case is now with the court of tax appeals. We do not have to submit anything to the BIR." A court hearing is set for December 5.

Pacquiao, a congressman and member of the main opposition alliance to president Benigno Aquino, called for those involved to "forget about playing politics".

Agence France-Presse, Associated Press