Philippine election bombshell as tax agency says front runner Ferdinand ‘Bongbong’ Marcos owes US$3.9 billion on his father’s estate
- It’s more than 30 years since his dictator father died, but Marcos Jnr still hasn’t paid a centavo of the huge tax bill on his estate
- Political opponents hope the news will dent the appeal of a politician leading opinion polls ahead of the May 9 election. Marcos, meanwhile, has cried ‘fake news’
That much was confirmed by the country’s tax agency chief Caesar Dulay in a letter dated March 14 but released on Wednesday, in a development that opposition parties hope will dent Marcos’ popular appeal ahead of the May 9 election. A poll this week found Marcos’ approval ratings at 60 per cent, far ahead of his nearest rival Leni Robredo on 15 per cent.
The revelation about Marcos Jnr’s tax affairs comes after the opposition Aksyon Demokratiko Party asked Bureau of Internal Revenue chief to end months of speculation about whether he had paid the dues.
Marcos Snr died in 1989 but his family faced a long legal fight to inherit his fortune as the late dictator and his wife were accused of stashing up to US$10 billion obtained illegally during his multi-decade reign. In 2009, Marcos Jnr won a lawsuit at the Supreme Court naming him as the coexecutor of his father’s estate, along with his mother Imelda. The ruling went against the Bureau of Internal Revenue, which had wanted to auction off the family’s properties to help pay for the estate tax.
Dulay’s letter makes clear that in the 13 years since that ruling, the estate taxes have remained unpaid.
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It’s unclear whether the news will harm Marcos Jnr’s chances at the polls, but it has already been seized on by opposition groups. One of them, Akbayan, is now calling on the government to collect the taxes and use them to fund a jobs programme for the estimated 1.97 million Filipinos who have lost work to the Covid-19 pandemic.
Antonio Carpio, a former Associate Justice of the Supreme Court, explained that as an executor of the estate, Marcos Jnr would be responsible for collating all his father’s assets and paying all the outstanding debts and taxes on his estate. By law, none of the heirs to the estate – the dictator also had two daughters, Imee and Irene – would be able to use the assets until those dues had been paid, Carpio said.
Fake news, Marcos claims
Dulay’s letter was released to the media by Aksyon party chairman Ernesto Ramel Jnr shortly after Marcos had told a media forum on Wednesday that there was “a lot of fake news” about the taxes on his father’s estate.
“Let’s leave it to the lawyers to discuss because the so-called facts are not facts at all. They’re just presumptions,” Marcos had said.
According to Dulay’s letter, the bureau had sent a “written demand letter to the Marcos heirs on December 2, 2021 regarding their tax liabilities”.
In November last year the South China Morning Post filed a Freedom of Information request to the bureau asking whether the estate tax had been paid. At first the bureau said it would release the information on December 8, but shortly before that date it backtracked saying the release would be delayed as it ascertained whether it “could provide such confidential and sensitive data”. On January 27, the bureau formally denied the request.
On March 3 this year, Marcos’ lawyer and spokesman Vic Rodriguez said the payment of the taxes had been delayed following “an agreement” between the bureau and another agency tasked with going after the late dictator’s ill-gotten fortune.
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Rodriguez claimed the bureau and the Presidential Commission on Good Government (PCGG) had agreed they would wait for all the various outstanding cases surrounding the late dictator’s wealth to be finished before collecting the estate tax.
However, three PCGG commissioners said in a separate letter to Ramel on March 11 that they had a “verbal understanding” with the bureau that estate tax could be collected on those assets covered by all court rulings that awarded assets in favour of the Marcoses.
The commissioners noted that in 1991, when the bureau made its original assessment, the estate tax due was 23.3 billion pesos. That amount has ballooned over the years due to unpaid interest.
Carpio, the former Associate Justice, said it would be wrong for the Marcoses to use the verbal agreement between the bureau and the PCGG as an “excuse for not paying the estate tax immediately”. However, he also said the Marcoses could not be charged with tax fraud for non-payment – though any government tax official who neglected to collect the tax could be jailed for up to 10 years.
This is not the first time Marcos Jnr’s tax affairs have proved controversial. He was convicted in 1995 for failing to file income tax returns for four years while he was governor of Ilocos Norte province and for failing to pay enough tax. In a twist of irony it had been his father who in 1977 had made the non-filing of tax returns a crime.
On that occasion, Marcos Jnr had avoided jail only because some of the taxes he owed had been automatically deducted.
Marcos’ political opponents have cited his tax convictions and failure to pay the estate dues in demands for the Commission on Elections to disqualify him from standing in the presidential poll. The commission has refused those requests but its rulings are subject to appeal.
Rowena Guanzon, who recently retired from the commission, has urged Filipinos not to vote for “a tax evader”.
The Marcos camp continues to vigorously deny tax evasion.
