Tax lien on Pacquiao assets stays, court rules

The tax lien on the properties of Sen. Manny Pacquiao and his wife Jinkee stays.

This after the Court of Tax Appeals (CTA) put on hold its resolution of Pacquiao’s bid to have the tax liens lifted, until the preliminary hearing into the main tax case shall have been terminated.

“Petitioner’s motion to lift notices of tax lien annotated on properties registered in the name of petitioners is held in abeyance until the termination of the preliminary hearing,” the tax court said.

A tax lien attaches for as long as the deficiency taxes as well as interest and surcharges have not been paid. The Bureau of Internal Revenue (BIR) issues a notice of tax lien to protect the interest of the government as stated under the Tax Code.

Per the BIR, Pacquiao’s original tax liability was P2.26 billion but this has since gone up to P3.29 billion due to surcharges and penalties.

Pacquiao is a world champion boxer and has earned billions of pesos in the ring. He fights in the United States, which taxes his purses.

Aside from the local tax liens, the BIR also issued a warrant of distraint and levy and garnishment order against the senator’s assets to cover the tax liability.

The CTA did not implement the order but required the senator to pay either a P3.2-billion cash bond or a P4.9-billion surety bond, which Pacquiao questioned in the Supreme Court.

Pacquiao told the high tribunal that his and his wife’s right to due process was violated when the BIR proceeded with the tax collection process without serving them with a Final Decision on Disputed Assessment (FDDA).

An FDDA gives a taxpayer an opportunity to question the BIR’s final decision.

The senator said the BIR had yet to present proof that they committed tax fraud from 1995 to 2009.

The Supreme Court ruled in favor of Pacquiao and ordered the tax court to recompute the bond or determine if it could be waived.