SC issues injunction stopping CTA from collecting P3.2B cash bond from Pacquiao

BAGUIO CITY—The Supreme Court has stopped the Court of Tax Appeals from requiring boxing champ Manny Pacquiao and his wife Jinkee to post a P3.2-billion cash bond or a P4.9-billion surety bond in connection with the P3.2-billion tax evasion case filed against them.

In its last summer session for the year, the SC partially granted a petition from the Pacquiao couple and issued a writ of preliminary injunction against an April 22, 2014 and July 11, 2014 ruling of the CTA requiring them to post the cash or surety bond.

"The writ shall remain in effect until the issues aforementioned are settled in a preliminary hearing to be conducted by the Court of Tax Appeals, First Division," said the high court.

The SC ordered the case to be remanded to the CTA First Division, which was ordered to conduct a preliminary hearing to determine whether the dispensation or reduction of the required cash deposit or bond provided under Section 11, Republic Act 1125 is proper to restrain the collection of deficiency taxes.

"If required, the CTA, First Division, shall proceed to compute the amount of the bond in accordance with the guidelines aforestated, particularly the provisions of Administrative Matter No. 15-02-01-CTA," the SC said.

"It should also take into account the amounts already paid by the petitioners," the high court added.

The SC ordered the CTA to proceed with the hearings and resolve the petition for review pending before it, after the tax court has determined whether or not the Pacquiao couple are required to post the required bond.

Prior to the preliminary injunction, the SC had already issued a temporary restraining order stopping the CTA from requiring the Pacquiao couple from posting cash or surety bond.

The BIR had earlier filed a tax case against the boxing champ, who is also the Sarangani representative, after assessing that Pacquiao had incurred "deficiency income and value-added tax" from 2008 to 2009, worth P2.2 billion.

Penalties and surcharges caused the deficiency to balloon to P3.2 billion.

On August 1, 2013, Pacquiao filed a "Petition for Review for the reduction of, and the return of any excess, filing fees assessed and paid in the instant case, for lack of merit."

The Pacquiao spouses then filed on October 18 an "Urgent Motion to Lift Warrants of Distraint and Levy and Garnishment and for the Issuance of an Order to Suspend the Collection of Tax (With Prayer for the Issuance of A Temporary Restraining Order)."

In April 2014, the CTA told the BIR to left the garnishment on Pacquiao's assets.

However, the tax court also ordered the Pacquiao couple to deposit a cash bond worth over P3.2 billion or file a P4.9-billion surety bond to cover their tax deficiencies.

The Pacquiaos sought partial reconsideration from the CTA by asking that the bond be reduced, but the tax court refused to heed their plea, prompting Pacquiao to elevate the matter to the SC. —NB, GMA News