MANILA, Philippines — The Bureau of Internal Revenue expects its American counterpart — the Internal Revenue Service — to help find any assets that Janet Lim Napoles and her family may have in the United States.
BIR Commissioner Kim Henares confirmed, on Thursday, reports that the tax bureau has sought the assistance of the IRS, and she expressed confidence the latter would give a favorable response given the existence of a tax treaty between the Philippines and the United States.
Henares said that under the tax treaty of the Philippines with the United States, as well as with many other countries, each of the two parties could seek the assistance of the other in pursuing people guilty or suspected of tax evasion.
Member-countries of the influential and international group Organization for Economic Cooperation and Development (OECD), to which the Philippines and the Unites States are members, are expected to help out in efforts to catch tax evaders and money launderers, according to Henares.
“Cooperation [between internal revenue agencies of member-countries] is a common practice. Non-cooperative countries may be subjected to blacklisting by the OECD,” she said in a phone interview.
“So, yes we [the BIR] have asked assistance of the IRS. In return, we should also help them in case they need information from the Philippines on tax matters,” Henares also said.
The BIR thought of seeking help from the IRS amid reports the Napoles family may have assets in the United States, either legally or illegally acquired, for which taxes have not been paid.
Under the country’s Tax Code, even ill-gotten wealth and income from illegitimate sources are covered by taxes, according to Henares.
Last September 26, the BIR filed tax evasion cases against Janet Lim Napoles and her husband Jaime Garcia Napoles before the Department of Justice.
The BIR has said that Janet has P44.68 million while Jaime has P16.43 million in unpaid tax liabilities for 2004 to 2012. The tax liabilities were computed based on assets of the couple that the BIR found through investigation.
But Henares said the amounts of tax liabilities of the Napoles couple would increase should the BIR locate more assets and incomes for which taxes were not paid.
“The assessment of their unpaid tax liabilities will keep on growing as we [the BIR] get more evidence,” the official said.
Henares said the BIR has begun investigating assets of non-government organizations reportedly owned by the Napoleses.
“Yes, the BIR is now looking into these Napoles’ owned NGOs cited in the report by the COA [Commission on Audit],” Henares said.
The NGOs owned by Janet Lim Napoles were said to have been used in the P10-billion pork barrel scam. In particular, whistle-blowers said, pork barrel funds given to legislators were reported to have been used to fund projects of the NGOs when in fact, the projects were non-existent.
The pork barrel funds were said to have been diverted to the pockets of the legislators and Napoles.
Henares said the BIR would specifically investigate the contracts and deals entered into by these NGOs with the aim of determining the incomes they derived over the years as well as the corresponding taxes that may not have been paid.
Henares told this to the Philippine Daily Inquirer immediately after the BIR filed on Thursday a separate tax evasion case against the daughter of the Napoles couple — Jeane Catherine Lim Napoles.
A BIR statement bares that Jeane Napoles has P32.06 million in unpaid tax liabilities covering the years 2011 and 2012.
The BIR said its investigations revealed that she acquired and registered in her name real properties during 2011 and 2012. However, the BIR said, she did not file income tax returns for both years.
The properties included a condominium unit in Los Angeles, California, in the United States with an estimated value of P54.73 million and a P1.49-million worth of share in a real property in Pangasinan province.
The BIR said it used the expenditure method in determining the unpaid tax liabilities.
Under the said method, any amount of expenditure in excess of reported income and that is unexplained is considered to be the amount of unreported income.
The amount of unreported income and the value assets are used as basis for determining unpaid tax liabilities.