THE P203 billion which presidential candidate Isko Moreno Domagoso and retired justice Antonio Carpio have been alleging are “unpaid estate taxes” the Marcoses owe government will go down in our political and media history as one of the most preposterous lies to have ever been given some attention. Thanks of course again to the virulent anti-Marcos Philippine Daily Inquirer and Rappler — the only two media outfits that’ve been screaming over it.
This “estate tax” brouhaha was concocted in a desperate move to breathe some life into candidate Moreno’s dying campaign; he has gone to town to disseminate that cock and bull story. However, by spreading the lie, Moreno has definitively demonstrated he is totally unfit to be president: he is either so gullible to believe the yarn invented by the ever-scheming Carpio or so unprincipled to spread something he himself knows is a fallacy.
That this is a colossal fabrication is easily gleaned from the fact that among the alleged Marcos assets on which the estate taxes were levied include stocks in San Miguel Corp. and Manila Bulletin, and shares of the late drug tycoon J.Y. Campos as well as such properties as Fort Ilocandia, the Coconut Palace, and the sugar lands of Roberto S. Benedicto in Negros. Why on earth would the Marcoses pay estate taxes on these?
Yes, Mr. Dumb candidate, these “unpaid estate taxes” include assets which the Presidential Commission on Good Government (PCGG) had sequestered in the 1980s. Many of these were ordered by the courts to be returned to their owners (in the San Miguel case, to Edgardo Cojuangco), or which the owner had surrendered to government, which then auctioned shares sold many decades ago.
As the current PCGG clarified on March 22 when Moreno’s party asked about this “unpaid estate taxes”: When the Cory government sequestered these assets, it “legally laid claim to them [and are in custodial legis],” and therefore beyond the Marcos rights over and liabilities arising from them. Even if the Marcoses wanted to pay the alleged estate taxes, their being in government’s custodial legis bars them from doing so.
The PCGG also disclosed in its letter that there was a “verbal agreement” in 2003 between it and the BIR to determine which among the properties the latter wanted to levy estate taxes on were sequestered and which were not. The PCGG and the BIR never got around to doing that chore, understandably as there were 300 lots and over 200 companies/shares in corporations the latter had levied estate taxes on.
I would think no matter how dumb you are, you have to understand that “estate taxes” are different from “real estate” taxes. Indeed, much of the traction of this preposterous lie is because Domagoso and Carpio have exploited the fact that many people confuse real estate taxes (“amilyar” in Filipino) with estate taxes (no Filipino translation). To avoid such confusion, I will instead use the term inheritance tax instead of estate tax, which are synonymous under Philippine law.
You own a piece of land, and you don’t pay the taxes on these, called “real estate” taxes. You’ll be losing that lot when government garnishes it and sells it to pay for the amilyar. Contrast this to an estate tax. Your granduncle dies, you inherit his property (not necessarily real property but shares of stocks for example) which the BIR says is worth P10 million. But you don’t have the P2 million (20 percent of the property’s value) to pay the inheritance tax that needs to be paid on it for it to be transferred to you. Thanks but no thanks, you tell the BIR, shove it.
If Domagoso and Carpio are right in their reading of the Internal Revenue Code, I would have to warn my cousin who’s been living in Canada since the 1980s never to visit. He has an uncle who died five years ago here and he is the sole heir of his properties, but since he’s a tech millionaire there, he’s been too busy to come here to work on the papers to claim the property, and he doesn’t care about it. Some lawyer like Carpio may have asked the BIR to compute the inheritance tax and finding that he hasn’t paid for it, will ask a court to jail him, as Carpio demanded Marcos in his case. (With Domagaso’s obviously poor understanding of real estate taxes, the Manila government should check if the right property taxes were levied on his P1.4 billion sale of the Divisoria Market, reportedly to an obscure Tondo-based businessman.)
With this, it should be clear that Carpio’s P203 billion figure of unpaid inheritance taxes is totally a figment of his depraved mind. He imagined that the BIR had demanded payment of a P23 billion tax deficiency in 1990, which he computed, as a result of interest rates and penalties, amounts to P203 billion today.
He can’t admit in his mind that the P23 billion figure is entirely a hypothetical one, which the BIR claims the Marcoses would have to pay if those alleged assets are turned over to them. But the Marcoses have not acquired those assets at all, either because they are still sequestered, returned to their real legitimate owners (such as Cojuangco), or sold off. There may be assets that are in their control now, but the BIR had not informed them 35 years ago or today, how much inheritance taxes they should have paid on them.
Indeed, that the P23 billion figure is merely a hypothetical inheritance tax estimate is the reason why for 35 years since that assessment was issued, five BIR commissioners and five administrations (including two Yellow ones, Fidel Ramos and Benigno Aquino 3rd) had paid no attention to it. Only Carpio out to impress the gullible Domagoso has been a crackpot enough to raise this nonsensical issue.
This estate-taxes black propaganda pathetically intended to stop Marcos, Jr. from winning the May elections reminds us how ruthless the Cory regime was in its campaign to totally crush the Marcoses.
In its plot to ensure that the strongman’s death in September 1989 would also mean his total political extinction, which she thought would happen if his heirs were left with nothing, Aquino’s BIR scrambled to demand in June 1990 the payment of the inheritance taxes on the Marcos estate, which the BIR computed to be P23 billion, a figure deliberately concocted to be so big his heirs would not be able to afford this.
Whatever assets the strongman could have left to them as their inheritance would be confiscated for their failure to pay the inheritance taxes. How did BIR come up with that huge figure?
The maximum rate for the computation of estate taxes at that time was 20 percent of the value of the assets. To be sure that the estate taxes would be huge, and after all since it only had a small staff to sniff around what assets the strongman left, the BIR simply used the list of assets the PCGG had sequestered at that time, which the Cory regime had been using to create the myth of Marcos’ massive kleptocracy, bloated to include even properties of businessmen simply because they were known to be close to the strongman and his wife Imelda.
The BIR then used the figure the PCGG had been disseminating as the total value of strongman Marcos’ wealth when he died. Thus the 20 percent estate tax was calculated on the assumed value of the assets that the PCGG had ordered sequestered, which was P115 billion, or the ballpark figure for the “hundreds of billions” in Marcos’ alleged “ill-gotten wealth” the Cory regime had been bandying about. In its rush to demand an inheritance tax on Marcos’ properties, the BIR threw in every property it could think of which they heard from friends’ friends were allegedly owned by Marcos.
There was another motive for the Cory regime to require the P23 billion inheritance tax. It became worried its sequestration would be challenged in the courts, which could rule that such confiscations were illegal or that the PCGG could not prove that they were acquired through corruption. This in fact was what happened in so many cases, epitomized by the return of San Miguel and coconut-levy firms to Edgardo Cojuangco.
If that happened, Cory’s lawyers assured her, the Marcoses won’t have access to those assets on which the inheritance taxes were imposed, as they had not paid the P23 billion inheritance tax plus penalties.
It turned out though that that scheme was too stupid that no government lawyer had raised this issue to stop the lifting of a sequestration on a particular property. How could for instance Hacienda de Fuego which was in the BIR list, be shown to owe inheritance taxes when that list didn’t impute a value to it, with the total P23 billion figure being simply an “estimate” of the total value of the 500 assets.
What a waste of our time this issue which Domagoso raised has been.
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This Post Has 9 Comments
para saan yung kaso na file ni BBM laban sa computatation ng BIR at para pigilan ang ginagawang pag levy sa ilang lupain sa
Leyte..na natalo sa Court of Appeals at sa Supreme Court..Bobo din po ba mga huwes..at iniutos na rin ni Presidente sa BIR
na kolektahin na yang mga Estate Tax..Bobo din po ba sya..
Sana ma intindihan nyo, Magbibigay ako ng simpleng example, pag namatay ang magulang nyo may maiiwan na property so paghahatian ng heirs pero hindi nyo makukuha yan kung di kyo magbabayad ng estate, usually ang tax ay mababa ang value compara sa value ng property dahil dyan binabase ang percentage. Ngayon halimbawa di nababayaran ang estate tax i compiskasa ng govt. at isusubasta para doon kunin ang pambayad. Ang nangyari dito ang mga properting yan ay kinuha ng govt. thru the Executive Order no. 2 na inisyu ni Cory Aquino lahat ng real at personal property. Ito ay matagal binibenta ng BIR pero walang gustong bumili
There oughta be a law prohibiting retired Comelec commissioners and Supreme Court justices from participating in political commentaries and acts favoring/endorsing election candidates because such acts may cause the public to confirm its suspicions that the decisions of the former on cases involving politicians and political parties were biased. Such will also cast doubts on the decisions of sitting commissioners and justices.
If you were a Bar taker, would you believe Tiglao or Carpio? Anyway, this is a good read.
Oh my gosh..
Laziness is the game for 2nd class “journalists” to make assertions that “i will be responsible to pay taxes on someone else property when he dies”…
It is apalling the Atty. Carpio was even in our Supremem Court…
unbelievable, ONLY IN THE Philippines!
Ang state tax kung HND binabayaran ng tagapagmana HND PWD isalin sa pangalan nya. Pero PWD nila gamitin ng tagapagmana..naintindihan Nyo..
Sir Bobby, thanks for clarifying all issues against the Marcoses. And I learned more about the taxes. This might help me passing the Bar Exam hahaha. Keep the faith. We need a good Machiavelian leader for 12 years more.
I really can’t believe that many of our local and national officials, including some presidential aspirants, are ignorant of basic taxation laws. They should have conducted intelligent (if they are capable) research first before uttering mouthfuls or just kept their mouths shut and could have avoided the resulting humiliation and embarrassment. I am not a tax expert but at least I know the basics in this case. Carpio, Domagoso, Pacquiao, and the Pinklawans are like the proverbial blinds that pretend to lead the people who they think are also blind and dumb like them. They talk about taxes but are stupids on taxation, just like bragging upon seeing a tree and pretending to be an instant forester.
But you cannot claim a journalist who had just read the Tax Code becomes an expert in Taxation Laws. This is a mere commentary same with that of Retired Justice Carpio. Now, who is more credible in the interpretation of laws, a bar examinee who is a bar passer himself or a journalist acclaimed as a ‘Reader of the Tax Code’?
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