Swiss deposits part of Marcos estate
Retired Supreme Court justice Antonio Carpio has made several big lies in his discussions over our South China Sea claims, many of which are being repeated even by otherwise intelligent people.
Now in the homestretch to the May elections, he’s created another Big Lie: presidential candidate Ferdinand Marcos Jr. owes government P203 billion in estate or inheritance taxes. Carpio is hoping this Big Lie can stop Marcos from winning the presidency 31 days from now.
It’s a classic case of a Big Lie which an unscrupulous politician spreads for his electoral ambitions and which biased, or plain stupid media disseminates. The gullible candidate Isko Moreno has gone on to say silly things, such as that the “P203 billion” will feed 59 million Filipinos for a year. He has practically made it his platform of government, that if he wins the presidency, he will make it his priority to collect those unpaid estate taxes.
The forever anti-Marcos Philippine Daily Inquirer jumped on the fake issue, claiming in an editorial that the BIR isn’t doing its job if it doesn’t collect the P203 billion. That paper got that idea from Carpio who said: “What is the BIR waiting for? “
I find it astonishing that he forgets that when that tax deficiency was first issued in 1991 and when the Supreme Court allegedly made it “final and unappealable” in a decision in 1997, the administration in power was that of Fidel Ramos, in which Carpio was one of the most powerful Cabinet members, being the presidential legal counsel. He recommended for Bureau of Internal Revenue head Liwayway Vinzons-Chato, a colleague in the law profession. Why couldn’t they get the “tax” paid?
No P203 billion
The Philippine Star even ran a story headlined, “BIR confirms demanding P203.8 billion in taxes from Marcos.” Its source? The chairman of Moreno’s party. However, BIR Commissioner Cesar Dulay told me yesterday: “I merely issued the same tax deficiency assessment the BIR has been issuing through four administrations. I did not, repeat I did not, demand [from] the Marcos estate P203 billion.
“That P203 billion calculation is solely Carpio’s,” Dulay said. “He simplistically computed that if the 1991 tax deficiency was P23.3 billion, and that if it is unpaid, the huge interest and penalties would require the estate to pay a total of P203 billion. That is, the P203 billion is purely from Carpio’s mind.”
The two bolts of lightning, as it were, that would instantly reveal the true nature of Carpio’s Big Lie are the following facts:
First, the Supreme Court’s June 5, 1997 (GR 120880) ruling reads:
“On February 22, 1993, the BIR Commissioner issued twenty-two notices of levy on real property against certain parcels of land owned by the Marcoses — to satisfy the alleged estate tax and deficiency income taxes of Spouses Marcos. On May 20, 1993, four more Notices of Levy on real property were issued for the purpose of satisfying the deficiency income taxes. On May 26, 1993, additional four notices of Levy on real property were again issued.”
I read “satisfy” and “satisfying” the alleged deficiency inheritance tax, not “partially satisfy” or “partially satisfying” it. If the tax deficiency has been “satisfied,” i.e., paid, why has the BIR kept sending notices to the Marcos estate about its alleged tax deficiency? Important to debunk that “P203 billion” fiction, this payment through the confiscation of 26 lands automatically suspends any interest and penalty charges — if there is still anything to be paid.
Ironically, it is this Supreme Court ruling of 1997 that Carpio, the gullible candidate and the anti-Marcos gang have been invoking to claim that the BIR”s tax deficiency claim is “final and executory.”
Second, the alleged Marcos properties on whose total value the BIR in 1991 computed that P23.3 billion must be paid in “inheritance tax” included many of the assets the Presidential Commission on Good Government had sequestered, which therefore had been in the state’s custody, and therefore could not be part of the Marcos estate.
These PCGG-sequestered assets and companies were either returned back to their real owners after decades of litigation (as in the case of Edgardo Cojuangco’s shares in San Miguel Corp.), surrendered to government (as in the case of drug-tycoon J.Y. Campos’ properties), or which the Sandiganbayan has not ruled to be ill-gotten wealth.
The current PCGG in its March 11, 2022 letter to the chairman of Moreno’s party explained that the BIR and the PCGG back in 2003 had reached an agreement to exclude in the enforcement of the 1991 inheritance tax assessment the alleged Marcos properties which are “sequestered or subject of a recovery case by the PCGG and the Swiss funds under escrow [with] the Philippine National Bank.” (Italics by the author.)
The PCGG explained firstly that pending resolution of the sequestration cases, such assets and properties cannot be made part of the Marcos estate, on which therefore estate taxes cannot be levied.
Secondly, “by having sequestered/sued them, the government had laid claim on them (and are in custodial legis) and should government’s claims be finally upheld by the courts, the BIR would have in effect satisfied the tax claim of the government with properties of the government itself instead of properties of the delinquent taxpayers.”
Some 19 years after the PCGG and the BIR had agreed to that chore, they haven’t done so. Or have they, but found it embarrassing? Either the Marcos estate owes nothing, or it owns expensive properties it would jump to pay the inheritance tax on.
The PCGG letter is extremely revealing: It is the first time that it is reported that the Marcos Swiss bank deposits were included in the Marcos properties that were made subject to the P23 billion inheritance taxes.
My sources in the BIR also confirmed that many, if not all of the properties that the PCGG had sequestered starting in 1986, such as San Miguel Corp. shares, PLDT shares, Philcomsat, the Manila Bulletin and over 400 lots owned by personalities close to Marcos such as Roberto S. Benedicto and the late Juanito Remulla were listed by the BIR as the properties Marcos left when he died in 1989.
Swiss bank funds
The value of these sequestered properties plus the Swiss-bank funds ($676 million in 1991 equivalent to P20 billion at that time) would be roughly P120 billion, and the estate taxes on them, if they were to be transferred to his heirs would have been P24 billion — precisely the inheritance tax deficiency the BIR has been issuing to the Marcoses since 1991 up to the December last year.
Carpio, in his rush to concoct a Big Lie to stop Marcos from winning the presidency a month from now, has stumbled on something that reveals the ruthlessness of the Aquino forces and its stunning ineptitude.
The estate tax assessment issued in 1991 was the Cory regime’s plot to ensure that the strongman’s death in 1989 would also mean his total political extinction, since his heirs would not have afforded the P23 billion assessment on his properties which therefore could not be transferred to them.
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.
If that happened, the Cory officials claimed, the Marcoses would still not have access to their father’s 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 — how could the Marcoses pay inheritance taxes on an asset sequestered by government or, as in the case of the Swiss bank deposits, on monies confiscated by government — succeeding BIR commissioners under five presidents merely went to the motion of sending the tax deficiency letters (as failure to do so risks charges of technical corruption) knowing that these are absurd — legally a “dead letter” that can’t be implemented.
Yet it would be a Big Liar who would see it could be used as a propaganda weapon against a frontrunner in a presidential election, thus probably earning him his retainer.
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