The Department of Justice has recommended the filing of a tax evasion case against former Armed Forces of the Philippines comptroller Carlos F. Garcia and his wife, Clarita Garcia.
In a 14-page resolution, Senior State Prosecutor Miguel Gudio Jr. found probable cause to indict the Garcia couple for tax evasion. DOJ Prosecutor General Claro Arellano has also approved the resolution.
"It is respectfully recommended that respondents Carlos F. Garcia and Clarita D. Garcia be indicted for the crime of tax evasion, as defined and penalized under Sections 254 and 255 of the National Internal Revenue Code of 1997, as amended, and that the corresponding information(s) be filed against them in the proper court," said the resolution dated Dec. 23, 2010.
The resolution further held that documents presented by the Bureau of Internal Revenue (BIR) are admissible, and "have sufficiently established that probable cause exists to indict respondents-spouses [the Garcia couple] for the crime of tax evasion."
Garcia is facing a separate plunder case at the Sandiganbayan for allegedly amassing more than P300 million during his stint as AFP comptroller. However, he was given temporary liberty on a P60,000 bail after pleading guilty to the lighter offense of direct bribery, in a plea bargain deal that Macalañang itself questioned.
The BIR has alleged that the Garcia couple has a total tax deficiency of about P7.4 million for 2002 and more than P8 million for 2003.
This stems from the couple's allegedly having under-declared their income amounting to P12.2 million for 2002, and P14.1 million for 2003.
BIR complaint
The BIR complaint said that Garcia's income tax return for 2002 and Statement of Assets and Liabilities for 2003 showed that the former AFP general's primary source of income was from "salaries, wages, allowances, and director's fees from the Armed Forces of the Philippines Savings and Loan Association, Inc. (AFPSLAI)."
The BIR said Garcia received P965,708.47 for 2002, and more than P1.13 million for 2003.
"However, records obtained from the Sandiganbayan, the Office of the Ombudsman, and the Securities and Exchange Commission disclosed that he and his spouse [Clarita], had various financial transactions for the same periods as hereunder shown," the DOJ resolution quoted the BIR as saying.
The resolution then proceeded to enumerate the alleged illegal transactions made by the Garcia couple.
Quoting the BIR, the DOJ resolution said the Garcias "attempted to hide their actual or true income by failing to report or include the... transactions in the 2002 income tax return filed by respondent Carlos F. Garcia."
The BIR said these came about even if Section 51[D] of the National Internal Revenue Code of 1997 mandated "married individuals to file their income tax returns which should reflect the income of both spouses even if one of them has no visible source of income as in the case of respondent Clarita D. Garcia."
The BIR also said that under Section 248[B] of the National Internal Revenue Code, an under-declaration of income by 30 percent already constitutes a prima facie (“on its face," or strong) proof that tax evasion was committed.
For the year 2003, the BIR noted that Garcia's SALN indicated he received a P1.13 million income "but investigation conducted by the [BIR] team shows he grossly under-declared his and his spouse's income since it was uncovered that they made" at least three investments that they failed to report.
"In sum, for their failure to report the foregoing investments and/or transactions and to pay the taxes due thereon, herein respondents-spouses are liable for tax evasion under Sections 254, 255, and 257" of the National Internal Revenue Code, the resolution said.
2005 complaint
The BIR had filed with the DOJ a tax evasion complaint against the Garcia couple as early as 2005, but the matter has only been tabled up for resolution by end-2010.
De Lima had earlier said she will ask the DOJ prosecutor handling the complaint why it took him five years to resolve the matter. "I'm actually surprised why that case has not been resolved yet," she had noted.—JV/RSJ
