Pacquiao fight earnings shouldn't be taxed: Recto

Posted at 03/15/12 12:25 PM

Says Pacquiao similar to OFWs

MANILA, Philippines – The Bureau of Internal Revenue (BIR) should no longer tax Sarangani Rep. Manny Pacquiao of his earnings from his fights in the United States as he already paid taxes with the US Internal Revenue Service (IRS), Sen. Ralph Recto said Thursday.

"OFW (overseas Filipino workers) earnings which are derived from working abroad are not subject to a tax. I think the same principle should also apply to Pacquiao, who may not be a true-blue OFW, but is still our very own 'Overseas Fighting Worker,'" Recto said in a statement.

The senator said he was appalled on how Pacquiao is being treated here compared to the "respect and adulation" that the boxing champion enjoys before the global sporting community.

"Sila kaya sumubok magpagulpi sa ring. Bakit nila ginagawa ito sa kanya?" Recto said. "How much goodwill and pride has he given to the country? Manny deserves better treatment."

Recto added that the people running after Pacquiao would not be able to equal the amount of taxes the boxer has paid in recent years, which has made him one of the consistent top taxpayers.

"His income was not generated from here, and he has already paid his taxes in the US. That would be double taxation," the senator said.

Recto said the BIR can only run after Pacquiao’s earnings from commercial endorsements and other local income-generating activities.

BIR case

The BIR has sued Pacquiao for violating Article 266 of the National Internal Revenue Code, after the boxer repeatedly snubbed the agency's summons to present his tax recrods.

Through the agency's regional director Rozil Lozares, the BIR issued a Letter of Authority to Pacquiao requiring him to submit documents to the agency regarding his earnings and corresponding tax payments.

The BIR's Letter of Authority is an official document that empowers a revenue officer to examine and scrutinize a taxpayer’s books of accounts and other accounting records, in order to determine the taxpayer's correct internal revenue tax liabilities.

Speaking to radio dzMM, Henares said Pacquiao's tax payments dropped from over P100 million in 2008 to only P7 million in 2009.

"We haven't reached the point that he is evading taxes. We are asking him for copies of his contracts to different companies, which he has not given or has refused to give," she said.

The BIR wants to investigate 33 tax records, including Pacquiao’s annual income tax return in 2010, his book of accounts, list of assets, as well as his earnings from his fights against Antonio Margarito and Joshua Clottey.

The agency also asked Pacquiao to produce 29 copies of his contracts for endorsements, including endorsements with Ricoa, Pagcor, and PLDT.

But Pacquiao has denied any wrongdoing, saying, "Wala naman tayong tinatago. Lahat ng dapat bayaran, binabayaran natin."

The boxing champion faces a fine of up to P10,000 as well as two years in jail if convicted.

Pacquiao will return to the ring on June 9 in Las Vegas against undefeated American boxer Timothy Bradley, Jr.

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