Lucio Co and Puregold; 2 SC justices tagged 9th richest man in PH as smuggler - The Manila Times OnlineThe Manila Times Online

See - 2 SC justices tagged 9th richest man in PH as smuggler - The Manila Times OnlineThe Manila Times Online



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Two Justices of the Supreme Court (SC) have tagged Lucio Co’s Puregold Duty Free Inc. (Puregold) of supposedly smuggling alcohol and tobacco products to evade tax liabilities amounting to P2.78 billion from January 1998 to May 2004.



“If this is not smuggling, I do not know what it is,” Associate Justice Martin Villarama, Jr. said in his separate dissenting opinion on the case which was joined by Associate Justice Jose C. Mendoza.


Villarama lambasted the 17-page majority ruling written by Associate Justice Presbitero J. Velasco Jr. dismissing the appeal of the Bureau of Internal Revenue (BIR) and affirmed the Court of Tax Appeals’ (CTA) decision clearing Puregold of tax liabilities.


He even suggested that the case against the business tycoon must be elevated to the SC en banc and not just the SC Third Division which voted 3-2 in favor of Co.


Villarama also wanted the case to be referred to the SC en banc since the case has huge impact in the economy.


“Should any motion for reconsideration be filed, the same be referred to the Banc as the subject matter herein may have a huge financial impact on businesses thus affecting the country’s welfare,” he said.


Co, along with his wife Susan ranked as the ninth richest man in the Philippines, according to the Forbes Magazine with net worth of US$ 2.3 billion and ranked no. 810 in the world.


The SC Third Division led by Velasco denied the petition filed by the BIR seeking the reversal of the May 19, 2012 and July 18, 2012 decision and resolution issued by the CTA, respectively.


Puregold operates in-store under the authority and jurisdiction of the Clark Development Corporation (CDC) and the Clark Special Economic Zone (CSEZ) and engaged in the sale of various consumer goods within CSEZ.


In its previous decisions, the CTA ruled that Puregold is entitled to, and properly availed of, the tax amnesty under Republic Act No. 9399, or an “Act Declaring a Onetime Amnesty on Certain Tax and Duty Liabilities, Inclusive of Fees, Fines, Penalties, Interest and Other Additions, Incurred by Certain Business Enterprises Operating Within the Special Economic Zones and Free Ports.”


BIR Commissioner Kim Jacinto-Henares went to the SC when the CTA ruled against them.


However, in affirming the CTA ruling, the SC in its June 22, 2015 ruling, dismissed Henares’ argument that under Section 131 (a) of the 1997 National Internal Revenue Code (NIRC), only importations of distilled spirits, wines and cigarettes to the free ports, among others, are exempt from payment of value added tax (VAT) and excise taxes.


Concurring with the Velasco ruling were Associate Justices Diosdado M. Peralta and Bienvenido L. Reyes while Associate Justice Jose C. Mendoza dissented with Villarama.


According to Villarama, “the grant of a tax amnesty, similar to a tax exemption, must be construed strictly against the taxpayer and liberally in favor of the taxing authority.”


“Taxes being the lifeblood of the nation through which the government agencies continue to operate and with which the State effects its functions for the welfare of its constituents, the present amnesty tax law must be strictly construed against herein respondent which claims tax incentives granted to it by mere presidential proclamation,” Villarama said.


“It is likewise settled that taxes are the lifeblood of the government and their prompt and certain availability is an imperious need,” he added.


In his dissent, Villarama said that “Puregold Duty Free, Inc. be ordered to pay P2,780,610,174.51 deficiency VAT and excise taxes inclusive of surcharge and interest, plus 20% deficiency interest computed from June 23, 2008 until full payment thereof pursuant to Section 249 (C) of the 1997 National Internal Revenue Code, as amended.” PNA

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