Tax court affirms junking of BIR’s P2.9-B case against Erap, Loi

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Manila Mayor Joseph Estrada responds to an ambush interview in Interaksyon file photo.

MANILA – The Court of Tax Appeals en banc has thrown out the case filed by the Bureau of Internal Revenue against former president now Manila mayor Joseph Estrada and his wife Loi in connection with an alleged P2.9-billion income tax deficiency.

Estrada and Loi, a former senator, were accused by BIR of not paying taxes on a combo account in the then Equitable PCI Bank. The account was known as the “Jose Velarde Account” which businessman Jaime Dichavez had claimed as his, but which government prosecutors at Estrada’s aborted impeachment trial insisted was a dummy account of the then president.

In throwing out BIR’s case against the couple, the CTA en banc upheld an earlier (November 2015) decision of the CTA Second Division.

The CTA en banc ruled as void and with no legal effect the tax assessment issued by the BIR against the Estradas.

The CTA en banc said the BIR violated the Estradas’ right to due process.

The tax assessment slapped by the BIR on the Estrada was based merely on the Sandiganbayan ruling that convicted the former president of plunder.

BIR failed to submit to CTA a copy of the Sandiganbayan decision in the plunder case.

The tax agency also failed to conduct a separate tax audit; thus, there is no basis for saying the couple did not declare the income on which tha taxes should have been based, the court said.