Former SSS execs Cunanan, Neri face tax evasion raps

(Updated 10:15 p.m.) The Bureau of Internal Revenue has filed separate tax evasion complaints against former Social Security System president Romulo Neri and SSS chairman Thelmo Cunanan for supposedly failing to declare their full income and to pay the proper amount of income taxes in the past years. In the complaints lodged before the Department of Justice on Thursday, the BIR said Neri and Cunanan failed to declare the income they earned as board members of Philex Mining Corp. and Unionbank of the Philippines. Neri and Cunanan were able to sit as directors in those publicly listed companies because SSS, the pension fund for private sector employees, owns shares of stock in those companies. BIR Commissioner Kim Jacinto-Henares said the bureau's investigation was triggered by the Senate finance committee's inquiry into the so-called excessive bonuses and perks of officials in government-owned and controlled corporations (GOCCs). The BIR said Neri earned P11.3 million in 2008 and P34.2 million in 2009. However, Neri allegedly did not declare fully his income, resulting in a tax deficiency of P6.2 million for 2008 and P11.9 million for 2009. The BIR is now requiring Neri to pay P18.2 million in aggregate tax liabilities, which include surcharges and interest.
Cunanan 'concealed true income' The BIR also alleged that Cunanan "concealed his true income by his deliberate and willful failure to file his income tax returns for taxable years 2005 to 2007." The bureau's investigation showed Cunanan earned around P71 million for the said three years in his capacity as SSS chairman and member of the board of directors of Philex, Unionbank, First Philippine Holdings Corp., and Belle Corporation. However, he supposedly did not declare the perks and bonuses he received from the GOCCs. Thus, the BIR is now requiring the former military general to pay P42 million in aggregate tax liabilities, which include surcharges and interests. Neri, Cunanan: Incomes properly declared Both Neri and Cunanan, however, denied BIR’s allegations that they failed to pay their tax liabilities stemming from their perks and bonuses as former GOCC board members, and insisted that they properly declared their respective incomes in the past two years. Neri said in a radio interview that he immediately went to Henares’ office upon hearing of the complaints to explain the “discrepancies" between his records and BIR’s files. “I only received my profit sharing of 2008, na nag-reflect sa (which was reflected in) 2009. At yung 2009 ngayon lang 2010 ko na-receive kaya yun ang dineclare ko (And I received my share for 2009 only this year 2010, so that’s what I declared) on my income tax return," he said in an interview over radio dzMM on Thursday. "Naka-declare lahat (All the income was declared)," Neri emphasized. "Tama ang mga records namin. I showed it pa nga in the Senate hearing. Kaya hindi ko alam kung saan nakuha iyon ng BIR. Ayaw ipakita ng BIR kung saan nang kung saan nanggaling ang mga figures nila. Sabi ko nga, 'Show it to me' para malaman kung saan ang differences namin," said Neri. (Our records are correct. I even showed these in the Senate hearing. That is why I don't know where the BIR got its information. It does not want to show where it got its figures. So I said, "Show it to me" so that I know where our differences are.) Neri likewise said he knows that the BIR “is only doing its job," but admitted that he felt the agency’s move was “unfair." “Sabi ko kina Kim Henares at sa mga tauhan nya, unfair naman ang ginawa nila. Dinala agad sa DOJ," he said. (I told Kim Henares and her people, what they did was unfair. They immediately brought it to the DOJ.) “[I wish] they gave me a chance to explain my records and to compare. [There was no] due process," Neri added. Cunanan, for his part, also said he properly declared all his earnings in 2008 and 2009. “In truth and in fact, I faithfully filed my ITRs [income tax returns] for those years, together with W-2 issued by the companies," he said in a reaction aired over GMA News’ “24 Oras" on Thursday night. Cunanan is currently undergoing cancer treatment in China. Drilon lauds raps vs ex-SSS execs Meanwhile, Senator Franklin Drilon on Thursday lauded the BIR move to file against Neri and Cunanan. “As we have said before and beyond the abuses that we have seen in public enterprises, there should be criminal liabilities on the part of the SSS officials who exercised their stock option by sitting in the boards of private companies," Drilon said in a statement released Thursday. The so-called excessive perks and bonuses received by GOCC officials were recently the subject of an inquiry by the Senate finance committee. Drilon, chairman of the committee, had urged SSS officials to recover the money received by Neri, Cunanan, and SSS legal consultant Sergio Apostol while they were on the board of directors of Philex, Unionbank, and First Philippine Holdings. Citing data from several private companies last July, he said Cunanan received P132.6 million in per diems and bonuses, profit sharing and stock options, and other bonuses as the SSS representative to the board of Philex, Unionbank, and First Holdings from 2007 to 2010. Neri likewise received P44.2 million — P36.9 million were bonuses — while he was board member of Philex and Unionbank from 2008 to 2010. Apostol got P25.1 million including P23.4 million in bonuses from 2008 to 2010. Drilon then asked the present SSS leadership to "institute measures to recover these payments given to their previous SSS commissioners." “Even if they argued that they used their own money in exercising their stock option, the money that they received from it should have pertained to the pension fund that they represent," said Drilon. “These are trust funds that do not belong to themselves and to the government, but to the workers. It is the fiduciary obligation of the commissioners of SSS to protect the trust fund and not appropriate for themselves huge amounts of money in the form of obscene allowances," he added. On Thursday, BIR chief Henares said the bureau is also checking whether other GOCC officials declared their incomes, perks and bonuses properly. "We are looking at other officials whether they have declared the right income," she said. SSS also has shares in Philippine Long Distance Telephone Co., Security Bank and Trust Co., Metropolitan Bank and Trust Co., Energy Development Corp., Globe Telecom, Inc., and Ayala Corp., aside from Philex and Unionbank. —With Andreo C. Calonzo and Kimberly Jane T. Tan/LBG/RSJ/JV, GMANews.TV