Taxpayers’ Obligations in Light of the Comelec Decision
By Euney Marie Mata-Perez on February 17, 2022
The decision by the Commission on Elections’ (Comelec) First Division to junk a disqualification case against presidential candidate Ferdinand “Bongbong” Marcos Jr. recently set social media abuzz.
A statement in the decision, penned by Comelec Commissioner Aimee Ferolino, spurred numerous discussions and various interpretations. We will refrain from commenting on the merits of or discussing our views on the decision to avoid any violation of the sub judice rule. Instead, we would like to remind taxpayers that they should not rely on the Comelec decision or any statement therein in determining and complying with their tax obligations.
It should be stressed that the case before the Comelec is a disqualification case, not a tax case. The Comelec commissioners thus applied the rules and standards relevant to the issue of disqualification. It just so happens that a previous tax case involving the candidate was put forth as the possible basis for disqualification.
The First Division had to evaluate the provisions of the 1977 National Internal Revenue Code, which was effective during the years involved in the tax case. Said case was appealed to the Court of Appeals and docketed as CA-G.R. CR 18569.
The first issue is whether the penalty of perpetual disqualification, provided under Section 252 of the 1977 Tax Code, was deemed imposed on Marcos Jr. when he was found guilty of the non-filing of income tax returns and required to pay deficiency taxes for the years 1981 to 1984.
The second issue is whether the candidate would be disqualified under Section 12 of the Omnibus Election Code (Batas Pambansa 881), which provides that any person who has been declared by a competent authority to be insane or incompetent, or has been sentenced by final judgment for subversion, insurrection, rebellion or any offense for which he has been sentenced to a penalty of more than 18 months, or for a crime involving moral turpitude is disqualified from being a candidate and holding any office unless given plenary pardon or granted amnesty.
The First Division had to determine if the conviction of the candidate in the CA case was tantamount to a conviction of a crime involving moral turpitude under Section 12 of the Omnibus Election Code. In the case of Ty-Delgado vs House of Representative Electoral Tribunal (GR 219603, Jan. 26, 2016), “moral turpitude” was defined as everything done contrary to justice, modesty, or good morals; an act of baseness, vileness or depravity in the private and social duties which a man owes his fellowmen, or to society in general.
Ultimately, whether moral turpitude exists is based on the facts or circumstances of each case. The First Division had to evaluate the facts of the tax case involving Marcos Jr. against standards set out by jurisprudence. The Supreme Court may eventually have to make a determination and render a decision in this case.
Accordingly, any statement in the Comelec decision regarding the nature of the taxpayer’s filing obligations should not be relied upon by taxpayers in determining their tax obligations. Under the present Tax Code (“1997 Tax Code” or Republic Act 8424), a taxpayer could be subjected to penalties if he does not file his tax returns and is not exempted from making such filing. More so, if he does not pay his taxes on time.
As the Tax Management Association of the Philippines stated in its position paper, there is a statement circulating in various media quoting an excerpt of the resolution of the First Division of the Comelec on the disqualification cases against a presidential candidate, stating that “… the failure to file tax return is not inherently wrong in the absence of a law punishing it.”
“In line with its purpose to promote taxpayer education, the Tax Management Association of the Philippines would like to clarify that, under the current rules, the applicable provision is Section 255 of the National Internal Revenue Code of 1997, as amended. Based on said provision, any person required to file tax returns but willfully fails to do so, shall, upon conviction, be punished by a fine of not less than P10,000 and imprisonment of not less than one year but not more than ten (10) years, in addition to other penalties provided by law. Thus, all taxpayers, except those exempted by law from filing tax returns such as those earning purely compensation income qualified for substituted filing, are enjoined to faithfully comply with their tax filing obligations.”
Hence, in view of the foregoing, taxpayers should not rely on any statement in the Comelec decision and assume that they need not file their tax returns or pay their taxes. Taxpayers are expected to comply with their tax obligations, since taxes are the lifeblood of the nation and through which the government continues to function.
Euney Marie J. Mata-Perez is a CPA-lawyer and the managing partner of Mata-Perez, Tamayo and Francisco (MTF Counsel). She is a corporate, M&A and tax lawyer and has been ranked as one of the top 100 lawyers of the Philippines by Asia Business Law Journal.