Roxas campaign jets got tax exemptions

Mar Roxas’ campaign jets are exempt from tens of millions of pesos in value-added tax, unlike others’ imported aircraft, records show.

Billionaire-pals who lend Roxas their jets wangled the tax breaks within just days of request. Yet his Daang Matuwid administration kept rejecting for years appeals to reduce even just a bit the 32-percent income tax rate on middle-earners.

Jets are subject to 12-percent VAT and one-percent import duty. But the government has exempted at least two of the eight aircraft at Roxas’ disposal.

The aircraft are traceable to Roxas’ financiers Francis Eric Gutierrez and Liberal Party Rep. Edgardo Erice. Aside from the two jets, the six other aircraft enjoy tax-free privilege, sources say.

Roxas, the LP president, is the administration’s standard-bearer and President Noynoy Aquino’s personal choice for successor.

Records show that a Cessna Caravan jet, valued at $2,335,275, was granted VAT exemption on Oct. 1, 2012, only ten days upon request on Sept. 21, 2012.

The foregone 12-percent VAT amounted to $280,233, or P14,011,650.

The application for VAT exclusion was from Miguel Alberto V. Gutierrez, vice president of Air Juan Aviation Inc. The company is known in the small general aviation business to be owned by Eric Gutierrez. It was incorporated only on Jan. 18, 2012, under SEC registration certificate No. CS-201200959.

Air Juan is a seaplane charter outfit with offices at Quadrant 1, Unit 2A01, Bonifacio High Street, Global City, Taguig. Currently under construction is its own medium-rise building on Domestic Airport Road, Pasay City.

The exemption was granted on very general grounds: “That said importation is necessary in the operation of its business.” No other aircraft importation or aviation firm was granted such privilege. “Legal but not moral,” an aviation industry source describes the transaction.

Signing the exemption on behalf of Finance Sec. Cesar Purisima was Carlo A. Carag, Undersecretary for Revenue Operations and Legal Affairs Group.

In granting the exemption, Carag noted that Air Juan had a Certificate of Public Conveyance and Necessity, as shown by the Annual Certificate of Registration from the Civil Aeronautics Board, dated May 17, 2012. The CAB is an agency under the Dept. of Transportation, at that time headed by Roxas.

The VAT-exempted Cessna Caravan has serial number 208B2338.

Gutierrez is known to own three more Cessna Caravans, each worth $2.5 million. Other aircraft traceable to him are a Citation Mustang worth $2.5 million; a Citation CJ4, $9 million; a Cessna Sovereign, $19 million; and a Bell 429 helicopter, $6.5 million.

The combined fleet at Roxas’ disposal is worth $47 million, or P2.3 billion.

Gutierrez’s other known business is part ownership of SR Metals Inc. (SRMI), and subsidiaries San R Mining Co. and Galeo Equipment and Mining Co. Engaged in nickel mining in Tubay, Agusan del Norte, the three firms also have Erice as part owner.

SRMI et al gained notoriety when exposed for masquerading as small-scale; that is, owned by subsistence miners using only shovels, picks, and wheelbarrows. It turned out to be owned by biggies from Manila who employ heavy equipment and barges.

Small-scale nickel mines are limited to extracting 50,000 tons of ore per year. In Aug. 2006 to Sept. 2007 SRMI et al reportedly over-extracted more than 1.8 million tons, worth P28 billion.

The ore was shipped to China, but left unprocessed because poor quality. Intelligence reports have it that shiploads of bad ore were used in China’s hasty reclamation of reefs for airstrips in the South China Sea.

The DENR fined SRMI et al a mere P7 million for the environmental plunder, but ordered it closed in 2007. Erice, as then chairman, contested the closure before the Court of Appeals and the Supreme Court, but lost in June 2014.

To this day, however, the municipal and provincial officials refuse to enforce the closure. Same with the DENR under the present admin.

Gutierrez and Erice are reported to have bankrolled not only Roxas’ 2010 vice presidential run but also Aquino’s presidential bid. Their only aircraft then was the Citation Mustang, which Aquino and Roxas flew.

That Citation Mustang too was VAT-exempt.

The exemption was given to Galeo chairman Isagani P. Ferrer on Dec. 22, 2009, only three weeks after request on Dec. 1, 2009. Again, no other aircraft, aviation firm, or miner was granted such privilege.

Galeo had applied for VAT exemption of its two-year lease of the Citation Mustang from Boom Line Investment Ltd. (No record exists of that supposed lessor based in the British Virgin islands, a money-laundering haven.)

The lease was for $30,000 a month for 24 months starting Dec. 1, 2009, totaling $720,000. The foregone 12-percent VAT amounted to $86,400, or P4,320,000.

The reason for the exemption was again very general: “That Galeo intends to use the aircraft in transporting passengers and/or cargo from points within and without the Philippines.”

Signing the tax break on behalf of the BIR commissioner was James H. Roldan, Assistant Commissioner for Legal Service.

A condition for the grant of the VAT exemption was that Galeo would re-export the Citation Mustang to Boom Line after the two-year lease. There is no record of such compliance.

Last Saturday presidential contender Rodrigo Duterte accused Roxas of coddling the “dishonest miner” Gutierrez. He said Roxas has been protecting the business interests of SRMI. “It is because of this protection that the mining operations of Gutierrez continue.”

Duterte swore to have personally seen Roxas taking Gutierrez’s jets in Davao City, where he (Duterte) is mayor. “If that is not corruption, then what do you call that?”

The last time Gutierrez was in the news was in early 2015. He lent the helicopter used for the aerial videography of a Batangas eco-farm of a businessman-friend of Vice President Jojo Binay. Sen. Antonio Trillanes IV, a guest of honor at the eco-farm’s inaugural, later claimed that Binay secretly owns it.

Erice, for his part, was last in the news in Sept. 2015 questioning the citizenship of Sen. Grace Poe. That was right after Poe turned down Roxas’ invitation to be his vice presidential running mate.

Poe and Binay are, like Duterte, presidential candidates. Roxas trails the three in monthly voter-preference surveys.

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