Sandigan flip-flops on P5.3-B tax credit scam ruling

Elizabeth Marcelo (The Philippine Star) - January 24, 2017 - 12:00am

MANILA, Philippines - The Sandiganbayan Special First Division has reversed its earlier ruling finding five former officials of the Department of Finance (DOF) and a businessman guilty of graft over their alleged involvement in the P5.3-billion tax credit scam in the 1990s.

In a 23-page resolution promulgated on Jan. 11 but released to the media only yesterday, the court granted the respective motions for reconsideration of the respondents and acquitted them of seven counts of violation of Section 3 (e) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.

In its June 30, 2016 ruling, the Special First Division found the respondents guilty of the charges and sentenced them to minimum of 42 years to a maximum of 70 years imprisonment.

“The Court reviewed the records and the evidence in these cases, re-assessed them in light of the foregoing arguments of the prosecution and the defense, and found compelling reasons to reconsider, reverse and set aside the conviction of the accused-movants,” according to the new ruling penned by division chairman Associate Justice Efren de la Cruz.

Associate Justices Rodolfo Ponferrada and Rafael Lagos concurred with the ruling.

Acquitted by the court in its new ruling were former Finance executive director Uldarico Andutan Jr., former Finance Garment Division officer-in-charge Miriam Tasarra, former DOF tax credit evaluators Gladys Olaño, Irene Magbojos and Lucila Cueto and private respondent Kuldip Singh, president of clothing firms J.K. Apparel Manufacturing Inc. and United Apparel Manufacturing Inc.

Based on information on the cases filed by the Office of the Ombudsman in 2000, the public respondents allegedly conspired in awarding to Singh’s two garment companies tax credit certificates (TCCs) totaling P9,690,639 “without legal basis.”

The ombudsman said most of the supporting documents submitted by the two companies to support their application for TCCs were fake, while some were mere photocopies.

In its recent ruling, however, the court admitted that it failed to consider in its original decision one of the defense’s evidence – Office Order No. 93-13 dated Aug. 30, 1993 issued by then Finance undersecretary Antonio Belicena.

?The office order states that applicants for tax credits must present original and xerox copies of their application documents and that the original documents “may be returned to claimants after the corresponding TCCs have been issued to them.”

The court said the presence of this evidence gave rise to the possibility that Singh’s companies were able to present not merely the xerox copies but also the original application documents but was allowed to keep them in accordance with the office order.

The court pointed out that as stated by the Supreme Court in its previous rulings, “a possibility consistent with the innocence of the accused must be properly considered” unless the prosecution can present evidence to prove otherwise.

The court said it also reviewed the transcripts of the testimonies of prosecution witnesses and did not find anything there linking the respondents in the removal of several records in the docket of the DOF One-Stop Shop (OSS) Center.

The court said there was no proof to the prosecution’s allegation that the records which were supposedly “deliberately deleted” in the OSS docket were spurious or fake.

“Finding that the prosecution has failed to prove the charges against the accused-movants, their conviction will have no leg to stand on, and thus, they must be acquitted,” the court said.

The court had earlier ordered the indefinite suspension of the trial against the primary accused in the cases, former Finance undersecretary Antonio Belicena, after his camp was able to prove that he is suffering from dementia.

The Tax Credit project was spearheaded by the DOF during the administration of former president Fidel Ramos.

Under the project, TCCs were issued to companies that manufacture local products for export as a form of tax refund.

However, in a Senate investigation in late 1998, it was discovered that a total of P5.3 billion worth of TCCs were issued to several companies from 1995 to early 1998 despite spurious documents.

More than a hundred criminal cases were filed against Belicena, former DOF officials and several other private individuals in connection with the scam. The cases are pending in the Sandiganbayan.


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