Picture this: you are 78 years old, well past retirement but relishing the remaining years of good health, and more important, basking in the love and respect of your family and the high esteem of a nation you have faithfully served. One day you get the shock of your life. You are told you’ve been found guilty of corruption in connection with a decision you made as a public servant 13 years ago. Now you are being sentenced to a jail term of 15 years. All your achievements evaporate before your eyes, and the stigma of a conviction stalks you like a cruel joke. People who don’t know you celebrate the event as the triumph of justice. At last, here is the big fish that didn’t get away, they would say.
Your friends comfort you, trusting implicitly in your innocence, but they are dying to know what happened so they can defend you. And you find yourself trying to summon enough will and equanimity to explain a case whose arguments rest on an appreciation of the technicalities of our tax laws – the issue of what to allow or disallow as deductions from a tax base or why a tax should not be levied on a tax, etc.
This is exactly what has happened to Benny Tan. At his age, he should not need to defend himself like a common felon. He was president and chief operating officer of countless companies. He capped a distinguished career in the public and private sectors by becoming our country’s ambassador to the Federal Republic of Germany. He was nearing retirement when President Corazon Aquino asked him to head the Bureau of Internal Revenue in the heady years following Edsa I.
It was December 1988, and Tan had been in office for more than two years. After a series of reviews of a disputed tax assessment dating back to the time he assumed the BIR position, he found himself approving an offer of a compromise settlement from the taxpayer, the San Miguel Corporation. The offer had been thoroughly studied and its acceptance had been recommended by ranking officials of the BIR’s prosecution and legal divisions. Then, more than four years later, from out of the blue, the Ombudsman resurrected this decision from the files and used it as the basis for a graft case against him, two of his subordinates, and two officials of SMC. By then, Benny Tan was no longer BIR chief, and he had to take care of his own defense.
The investigators from the Office of the Ombudsman charged him with entering into an illegal compromise agreement that allowed San Miguel Corporation to settle an alleged tax obligation of about P293 million for only P10 million. They considered the settlement to be “unlawful and entered into in bad faith and manifest partiality causing undue prejudice to the government.” They accused Tan of “conspiring and confederating” with his subordinate officials and the representatives of the firm. The Supreme Court, if not the
Sandiganbayan itself, which has convicted Benny Tan, may hopefully realize what a grave injustice has been committed here against an honest man.
I consider myself a friend of Benny Tan, and I begged him to share with me the documents of his case. In the interest of fairness, but without going into the merits of the case, I think it is important to bring to public notice the following:
- The amount of P293 million alleged as the tax deficiency of SMC was not a final levy but only an initial assessment that the taxpayer had a right to protest, and, in fact, did protest. Ironically, the deficiency surfaced only after SMC had voluntarily reported that they spotted a mistake in the computation of the ad valorem tax they were paying and wished to correct it. Subsequent reviews by various BIR divisions, following SMC’s protest, showed this initial estimate to be excessive and incorrect;
- The law gives the BIR Commissioner the prerogative to enter into a compromise agreement when there is doubt about the validity of a claim against a taxpayer;
- The compromise settlement with SMC was fully documented and transparent, and the pertinent documents relied upon by the Sandiganbayan indeed formed part of Tan’s own defense;
- The cases against Tan’s co-accused — the two other BIR ranking officials and the two SMC officials — were subsequently withdrawn by the Ombudsman, thus rendering the charge of conspiracy empty; the Ombudsman also stated they had no evidence of bribery or financial interest or benefit on the part of any of the accused in this case; and
- Benny Tan’s successors in the BIR had refused to collect the supposed tax deficiency of P293 million from SMC, believing that this figure was not correct, but unlike Tan, they were never charged. The Sandiganbayan decision has ordered the BIR to collect from the SMC what it supposedly owes the government. It is doubtful that the present Commissioner would abide by this order, but even if he does, the SMC would surely protest it. The final arbiter of what constitutes the proper tax will be the Tax Appeals Court, not the Sandiganbayan. If Benny Tan is sent to jail now, and the Tax Appeals Court rules later that the supposed tax liabilities of the SMC have no basis, it may be easy to release him from prison. But I don’t think it would be as easy to restore his honor.
It is sad that the renewed crusade against corruption should result in the victimization of an honest person. For nothing weakens the resolve against wrongdoing more than the failure of our justice system to nail down the real offenders – those who flout our legal and moral system brazenly and get away with it. In Benny Tan, the Sandiganbayan has not caught the big fish; it has caught the wrong fish.
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