SM defends Aquino over tax fraud

Friday, February 17, 2012

RETAIL giant SM defended President Benigno Aquino III amid allegations of tax fraud by a revenue informer for the sale of a 3.4-hectare property at Luneta Hill, claiming it was fully paid as early as 1997.

This means President Aquino only exercised a ministerial function in the finalization of the lot acquisition by having Executive Secretary Paquito Ochoa to sign in his behalf the absolute deed of sale last September 16, 2011.

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The lot where the mall stands today has also been a center of controversy the past weeks due to the planned mall expansion which will endanger 182 pine and alnus trees, sparking protests from different sectors of the Baguio community.

In an official statement discussing the history of acquisition of SM lots obtained by Sun.Star last February 16, as early as 1988, SM already expressed its interest in buying the Luneta Hill property to protect their properties from erosion since adjoining lots have irregular terrain.

However, in 1992, prior to the auction of the lots, the Committee of Appraisal, composed of then Mayor Jaime Bugnosen and the City Environment and Natural Resources officer, appraised the said lots at P1,500 per square meter, while the Department of Environment and Natural Resources (DENR) regional executive director then appraised it at P1,550.

When the auction date was set April 22, 1992, SM was declared as the highest bidder with a bid amount of P2,027 per square meter or P69,999,995.52 for the entire property with the DENR granting the Award Order on May 5, 1992.

The mall chain also claimed they only conveyed 31,688 square meters of the original 34,528 square meters, as some 2,834 square meters was excluded for road right of way.

However, SM denied the property was undervalued as a public bidding then was conducted, adding it was never remiss in paying taxes to government for the acquisition of the lots.

It may be recalled the Philippine Association of Revenue Informers president Danilo Lihaylihay accused the mall, President Aquino, Ochoa and DENR Secretary Ramon Paje of conspiring and conniving for the sale of the property for non-payment of capital gains tax, making them liable for plunder, an impeachable offense.

However, SM claimed the sale was exempted from the payment of capital gains tax and payable by the seller because the seller is the Republic of the Philippines but said it paid for the documentary stamp tax on the said sale.

“The Certificate Authorizing Registration on the sale of the 31,688-square-meter lots to SM was already issued by the Bureau of Internal Revenue-Baguio while transfer tax on the ale and transfer of the property was already paid to the City Treasurer of Baguio city,” SM management said.

The mall management also claimed the delayed acquisition of the absolute deed of sale was due to the inaction of the government agencies concerned.

“The execution of the Deed of Absolute Sale under the present administration was probably part of the clean-up process of this administration on pending matters,” SM management added.