Mark Brian M.

Mariño

II - BSED Mathematics

ETHICS

Tax Evation of Marcos

The estate tax is a tax on a person's assets after death. In 2021, federal estate tax
generally applies to assets over $11.7 million. In 2022, it rises to $12.06 million.
Estate tax rate ranges from 18% to 40%.

The basic estate tax due, assessed by the BIR on July 26, 1991, was P23 billion. This
deficiency tax assessment became final and unappealable when the Marcos family
failed to file a protest within 30 days.

The applicable interest rate is 20% per year. More than 30 years after the death of
former dictator Ferdinand Marcos, the annual interest continues to accumulate as the
estate tax liability remains unpaid.

On June 5, 1997, the Supreme Court affirmed the decision of the Court of Appeals on
the matter. The ruling became final and executory on March 9, 1999, based on the
SC’s entry of judgment.

It’s a matter of fact that the estate tax liability remains unsettled. While it was the
political party of presidential candidate Manila Mayor Isko Moreno who wrote to the
BIR to inquire about the estate tax liability of the Marcos family, it was former
Supreme Court senior associate justice Antonio Carpio who first wrote about the tax
debt involving the Marcos estate in his Inquirer article on September 30, 2021.

It’s no surprise this was raised during presidential debates which Marcos Jr. refused to
attend. He could have explained himself to the public during the debates rather than
let other presidential candidates use the issue against him.

The BIR can file criminal charges and the Marcoses, if found guilty, could go to jail.

Under Section 205 of the tax code on civil remedies, (1) a warrant of distraint and/or
levy and (2) civil or criminal action may be exercised simultaneously. The judgment
in the criminal case shall not only impose the penalty but shall also order payment of
the taxes.

Under Section 254 of the tax code, any person who willfully attempts to evade tax
shall be punished by a fine of not less than P500,000 but not more than P10 million
and suffer imprisonment of not less than 6 years but not more than 10 years.

The BIR computed the estate tax based on the known assets of the dictator at the time
of his death. These were “culled from property records in government offices,
documents recovered… in Malacañang when the Marcoses fled the country in 1986,
as well as pleadings filed in court by the Marcos heirs who claimed ownership of the
secret foreign bank accounts and other assets…”

The BIR assessed the taxes due on the Marcos estate at P23,293,607.638. It made sure
proper notices were given to Imelda Marcos. Carpio referred to a June 5, 1997
Supreme Court ruling on a Court of Appeals decision that Bongbong raised to the
tribunal. The SC ruling noted that formal assessment notices were served on Imelda
and her lawyer on Oct. 20, 1992, again on her, Bongbong and their lawyer on April 7,
1993 and June 10, 1993.

“Despite all of these Notices, petitioner [Bongbong] never lifted a finger to protest the
assessments nor appealed the same to the Court of Appeals,” the SC ruling declared.

However, when the BIR served notices to the Marcos heirs that real properties in
Marcos’ name would be auctioned off to pay the estate tax, Bongbong filed a petition
with the CA questioning the validity of the assessment “on flimsy ground.” The CA
dismissed his petition, saying the tax assessment had already become “final and
unappealable.”

Yet, “24 years after the SC affirmed that CA ruling, the Marcos heirs still have not
paid the estate tax,” Carpio stressed. This failure to pay have caused the 20 percent
annual interest on the tax to build up to P139,721,645,828, and the 25 percent penalty
to P34,940,411.454.

Altogether, the estate tax the Marcoses now owe is P203.817 billion – which, if paid,
could tremendously help in aiding the millions gravely affected by the COVID-19
pandemic.

References:

https://www.philstar.com/opinion/2021/10/02/2131157/marcos-ill-gotten...

www.rappler.com/business/ask-the-tax-whiz-marcos-family-estate-liability/