Supreme Court clears 10 in tax credit scam
The Supreme Court cleared 10 former Department of Finance (DOF) employees implicated in the P60-billion tax credit scam in the 1990s after finding that they merely performed their duties based on the then-prevailing “flawed” process of the agency’s One-Stop Shop program.
In a 62-page decision promulgated in January but made public only recently, the high court’s Second Division acquitted evaluators/tax specialists Asuncion Magdaet, Mark Binsol, Cherry Gomez, Merose Tordesillas, Gemma Abara, Gregoria Cuento, Raul De Vera, Purita Napeñas, as well as Annabelle Diño and Uldarico Andutan Jr. of violating the Anti-Graft and Corrupt Practices Act.
The ruling penned by Associate Justice Amy Lazaro-Javier emphasized that negligence alone is not enough to convict under Section 3(e) of Republic Act No. 3019, which penalizes “gross inexcusable negligence.”
The case stemmed from the illegal issuance of tax credit certificates to Scope Industries Inc., a company that used fake documents to claim millions in incentives.
It was alleged that, sometime in 1995, the accused government employees conspired with private individuals to grant certificates without legal justification and based on spurious documents.
In 2023, the Sandiganbayan convicted the accused on several counts and acquitted them on other charges of violation of Section 3(e) of RA 3019.
They were cited for their failure to spot the irregularity and their subsequent acceptance of the documents, which, according to the antigraft court, was “indicative of gross negligence in the performance of their duties.”
In seeking remedy from the Supreme Court, the former DOF employees maintained that they performed their duties in good faith.
Following orders
They asserted that they were merely complying with office orders, which allowed the submission of photocopies of supporting documents as part of the tax claim application.
Overturning the Sandiganbayan’s ruling, the high court noted that the evidence showed clear gaps in the procedure implemented in evaluating and issuing the certificates.
“These gaps paved the way for unscrupulous individuals to defraud the government by ultimately depriving it of taxes which were offset from improperly issued TCCs (Tax Credit Certificates). Notwithstanding this regrettable consequence, the Court finds that there exists reasonable doubt in Magdaet et al.‘s particular criminal liability, which warrants their exoneration,” the high court said.
According to the justices, the evidence failed to prove that the accused were aware of the falsities in the documents submitted and that they knowingly conspired with Scope Industries Inc. to grant it unwarranted benefits.
“That there were lapses in the verification and confirmation of the listed information in the application process for tax credits cannot be attributed to them, much less can these lapses serve as evidence of their fraudulent purpose,” the high tribunal said.
