Acquittal in tax case does not erase obligation to pay taxes

By Benjamin Pulta, Philippine News Agency

FILE: Facade of Supreme Court of the Philippines (PNA photo)

MANILA – The Supreme Court on Friday said taxpayers cleared of criminal tax charges are not exempt from paying their obligations.

This was stressed in a decision by the tribunal’s Second Division that dismissed for lack of evidence the tax evasion cases against E & D Parts and Supply, Inc. and its treasurer.

The Office of the Solicitor General (OSG) lodged the case against E & D Parts and the official before the Court of Tax Appeals (CTA) for failure to file income tax returns and pay both income and value-added taxes.

The tax court, however, found insufficient evidence to prove that the corporate officer was responsible for the alleged violations, leading to her acquittal from criminal liabilities.

The CTA also dismissed the related civil case that aimed to determine the amount of taxes owed by the company.

The OSG argued before the SC that the company should still be required to pay taxes, regardless of the acquittal.

“A taxpayer’s obligation to pay taxes arises from the law itself, and not from committing a criminal act like tax evasion. Therefore, even if a taxpayer is acquitted of a criminal charge, they remain liable for unpaid taxes,” the SC said in its ruling.

However, the court noted that in this particular case, E & D Parts was not required to pay the assessed tax due to an invalid assessment.