24/01/2025
The (SC) has reiterated that being acquitted of a criminal tax violation does not automatically exempt a taxpayer from paying unpaid taxes.
The SC dismissed due to lack of evidence the criminal cases filed by the Office of the Solicitor General against E & D Parts Supply, Inc. and its Treasurer, Margaret L. Uy, for their alleged failure to file the company’s income tax return, and pay income and value-added tax.
The Court of Tax Appeals (CTA) had dismissed the criminal cases due to insufficient evidence proving that Uy was a responsible officer of the company and, therefore, could not be held criminally liable for the company’s actions. Additionally, the CTA dismissed the related civil case that aimed to determine the amount of taxes the company owed.
The SC ruled that 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 company’s acquittal thus did not release it from its obligation to pay the taxes due.
However, the company was not required to pay the assessed tax in this case due to an invalid tax assessment.
Read the press release in full at https://sc.judiciary.gov.ph/sc-acquittal-in-tax-case-does-not-erase-obligation-to-pay-taxes/
Read the full text of the Decision at https://sc.judiciary.gov.ph/259284-people-of-the-philippines-vs-e-d-parts-supply-inc-et-al/
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