The Supreme Court clarified that even if a taxpayer is acquitted of criminal tax charges, they are still legally obligated to pay any outstanding taxes. This decision emphasizes the distinction between criminal and civil tax liabilities.
The Supreme Court (SC) on Friday ruled that being acquitted of a criminal tax violation does not automatically exempt a taxpayer from paying unpaid taxes. In a decision penned by Associate Justice Mario V. Lopez, the SC’s Second Division dismissed the criminal cases against E & D Parts and Supply, Inc. and its treasurer, Margaret Uy, due to lack of evidence.
The Office of the Solicitor General (OSG) previously filed criminal cases before the Court of Tax Appeals (CTA) against the company and Uy for failing to file the company’s income tax return and pay income and value-added tax. The CTA dismissed the criminal cases due to insufficient evidence proving Uy was a responsible officer of the company. Additionally, it dismissed the related civil case that aimed to determine the amount of taxes the company owed. However, the OSG argued before the SC that the company should still pay the tax due regardless of the acquittal. The High Tribunal has since ruled that even if a taxpayer is acquitted of a criminal charge, they remain liable for unpaid taxes. It explained that an obligation to pay taxes arises from the law itself, and not from committing a criminal act like tax evasion
Supreme Court Taxes Tax Liability Criminal Charges Acquittal
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