Tax credit scam whistle-blower cleared of contempt

By Jocelyn Uy
Last updated 08:05am (Mla time) 07/06/2007

MANILA, Philippines — The Sandiganbayan has cleared tax credit scam whistle-blower Felix Chingkoe of the contempt charge his estranged older brother, Faustino, filed against him last year.


Faustino Chingkoe, the principal accused in the P5.3-billion tax credit scam, accused his younger brother of “severely criticizing” the Sandiganbayan Fourth Division — where Faustino is facing 83 counts of graft — for allowing the latter to travel to Canada and the United States in June 2006.


In asking the court to cite his younger brother for contempt, Faustino said Felix had accused the anti-graft court of “obstructionism” and of being “arrogant” for repeatedly denying the prosecution’s plea to keep the former from leaving the country.


Such statements, Faustino argued, tended to create distrust and destroy public confidence in the anti-graft court.


The Sandiganbayan, however, ruled there was insufficient basis to cite Felix for contempt.


Felix was quoted in a newspaper (not the Philippine Daily Inquirer) in July 2006 as having said that it was “sheer arrogance” for the Sandiganbayan to allow his brother to travel abroad to look for a school for his daughter.


In his defense, Felix said the reporter had quoted him out of context and his imputation of arrogance was not addressed to the court.


What he said during the interview was “it is sheer arrogance on the part of the petitioner [Faustino] to continue traveling abroad when there are a number of cases pending against him,” he explained.


Faustino was slapped with a string of graft cases following an audit in the mid-1990s showing more than 10 of his companies were allegedly responsible for defrauding the government of P2.5 billion through the fraudulent use of tax credit certificates (TCCs), or half of the P5.3-billion worth of questioned TCCs.


A TCC serves as a company’s claim for tax credits, which are given to firms that import raw materials for processing and then export the finished products which are not sold in the Philippines. Companies trade their TCCs with other firms that use them to claim tax credits. The fraud comes in when companies not entitled to TCCs use them anyway.


Felix Chingkoe is a prosecution witness against his brother.


“The court is sufficiently satisfied with respondent Felix’s explanation,” read the court decision.


It said Faustino failed to present credible evidence to prove Felix had uttered such “offending statements.”


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