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DOJ chief says bank officials criminally liable if found violating NIRC provisions

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Executives and officials of banks and other similar financial institution can be held criminally liable if found extending loans to taxpayers in possession of multiple books of accounts, Department of Justice (DOJ) Secretary Leila De Lima said on Sunday.

According to De Lima, such action is in violation of Section 253 of the National Internal Revenues Code (NIRC), also known as the Tax Reform Act of 1997, as the provision clearly states that any person who willfully assists in the commission of a crime penalized under the tax reform law “shall be liable in the same manner as the principal.”

“Thus, when a responsible banking, lending or financial institution officer grants loans to a person even as he fully knows that said person keeps multiple books of accounts, which is clearly prohibited by the NIRC, said officer is equally guilty of the crime committed by the loan grantee,” De Lima stressed.

The DOJ chief’s comments stemmed from the letter-request of Department of Finance Secretary Cesar Purisima expressing his intention to institute criminal actions not only against those maintaining multiple books of accounts but also against officers of the banking and lending institutions that use the said documents.

He noted that several banks and lending institutions have been extending loans to taxpayers who have been keeping two or more sets of books of accounts, which is prohibited under Section 257 (b) (5) of the NIRC.

In the same vein, Secretary De Lima also pointed out that Section 55 (a) of Republic Act No. 8791 or the General Banking Law of 2000 prohibits officials and officers of any bank from engaging in any fraudulent transaction.

Section 55.2 (b) of R.A. 8791 prohibits borrowers from submitting false documents or resorting to misrepresentation in order to obtain, renew or increase a loan or other credit accommodation.

But De Lima emphasized that her position is only for “the information and guidance” of the Department of Finance (DOF) which earlier requested for a legal opinion from the Justice department on whether officers of banks and lending firms can be charged for being an accomplice in tax evasion for allowing borrowers to use a second set of financial books which are different from that presented to the Bureau of Internal Revenue (BIR) to reflect a more favorable financial condition of the company or borrower.

She also refused to give the requested opinion, saying that the issue of whether criminal violation exists should be addressed to the prosecuting officer who, under the law, has the duty to decide whether or not to file a complaint for violation of the law, after conducting a preliminary investigation.

“Such opinion on my part would be misconstrued as undue interference in or intrusion into the exercise of the discretion by the prosecuting officer in making such determination, which discretion must be free from pressure and other irrelevant consideration,” the DOJ chief stressed.

She added that the DOJ cannot issue a legal opinion on the issue as it involves the rights of the private parties -- the taxpayers and the officers of the banking and lending institutions -- who may be adversely affected and contest the issue before the courts.

(Priam F. Nepomuceno/PNA)




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