MANILA, Philippines — Present and retired Bureau of Internal Revenue (BIR) officials described Tuesday as “erroneous” the way prosecutors in the impeachment trial of Chief Justice Renato C. Corona compute his net worth using the fair market value (FMV) of his properties.

Under the statement of assets liabilities and net worth (SALN) law, the Tax Code, and decisions issued by the Supreme Court and the Court of Tax Appeals, they said the net worth of an individual should be based on the historical or the original cost of properties when they were acquired.

Former Revenue Regional Director Estrella Martinez, who is both a lawyer and certified public accountant, said FMV is used only to justify the value of the assets when they are sold later.

She also said that the assessed value of the declared assets is utilized in the computation of real estate tax due the local government.

Martinez noted that the P22.9-million hike in the assets of Corona through the years up to 2010 was due to the increase in FMV which cannot be used in the computation of his net worth.

“There is an ocean of distinction between the original cost and the FMV and to accuse Corona of amassing illegal wealth because of the sharp hike FMV of his properties is illogical and against the existing jurisprudence,” she said.

She said an individual cannot be faulted if the value of his properties appreciate through the years and this is one of the reasons one buys a unit in a condominium building which has yet to be constructed during the so-called pre-selling period.

She also said the inclusion by the prosecutors of Corona’s donated and inherited properties in Quezon City worth more than P5 million in his net worth was unjustified because they were not acquired by cash but a gratuitous gift given to him by his parents or relatives.

She explained that the Quezon City property can be declared at its FMV because it has no historical cost, “but should not be part of Corona’s net worth.”

Martinez further said the FMV column in the SALN should also be disclosed but should not be included in the computation of the net worth.

“As a BIR examiner for more than 32 years I have digested the net worth method of investigation and I have been lecturing on SALN. As such I can authoritatively recommend an intelligent investigation of Corona’s SALN and with the simple procedure the government can save on unnecessary television time and save people’s tax money,” she said.

According to Martinez, the net worth is arrived at by deducting the liabilities, adding that there are three columns for valuation in the SALN – that is the cost, FMV, and the assessed value.

She said that since the SALN is like a balance sheet, all acquired properties should be valued at historical costs, meaning a cash acquisition or through a loan.

She said FMV should be declared but it should not be considered for purposes of arriving at net worth at the end of the year.

She said properties which are acquired through donation and inheritance should be presented as part of the assets but should only be shown in the SALN as a parenthetical disclosure placing the words “inherited” or “donated.”

Some current BIR officials, who requested anonymity, supported the view that the way net worth was computed by House prosecutors was erroneous.

Meanwhile, former Revenue Deputy Commissioner for Operations Victor A. Deoferio Jr. said Corona’s father used to head the old estate tax division of the BIR.