Pacquiao trains at his gym in the city of General Santos in the Philippines
Pacquiao trains at his gym in the city of General Santos in the Philippines AFP

Philippine boxing legend Manny Pacquiao on Friday won a years-long court battle to avoid paying tens of millions of dollars in extra taxes after an appeals court dismissed the case against him.

Pacquiao and his wife Jinkee had been accused by the Bureau of Internal Revenue in 2012 of owing more than 2.2 billion pesos ($37 million) in unpaid taxes for 2008 and 2009.

The 43-year-old previously insisted he had paid the taxes in the United States, so did not need to do so in the Philippines because the two countries have an agreement allowing their citizens to avoid double taxation.

Then president Benigno Aquino was waging a bruising campaign against tax evasion as part of a general crackdown on corruption.

Pacquiao, a former world champion and politician, became one of the highest-profile targets of the tax office's sweep.

But the Court of Tax Appeals found the tax office had relied on "unverified news articles" to make its assessment.

In a 49-page judgement, the court said the "assessment for deficiency income tax is void for violation of petitioners' right to due process and for lack of sufficient factual basis".

The ruling was handed down on September 29 but apparently only released on Friday.

Pacquiao, who reportedly ranked among the country's top individual taxpayers in 2008 and 2009, welcomed the decision.

"Since the start of my career, I have made sure to pay all my taxes because this helps our government," he said in a statement.

"I thank the Lord that the truth has come out."

AFP could not reach the tax office for comment. It is not known if it plans to appeal the decision.

Pacquiao, who retired from boxing last year for a tilt at the Philippines presidency, is deeply admired for hauling himself out of poverty to become one of the world's greatest and wealthiest fighters.

But he has also earned plenty of detractors with his support for former president Rodrigo Duterte's deadly drug war, homophobic comments and lack of education.

Pacquiao has been preparing for a charity match against martial arts YouTuber DK Yoo scheduled for December 10 in Seoul.

He ended his 26-year boxing career with a points defeat to Cuban Yordenis Ugas in August 2021 and, as well as being a former senator, made a failed bid earlier this year to be president of his country.

Pacquiao's net worth was almost $54 million in 2020, according to Senate data.