Lawmakers hit ‘selective’ tax evasion raps

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The Bureau of Internal Revenue (BIR) should also file tax evasion cases against business tycoons, not just high-profile celebrities, a militant lawmaker said on Sunday.

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Rep. Emmi de Jesus of Gabriela recently filed House Resolution 623 urging the House Committee on Good Government and Public Accountability to investigate BIR’s handling of controversial tax evasion cases allegedly committed by big corporations and high-profile individuals.

“While BIR Commissioner Kim Henares has already filed 189 tax evasion cases against well-known celebrities before the Department of Justice [DOJ] with much publicity, the agency has not even responded to the DOJ’s endorsement of this one complaint that has been file repeatedly since two decades ago,” de Jesus said.

The lawmaker recounted that in 1987 former Allied Bank regional audit manager Danilo Pacana filed a P213-million tax evasion case against the company but BIR Commissioner Beethoven Rualo dismissed it.

Pacana again filed two tax evasion cases, alleging a P1.2-trillion tax arrear, against Lucio Tan’s Philip Morris Fortune Tobacco Corp. and Asia Brewery Inc.

De Jesus, citing Pacana’s earlier claim, said that the two firms used 27 dummy corporations to significantly underdeclare their actual sales in order to reduce their excise tax obligations.

Elpidio Que, the former regional sales manager of one of the companies, also exposed the scheme early in 2010.

However, the BIR has yet to respond to the complainants despite numerous follow-ups.

“To add to the injury, the Supreme Court even ordered the BIR to refund Fortune Tobacco some P355 million in excise tax collections,” de Jesus lamented.

“If we are to assure fiscal stability of the country’s finances and avoid incurring excessive deficit funding of a budget that keeps getting bigger by the year, Congress must investigate why revenue collections from big-time capitalists are foundering,” the lawmaker stressed.

Unconstitutional
Meanwhile, Rep. Terry Ridon of Kabataan Party-list also asked the BIR to stop implementing its Revenue Memorandum Circular 20-2013, which compels educational institutions to secure tax-exempt certificates, because it is unconstitutional.

“Clearly a mere memorandum cannot remove the status of exemption granted under the 1987 Constitution,” Ridon said.

He warned that such memorandum would not only result in higher tuition and school fees in the coming years, but also lead to the closure of schools.

“We most certainly hope that this is not another of the high-profile shame campaigns of the BIR to blunt its institutional failure to meet its collection targets,” Ridon said.

“The BIR should stop acting as the country’s national bully and focus instead on its massive collection shortfall in the billions of pesos,” the lawmaker added.

Despite the efforts made by the bureau in running after famous celebrities with tax liabilities, including People’s Champ Emmanuel “Manny” Pacquiao and actress Judy Ann Santos, the BIR again failed to meet its collections target for the year.

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1 Comment

  1. May I suggest that the case of GOLDEN DONUTS, INC. (GDI) [“Dunkin’ Donuts”] be also included in the investigation to be conducted by the House Committee on Good Government and Public Accountability on BIR’s selective tax probe?

    The news article which appeared in this newspaper on December 11, 2013, “WHO IS AFRAID OF DUNKIN’ DONUTS?”, by Columnist Emeterio Sd. Perez, mentioned that GDI has unpaid tax deficit of P1.5 Billion for year 2007, but Commissioner Henares refused to collect it or sue the company for alleged fraud for under-declaring its revenues in the income tax return