Top Stories

  Metro

  Business

  Regions

  Opinion

  World

  Life & Times

  Sports

  Tech Times

Tuesday, March 18, 2008

Ranking Finance department official resigns

Undersecretary was apparently behind the classification of Pall Mall cigarettes, which was overturned by BIR

By Chino S. Leyco, Reporter

MORE than a month after the government reversed the controversial ruling of Finance Undersecretary Gaudencio Mendoza Jr. on the brand classification of Pall Mall cigarettes, the official resigned from his position.

Finance Secretary Margarito Teves has confirmed Mendoza’s resignation from the Finance department’s Legal and Revenue Operations Group effective April 1, 2008.

Teves said Finance Under­secretary Gil Beltran will tem­porarily take over Mendoza’s position, while Lawyer Jun Tomas will oversight the department’s Revenue Integrity Protection Service, which run after unscrupulous revenue officials.

“We will not let up in the fight against corruption in order to improve revenue collection and hence sustain economic growth and reduce poverty,” Teves said in a text message.

Pall Mall classification controversy

Mendoza, who served as a finance undersecretary since January 2006, earlier ruled that Pall Mall was a mid-priced brand subject to a P6.74 tax rate, or lower than the initial classification of the Bureau of Internal Revenue (BIR) that said it was a premium brand, or subject to a P26.06 tax.

On February 11, 2008, the Department of Finance ruled against Mendoza’s order and followed the BIR’s classification.

BIR Commissioner Lilian Hefti said the decision is reasonable, which classified the Pall Mall as a premium brand or the same as the Pall Mall imported by Duty Free Philippines.

Pall Mall is locally manu­factured by La Suerte Cigar and Cigarette Factory through a licensing agreement with BAT (British American Tobacco) Philippines.

Under government’s regula­tions, local production of a cigarette brand must be taxed the same as its imported variant, as long the importations were made first. In the case of Pall Mall, local production came ahead of Duty Free’s importations.

Lawmakers had already been set in thinking that Mendoza made an error in classifying Pall Mall as a mid-priced brand.

The Manila Times tried to contact Mendoza for his comment, but his mobile phone could not be reached.

Mendoza earned his Master of Law at the Harvard Law School. He has degrees in Bachelor of Science on History and Government, and Bachelor of Laws from the Ateneo de Manila University.

Before joining the Finance department, he was the deputy secretary general for Legal Affairs in the House of Representatives; assistant and deputy executive for Legal Affairs, Office of the President of the Philippines; legal consultant to the Com­missioner of Internal Revenue; and the deputy Com­missioner of Customs.