Philip Morris may have manipulated govt—lawmaker

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A lawmaker on Wednesday took up the cudgels for Mighty Corp., the oldest Filipino-owned cigarette manufacturer in the country, which is being accused of tax evasion.

Rep. Emil Ong of Northern Samar, a member of the House Ways and Means committee, warned his colleagues and government offices to thoroughly verify sources of data before initiating investigations.

He made the pitch after Philip Morris Fortune Tobacco Co. (PMFTC) accused Mighty of engaging in illicit trade based on a deficient report from the Senate Tax Research Study Office (STSRO).

“But these are all nothing because according to the official transcript of the Senate committee hearing, the data used by the STSRO are incomplete,” Ong said.


“PMFTC President Paul Riley himself subjected their rival to a trial by publicity, giving press statements claiming that ‘their suspicions were true.’ But these are all nothing because according to the official transcript of the Senate committee hearing, the data used by the STSRO are incomplete,” Ong said.

“We should not allow our government offices to be exploited by Philip Morris’ vested interests,” he added.

The data in the STSRO study was allegedly supplied by the Department of Trade and Industry (DTI) and based on an AC Nielsen study paid for by PMFTC.
The DTI report allegedly lacked official data from the Bureau of Internal Revenue (BIR) and was allegedly sourced merely on DTI’s projections and the paid study.

According to Internal Revenue Commissioner Kim Henares, AC Nielsen refused to share the study to the BIR despite numerous requests, and the DTI report itself was incomplete as it lacked official BIR data and was sourced merely on DTI’s projections and the paid study.

Ong said “the DTI may have unwittingly violated Article 10 of the World Trade Organization (WTO) GATT 1994 which states: All information which is by nature confidential or which is provided on a confidential basis for the purposes of customs valuation shall be treated as strictly confidential by the authorities concerned who shall not disclose it without the specific permission of the person or government providing such information, except to the extent that it may be required to be disclosed in the context of judicial proceedings.”

“In this case, the DTI may have erroneously divulged information to the wrong party which should be confidential by virtue of the said WTO agreement,” the lawmaker said.

“Our government agencies may have been manipulated by Philip Morris on a grand scale to belittle the achievements of the sin tax law and pressure lawmakers and concerned government agencies to push for its amendment,” he added.

Rep. Reynaldo Umali of Oriental Mindoro also denounced the use of unofficial data and statistics from studies commissioned by foreign monopolies.

“For the report to be counted as substantive and conclusive, the report should come from the proper and credible agency tasked to conduct such audits or investigation in order for it to be considered substantive and conclusive, he said.

Umali stressed need for an anti-trust law to protect local companies from big foreign interests. He said an anti-trust law will ensure the participation of the small-and medium-scale enterprises in putting the country’s economy on solid footing.

“The absence of the law enables big businesses to manipulate prices, control supplies, dictate government budgets through paid taxes and have strong lobbying power to pursue their economic interests,” he said.

Mighty executive vice president Oscar Barrientos earlier said the STSRO study was still subject to final analysis, in response to PMFTC’s alleged accusation that Mighty Corp. undervalued its imports based on the questioned study.

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