MAILBOX: Aranas disputes accusations

I would like to set the record straight regarding certain inaccurate and/or outright false and malicious statements in Ms. May Ann LL. Reyes’ article entitled The Tables Have Turned published in The Philippine Star on Sept. 6, 2017.

1. The issue of the propriety or impropriety of the BIR’s tax compromise deal with Del Monte Philippines, Inc. (DMPI) is far from settled. Congressional probe on the matter is still ongoing, and the plunder complaint filed by Danilo Lihaylihay before the Ombudsman has yet to be resolved or even acted upon.

2. I have nothing to do with the plunder complaint filed by Mr. Lihaylihay with the Ombudsman. I do not know him, and I have never communicated with him. In fact, I had to cross-check the factual allegations in Mr. Lihaylihay’s complaint letters with BIR records on the DMPI tax deal before resolving to issue show-cause orders to BIR personnel involved in the assessment so that they could ventilate their side of the story. As the records will show, my office received Mr. Lihaylihay’s initial complaint letter on April 7 and a more detailed complaint letter on May 3. The show cause orders were issued on May 29 and 30.

3. The administrative investigation of the DMPI case that the BIR Legal Group commenced by issuance of the show-cause orders at the end of May did not run parallel to the congressional investigation. When my office received written instruction from commissioner Dulay on July 10 to cease the investigation and to instead forward to him all papers and documents on the matter, I immediately complied without protest. At that time, the congressional probe was not yet under way.

4. I deliberately excluded commissioner Dulay and his chief of staff, Gaudencio Mendoza, from the list of recipients of the show-cause orders because commissioner Dulay occupies the highest position in the bureau. His culpability in the DMPI deal, if any, would be best threshed out in the proceedings before the Ombudsman and not in an investigation conducted by a subordinate office.

5. Under Revenue Administrative Order No. 2-2014, the Office of the Deputy Commissioner for the Legal Group (ODC-LG) has the jurisdiction, authority and duty to institute preliminary, fact-finding and formal investigations on tax frauds and administrative violations that may have been committed by revenue officers and personnel. Thus, the Internal Affairs Service (AIS) and the National Investigation Division are under the ODC-LG. Upon my instruction, the show-cause orders were properly issued by the Internal Investigation Division, which is under the IAS.

6. In accordance with established BIR procedure, in cases of allegations of tax fraud, the ODC-LG, through its subordinate offices, conducts an investigation and, upon the conclusion thereof, submits the resulting report/recommendation and the docket to the Office of the Commissioner. In the case of the complaint of Mr. Lihaylihay, the investigation did not even take off due to the cease-and-desist order of commissioner Dulay. In fact, only one of the BIR personnel who received show-cause orders submitted an explanation. Hence, the ODC-LG essentially had nothing to report to commissioner Dulay.

7. My SALN is complete and accurate. It is improper, to say the least, to compare corporate shareholdings reported in my SALN with corporate shareholdings reported in my old bio-data which was made before I joined the government last year. As pointed out by Ms. Reyes in her article, certain companies mentioned in my old bio-data – (1) Zeus Holdings, Inc., (2) Fujifilm Philippines, Inc., (3) Fujifilm Optics Philippines Inc., (4) Philippines Epson Property Holdings, Inc., (5) Aeon Credit Service (Philippines) Inc., (6) Sumitomo Mitsui Construction Co. (“SMCC”); (7) Epson Precision (Philippines), Inc., (“EPPI”), and (8) Firstscene Philippines, Inc., (“FSPI”) – were not included in my SALN. These companies were my corporate clients while I was engaged in private law practice, and any share of stock that was issued to me was merely nominal and intended to qualify me for directorship. A simple check of the current general information sheets of these companies would have revealed that I have already divested my nominal shares in the first five companies mentioned, that I was not a stockholder of SMCC (as I was merely a tax advisor thereof as indicated in my bio-data) or EPPI, and that I only held the position of corporate secretary in EPPI (which position I relinquished in 2016). In the case of FSPI, my one share therein is included in the shares of stocks under personal properties in my SALN.

8. I have only one Tax Identification Number (TIN). The different TINs appearing in the corporate documents of the above companies can be explained as follows:

a. In 2012, when my ITR for the tax year 2011 was filed on April 16, 2012 (April 15, 2012 being a Sunday), the BIR personnel informed the paralegal filing my ITR that my original TIN somehow no longer existed in their database and that I had been issued a new TIN. Thus, my old TIN was crossed out in my 2011 and replaced with my new TIN, which I have since used in all my transactions.

b. The third TIN was only used for a GEI Investment document and is clearly just a typographical error, as only one of the nine digits was changed.

Against the advice of my friends and colleagues, I put on hold my successful private law practice and joined the BIR because President Duterte’s promise of zero corruption in his administration strongly resonated with me. Gradually, I have realized that if one wages a fight against corruption, it can be lonely and unforgiving, and the tables can indeed be quickly turned against him, especially through a well-funded black propaganda.

I am not a politician. I harbor no aspiration for any other office in government. Going in, and having been a tax practitioner for my entire legal career, I had high hopes and grand designs of making the BIR efficient, corruption-free and taxpayer friendly. I am still determined and will do all I can for the bureau to achieve those lofty standards. Beyond that, I can only hope that the rest of the leadership of the BIR share my sentiment.

Thank you, and I would be grateful if this letter finds print in your esteemed newspaper so that the false and inaccurate reports in Ms. Reyes’ article can be corrected and clarified.

Very truly yours,

JESUS CLINT ARANAS