Gov’t targets more big-time tax evaders

MANILA, Philippines — The Duterte administration remains determined to run after more tax evaders, the Department of Finance (DOF) said Friday.

In an interview, Finance Secretary Carlos Dominguez III said the government would continue its crackdown against tax evaders, while observing due process in carrying out this goal.

“We’re running after the guys who don’t pay their taxes, whether they’re a corporation or affluent individuals,” Dominguez said. 

The finance chief said the government would be setting its sights first on cases that would result in bigger gains for the government.

“Just like Mighty Corp. … We put our effort on the ones where the yields are higher,” he said.

Dominguez said the government would follow due process in running after individuals or corporations that are not paying the right taxes.

“First of all, we have to have good evidence that they are cheating on the tax,” it’s not just because you’re rich, we’ll go after you. That’s not fair also,” he said.

“If there’s evidence that you haven’t paid your tax, we conduct a raid on the company and we see that there are a lot of untaxed goods that haven’t been (paid), of course we will go after that.

“So it’s a lot of forensic investigation, forensic accounting, looking at the industry, you know, benchmarking, how come this guy has this percent of the market and pays only so much,” he added.

Mighty was previously embroiled in controversy due to allegedly selling cigarette packs with fake internal revenue tax stamps.

The Bureau of Internal Revenue (BIR) had filed criminal cases against the company for allegedly not paying excise taxes amounting to P37.88 billion, but these cases were later dismissed after Mighty paid P25 billion in compromise settlement to the government.

This amount was sourced by means of an interim loan from Japan Tobacco International Philippines Inc., as well as the sale of Mighty and its assets to JTI for a total amount of P46.8 billion, exclusive of VAT.

Dominguez said this takeover is expected to yield the government an additional P24 billion annual revenues from excise tax payments.

Budget Secretary Benjamin Diokno earlier said the case of Mighty, among others, has proven the government is serious in running after tax evaders, which should ensure that plans to implement a tax amnesty program would be effective.