No wonder drugs still proliferate

No wonder that – despite seven million police “tok-hang” (house calls) on known addict-pushers and two million surrenders; despite 45,000 drug raids and buy-busts, 55,000 arrests, and 4,000 gory slayings; despite the discovery and dismantling of 11 large “shabu” (crystal meth) factories nationwide, and the quintupling of street prices in the past year – dozens of druggies still are reported everyday. They have steady supplies of the stuff, from China, whisked in gigantic quantities past the notoriously crooked, inept Customs.

The 604 kilos of shabu from Xiamen that Customs only belatedly seized from a warehouse outside town was only one-fourth of the lot. Worth P6.5 billion, it came concealed in five steel cylinders mixed with kitchenware, light bulbs, and apparel in a cargo container. Informants told Congress inquiries that 18 more cylinders had slipped in. That bigger shipment has since dispersed into city slums.

If five cylinders can hold 604 kilos, then 18 cylinders yield 2,175 kilos. That much shabu can plaster 2,175,000 addicts for two weeks straight.

If 604 kilos is worth P6.5 billion, then 2,175 kilos is P23.4 billion. That’s how rich the narco-smuggler became from one shipment alone.

Nobody is being punished for it. Summoned to Malacañang, Customs chief Nicanor Faeldon said he offered to be fired, but that the President still trusts him. For Rody Duterte the fuss was all about the right computation of import duties per cargo container: whether P170,000 as Finance Sec. Sonny Dominguez wants, or only P40,000 that Faeldon actually collects. No mention was made of drugs.

Faeldon and fellow-appointees erred big, Duterte’s Congress allies growl. Despite hefty intelligence funds, they didn’t notice that the drug shipment was by a newbie importer yet breezed through light inspection at the “green lane.” That lane is reserved only for blue chip companies that regularly and cleanly have been importing or exporting for at least ten years. In this case, an influential 26-year-old shipment broker was let to input false entries in the Customs’ automated posting to the green, yellow, or red (high alert) lane. Meaning, narco-traffickers have broken into the agency’s multibillion-peso computer system. The broker confessed to paying off insiders P27,000 per container – of which he handles 100 a week – to look the other way. The Customs men claimed that China Customs tipped them off about the drugs, but to “please not punish” the Chinese importer-warehouser, alias Richard Tan. They raided the warehouse without court warrant. That nullifies the drug confiscation as the “fruit of a poisoned tree.” No coordination too with the Philippine Drug Enforcement Agency. The raiders broke rules on evidence handling by opening the cylinders themselves and laying out the supposed shabu on tables, for congratulatory selfies.

Faeldon countercharges that congressmen and senators are investigating him for ulterior motives. Supposedly they are involved in shady deals at Customs and are pressuring him to play along.

If that’s true, then Faeldon must expose and indict the law breaking lawmakers. Failure to do so would mean one more infraction: abetting crime by fellow-public officials.

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Bureau of Internal Revenue chief Caesar Dulay too is under fire, though for doubtful reasons. Allegedly he illegally settled for a mere P14.9 million a multinational firm’s staggering P30-billion income tax liability. The figures raised by his antagonist deputy do not tally.

The company in question is 91-year-old Del Monte Philippines Inc., among the country’s Top 500, listed in the Manila and Singapore stock exchanges. DMPI ranked No. 161 in 2011, 107 in 2012, and 77 in 2013, the three taxable years in question.

Supposedly the BIR had assessed DMPI P21 billion in back taxes for 2011. Absurd, the firm stated. Its revenue that year, audited by BIR itself, was only P16.8 billion, of which P678.3 million was taxable. DMPI never received such notice for P21 billion. On record, what the BIR did assess was a P14.9-million tax deficiency, due to disallowed deductions. DMPI promptly paid the amount, plus interest, on top of an earlier P236 million.

Being both a domestic seller and an exporter, DMPI is subjected to two tax methods. Like 1,200 other such firms, it is also audited yearly by BIR. Starting 2012 the BIR instituted a no face-to-face contact rule on its examiners. While the intention was good – to avert shakedowns of large taxpayers – there was an unintended consequence. Examiners, new because rotated every year so unfamiliar with the subject’s nature of business, would commence any audit from the generalized entries in income tax returns. Only from taxpayers’ subsequent e-mail submissions would the BIR correct itself, and come up with a final assessment. It happens to all 1,200 domestic sellers-cum-exporters.

So for 2012 and 2013 the BIR initially assessed DMPI P3.4 billion and P5.2 billion. The firm submitted details. BIR acknowledged miscomputations of gross versus net sales, cost of sales, VAT, wages, and more. Post-audit showed DMPI’s taxable incomes to be P1.6 billion in 2012 and P1.8 billion in 2013, for which taxes of P409 million and P535 million correctly were paid.

DMPI execs are wondering why they’re being singled out among the 1,200 like firms. They come from various reputable multinationals; it’s not as if they assembled to defraud the Philippine government; stockholders in Manila and Singapore would hang them for that.

Still, a BIR outsider is suing Dulay before the Ombudsman for plunder, a rap the former also filed against Dulay’s many predecessors, to no avail. The House of Representatives is to grill Dulay, who is confident with DMPI's figures. The deputy who is sniping at him will have to rustle up more solid cases than that from the outsider.

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