House sets probe on tax payments of cosmetics firms

MANILA, Philippines -  The House of Representatives will look into the tax obligations of cosmetics and beauty companies.

A resolution filed by Negros Oriental Rep. Arnulfo Teves prompted the inquiry.

“There is considerable disparity between the actual tax being collected from the companies and the taxes they should be paying based on their revenues,” Teves said.

He said he has documents showing that the companies’ tax payments do not match with their huge sales.

There is also great divergence in the profits of similarly situated companies in the cosmetics and beauty products industry, he said.

He added many companies could be understating their revenues or sales to avoid paying higher taxes.  

“The understatement of gross revenues shows possible overstatement of cost of goods sold, understatement of profits and underpayment of taxes. The tax underpayment is to the detriment of government and people,” Teves stressed.

He said he would confront the concerned companies with documents in his possession when the inquiry begins.

He pointed out that the projected probe “should complement the tax reform program being pushed by the Department of Finance (DOF).” 

The DOF proposals are still pending with the House Committee on Ways and Means.

They include the imposition of a P6 tax on diesel, cooking gas, kerosene, and bunker oil for electricity generation, and an increase in the levies on gasoline and other petroleum products.

Earlier, Rep. Rodel Batocabe of party-list group Ako Bicol proposed higher taxes on beauty products and services.

However, he withdrew his proposal in the face of a strong backlash from those to be affected.