In good hands
DEMAND AND SUPPLY - Boo Chanco (The Philippine Star) - February 24, 2020 - 12:00am

I had a very interesting conversation last Thursday with Finance Secretary Sonny Dominguez when I dropped in on him at his office. It confirmed my feeling that our money is in good hands with him as finance chief.

There are those who joke that Sonny is the English-speaking Duterte. Indeed, he has strong views on what his responsibilities are and he is not afraid to exercise his powers to meet his ends.

Remember how he forced Mighty Corp., the cigarette manufacturer with pending tax cases, to not only pay back taxes, but also sell out to Japan Tobacco. Duterte was ready to accept Mighty’s offer of P3 billion compromise agreement until Sec. Sonny vigorously objected.

Government coffers became richer by around P40 billion and henceforth, the Treasury will most definitely get its due in proper tax payments with the new foreign owner. All thanks to Sec. Sonny.

The finance chief commented that he feels better dealing with Philip Morris and now with Japan Tobacco. These foreign manufacturers with an international reputation to protect will not risk the tax evasion schemes of local manufacturers.

But, Sec. Sonny said, his battle with tax evasion among cigarette manufacturers isn’t over. This time, it is with operators who import surplus machines from China that are small enough to produce cigarettes in ordinary warehouses.

Government revenue collectors have to continually raid such operations, burn their production and their machines. Sec. Sonny wants to hold LGUs hosting illegal operations accountable.

Sec. Sonny isn’t one to be trifled with. He has the tenacity of a Doberman who follows up for the kill. Nothing is allowed to get lost in the labyrinth of a corrupt bureaucracy.

Take the POGO situation. Sec. Sonny and I talked about POGO many months ago as I complained about how these folks are not even paying the taxes we pay. He said he realized that and was quietly doing something about it.

Last week, he told me it was tough trying to get PAGCOR, immigration and the labor department to cooperate with the BIR. The finance people had been meeting with these agencies but were continually being ignored.

It came to a point, Sec. Sonny said, that he threatened he will personally see to it they are all fired unless they give DOF the list of POGOs operating here and the names of POGO employees.

 It was disgusting, he said, that none of the said agencies seemed to have a credible number, much less the names of all the operators and employees. Apparently, the labor department delegated the power to grant and extend work permits for POGO workers to immigration.

As for PAGCOR, apparently for every POGO license they give, the licensee can grant sub-licenses. No wonder we lost control of the situation. No wonder no one was cooperating with the DOF. They had a lucrative thing going.

Eventually, because Sec. Sonny won’t let go, they gave a list which wasn’t even in digital form. Again, they had to be threatened by Sec. Sonny to submit the digital list so it can be easily fed to DOF’s computer.

Now, they have a better handle, but still don’t know for sure how many POGO entities and workers are in the country. It is work in progress.

A special team was organized by the BIR to handle POGOs. They raid POGO offices and close them down until they are able to provide lists of employees and pay past due taxes. One entity in Eastwood agreed to pay P1.3 billion after a day of closure.

Not to worry, Sec. Sonny said, because they are still running after the past dues of POGOs even as they are strictly enforcing the tax laws moving forward. That is certainly good news for a change.

But POGOs may soon be a thing of the past. A Chinese language report was monitored over Wechat that Chinese police are revoking passports of those suspected or proven to be working in POGOs.

Our embassy in Beijing has not seen any such news on state media, but feels it is likely true though not to be carried out in one swoop, but in stages. Happy days of property developers will soon be over.

Incidentally, on the San Miguel airport, Sec. Sonny clarifies that he has no power to recall a signed contract. “Once the contract is signed,” he said, “I no longer have any say in it… It is up to the concerned agency to implement it.”

Oh well… I found out that the contract actually went back to DOJ for a final review. The review is completed and DOJ only made three comments, none of which could be fatal to the contract.

Hopefully, government will help SMC get approvals from entities like DENR and LGUs to prevent any further delays.

But it was in bad taste for DOTr to make the personal tragedy suffered by Ramon Ang the excuse why they have not set a new groundbreaking date. It was also uncalled for to threaten SMC with revocation of its P11 billion performance bond because the ball is still in DOTr’s court.

Anyway, SMC is making use of the waiting time to finalize the detailed engineering design.

Going back to Sec. Sonny, he was saying that after the various tax reform packages are passed by Congress, he won’t have much more to do. I guess he is raring to get back to private life and enjoy the fruits of a lifetime of labor.

But Duterte needs him. The country needs him. He is seen by the business sector as the only thinking adult in the room. If he goes prematurely, our political risk rating will hit the roof. Right now, our money is in his good hands… until Congress misappropriates it for their pork.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco

SONNY DOMINGUEZ
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