Just last month, the Bureau of Internal Revenue announced that it has filed criminal cases against the owners and officers of St. Gerrard Construction Gen. Contractor & Development Corp. for failing to file as much as P7.1 billion in taxes from 2018 to 2021.
Multiple tax charges were filed against Pacifico “Curlee” Discaya II, Rowena “Sarah” Discaya and a corporate officer of St. Gerrard due to unpaid income taxes, excise taxes on nine luxury vehicles and documentary stamp taxes on their supposed divestment from four Discaya-owned construction firms.
BIR Commissioner Romeo Lumagui Jr. revealed that this is merely the tip of the iceberg and more tax evasion cases will be filed as soon as the bureau has all the information that it needs.
The BIR chief said that the bureau would continue its audit of Discaya-owned construction firms and if it discovers that more taxes have not been paid, then it will continue to file tax charges. The same is true for other contractors and public officials involved in anomalous flood control projects, Lumagui added.
Meanwhile, the BIR just last Thursday filed tax evasion complaints against former Department of Public Works and Highways engineers Henry Alcantara, Brice Hernandez and Jaypee Mendoza involving billions in unpaid tax liabilities.
The BIR and the Anti-Money Laundering Council (ALMC) as early as September have announced that they will jointly investigate firms and persons involved in anomalous flood control projects in relation to the tax fraud audit of these companies and individuals. This is to ensure that all revenue streams and assets of those involved would be accounted for.
The AMLC has the power to require the submission of bank reports on those suspected of being engaged in money laundering. These bank reports and transactions can be analyzed side by side with these persons’ tax returns and payments in conducting a tax fraud audit. If the wealth of the contractor or individual as stated in bank records does not have corresponding tax payment, then there is a case for tax evasion.
The BIR is also in coordination with other agencies, including the DPWH, Commission on Audit, Land Registration Authority and the Land Transportation Office.
In the case of Alcantara, Hernandez and Mendoza, the BIR commissioner said that it conducted a lifestyle check and looked into their sworn statement of assets, liabilities and net worth (SALN) and found that their acquired luxury vehicles, high-value properties and other personal assets were grossly disproportionate to their declared sources of income.
By just focusing on these high-profile individuals and companies which have so far been linked to anomalous DPWH flood control projects, one can easily see that tens of billions of pesos in taxes and duties escaped government tax collection efforts.
And all this time, our government has been coming up with ways to shore up its income by raising taxes or creating new income streams in the form of new taxes imposed upon honest paying citizens.
How unfair is that, especially for those who have been diligently paying what is due the government.
As of 2024, individuals earning between P250,000 and P8 million annually are levied an income tax rate of between 15 and 30 percent of their taxable income and for those earning more than P8 million annually, as much as 35 percent. The income tax rate on domestic corporations, meanwhile, is at 25 percent in general.
As much as 30 percent of our income goes to taxes. For compensation income earners, these taxes are withheld by their employers so there is no room to evade paying their obligation. But for those making millions, if not billions of pesos in earnings, there is too much room for evasion.
Smugglers of excisable products continue to get away with not paying the correct duties while legitimate businessmen have to suffer from increasing excise taxes on their products.
Recently, Finance Secretary Ralph Recto told a Senate budget hearing that the estimate for leakage this year due to smuggling could be as much as P150 billion. This figure refers to the potential revenue losses on the part of the Bureau of Customs covering foregone collections from general merchandise and oil and does not include losses on the part of the BIR due to smuggling.
Our tax system is of the progressive type, meaning that individuals with higher incomes pay a higher percentage of taxes on their incomes compared to those with lower incomes. This progressive tax system is based on the “ability to pay” concept, meaning those with greater financial resources can afford to contribute more to public services.
Unfortunately, many of those with greater financial resources are the ones who escape paying taxes.
The average income earner cannot continue to pay for their sins and omissions.
Those honestly paying their taxes are seeing their hard-earned money lining the pockets of these corrupt individuals and entities.
Whistle blowing should be encouraged even more. Anyone connected with the government or who contracts with the government especially should be under the watchful eye of the taxpayers. There has got to be a way to make whistle blowing easier and safer for everyone. Each and every agency of government should maybe have a social media page and hotline dedicated to receiving anonymous tips and leads from concerned citizens. But it should not stop there. The complaining citizen should get a response and an update on the investigation as promptly as possible and within a specified and committed period of time. No one should be spared.
Public officials and employees should have the burden of proving that what they own was not stolen from us and not the other way around. After all, it’s the people’s money that we are talking about.
Getting everyone involved in this fight and a firm resolve on the part of the government to end it is the only way to stop corruption.
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