Dominguez to BIR: Make tax-paying more convenient

DAVAO CITY, Philippines — Finance Secretary Carlos Dominguez III has directed the Bureau of Internal Revenue (BIR) to make the process of paying taxes more convenient as he lauded the agency for pursuing reforms that have improved its revenue collections by almost 12 percent thus far this year.

At the same time, Dominguez said he expects the BIR, through its stepped-up joint efforts with the Bureau of Customs (BOC), to continue running after big-time tax dodgers “with hammer and tongs”—like what it had done with Mighty Corporation, which led to a tax settlement of over P25 billion, the country’s largest sum ever collected from a single corporate entity.

“Beyond helping improve revenue collections, the case of Mighty Corp. sends a clear and resounding message to other corporate entities that fudge the numbers and befuddle the books. The revenue agencies will go after them with hammer and tongs,” Dominguez said at the recent BIR Annual Planning Session.

Mighty Corp., a cigarette manufacturer based in Bulacan, had offered to settle its tax liabilities for P25 billion and shut down its operations after the BIR filed several complaints for its use of counterfeit tax stamps before the Department of Justice. It sold its assets to Japan Tobacco Inc. (JTI), which enabled the government to collect even more taxes from VAT and other fees, bringing the total haul from the Mighty settlement to about P30 billion.

Moreover, excise tax payments from Mighty’s cigarette brands registered an increase of over 200 percent in the September-October 2017 period alone since JTI took over the firm’s operations.

The year 2017 is an “extraordinary” one for the BIR, owing largely to this achievement, said Dominguez in his speech that was read for him by Finance Assistant Secretary Mark Dennis Joven at the BIR planning session, which was held at the Clark Freeport Zone in Angeles City, Pampanga.

“The crackdown on Mighty Corp. will have to be credited to the vigilant and unyielding effort of our revenue agencies. I look forward to other accomplishments like this one in the coming months,” he said.

Dominguez noted that besides this remarkable accomplishment, the BIR was also able to generate an “impressive” collection rate of 11.84 percent in the first three quarters of the year, and a goal attainment rate of 96.96 percent by continuing to implement tax administration reforms aimed at broadening the tax base, updating the schedules of zonal values, expanding the options for payment of taxes and simplifying tax forms.

“Let me congratulate Commissioner Caesar Dulay, the deputy commissioners and the officers of the BIR for the good work you have put in. I urge you to sustain the effort at completely modernizing tax administration in the country,” Dominguez said.

Dominguez said the BIR “must exert every effort not only at making the agency more efficient at what it does but also making the collections process more convenient for our clients, the taxpayers.”

“Paying taxes is painful enough for many of us. Let us minimize inconveniences in the process,” he said.

The finance chief earlier directed the BIR and BOC to jointly create regional task forces to unify and beef up their anti-smuggling operations in the provinces.

Dominguez said he wants the BOC and BIR to strengthen their cooperation at the regional level against anti-smuggling activities, considering that most of the illicitly traded goods entering the country are being sold outside Metro Manila.

Hundreds of thousands of cigarette mastercases bearing the Mighty brands were seized by a composite team of BIR and BOC agents in raids in Pampanga, Bulacan and General Santos City in March this year for using fake tax stamps.

These seized items were used as evidence in the complaints filed by the BIR against Mighty before the DOJ, which has since been withdrawn after the government accepted the cigarette firm’s offer to settle its deficiency taxes.

Last month, representatives from the BIR and other government agencies witnessed the destruction in Davao City of some five million packs of cigarettes worth an estimated P142.44 million, all bearing the brands sold by Mighty Corp. that were seized earlier this year in Mindanao for having counterfeit tax stamps.

A second batch of Mighty cigarettes, this time worth P3.316 billion, which were also confiscated for bearing fake tax stamps, were destroyed recently in Norzagaray, Bulacan.

Dominguez said the destruction of these cigarettes in Davao and Bulacan are meant “to deliver the strong message that “tax evasion does not pay.”