Finance Secretary Carlos Dominguez III on Wednesday ordered the Bureau of Internal Revenue and the Bureau of Customs to run after more “big fish,” as the government intensifies its campaign against tax evaders.
Dominguez gave the marching orders to the heads of the two agencies to work closer together in catching more “big fish” who were cheating the government of billions of pesos in taxes following the government’s successful campaign against cigarette manufacturer Mighty Corp., resulting in the biggest tax haul ever from a single entity in history.
Dominguez’s directive came on the heels of President Duterte’s order in his second State of the Nation Address to accept Mighty Corp.’s settlement offer of P25 billion, representing its deficiency excise and income taxes, along with the voluntary shutdown of all its operations.
“You better line up another big one. Next year, if possible, catch somebody, another big fish,” Dominguez told BIR commissioner Caesar Dulay and Customs commisioner Nicanor Faeldon at the recent DoF executive committee meeting.
“People should pay attention to paying their taxes, because we are serious about doing it… We are not out for publicity, like some other administration. We are out for big amounts. I mean, our time is limited so let’s go for the big ones,” Dominguez said.
Dominguez said another P20 billion or P30 billion would be “a good target” for the BIR and BOC to make in running after tax cheats.
Dominguez earlier said the government’s total take from Mighty Corp.’s settlement offer was expected to reach P30 billion, including the value-added tax to be paid from the sale of Mighty’s assets to
global cigarette manufacturer Japan Tobacco International.
JTI, which will acquire Mighty’s assets and distribution network, agreed to provide an interim loan to Mighty to pay off the latter’s tax liabilities.
Dominguez attributed the success of the government’s campaign against Mighty to the close coordination and exchange of information between Dulay and Faeldon.
“We all work as a team. It’s not one or the other, it’s everybody together,” he said.
A manager’s check amounting to P3.44 billion, covering Mighty’s excise tax liabilities, was issued on July 20 by JTI and deposited at the SSS branch of the Land Bank of the Philippines in Quezon City. The amount represented the initial tranche of Mighty’s settlement offer.
The balance of P21.5 billion will be paid on or after the closing of the proposed deal with JTI, which was up for approval by the Philippine Competition Commission.
Dominguez welcomed the president’s acceptance of Mighty’s offer and his SONA statement that the settlement “does not preclude other criminal charges” against Mighty that the BIR may decide to file
against it.
Dominguez agreed with the president that the civil settlement would spare the government a long-drawn out court battle that could take years to resolve.
After three criminal complaints filed by the BIR against it for non-payment of excise taxes and possession of counterfeit cigarette tax stamps, Mighty offered to shutter its business and settle its
deficiency excise and income taxes.