Gov’t should not shame one firm to favor another

 / 12:15 AM March 07, 2017

Inquirer columnist Ramon Farolan, quoting from a book written by Singapore Ambassador Kishore Mahbubani, enumerated on Monday what made the late Singapore elder statesman Lee Kuan Yew great.

“Among Lee’s traits was being guided by deeply held values.

“In the early days of Singapore, corruption was a scourge. [Lee] and his colleagues were able to overcome this problem because they led by example. They did not take a penny while in office.

“[An] example of the steel in [Lee’s] spine was an event in 1996, when American teenager Michael Fay was convicted of vandalism and sentenced to five lashes of the cane. Most countries thought Singapore would falter under American pressure. Lee stood firm and proceeded with the caning.”

President Digong may not be an intellectual giant like Lee Kuan Yew, but he is street-smart and has the same traits mentioned earlier.

Mano Digong has made an example of Peter Laviña, his spokesperson during the election campaign, by dismissing him as chief of the National Irrigation Administration (NIA) over a “whiff of scandal.”

The President refuses to give in to pressure from international groups and the Catholic Church for his unorthodox method of dealing with the scourge of drugs and criminality.

If Mr. Duterte continues to stay the course in running the country, the Philippines will be on the road to First World status by the end of his term.

If the President didn’t spare Laviña, one of the officials closest to him, from the boot, then he won’t hesitate to fire others who don’t adhere to his “change is coming” policy.

All he has to do is look closely at what’s happening in the Bureau of Internal Revenue (BIR), Bureau of Customs, Bureau of Immigration, Land Transportation Office, Land Transportation Franchising and Regulatory Board, and Department of Public Works and Highways.

Unlike at the NIA, the scandals in those agencies are nauseating.

* * *

It should not be the policy of the government to persecute and shame one company to favor another.

Mighty Corp., a homegrown firm, has lately been the subject of so much bad publicity.

If the cigarette company has placed fake BIR stamps on its products and evaded paying taxes, it should be penalized with fines over and above the taxes it owes the government.

But for the government to close down the company for alleged tax evasion just to please its rivals is like a father playing favorites among his children.

(By the way, why is the customs bureau involved in going after Mighty Corp. when the company has not violated customs laws?)

Clint Aranas, BIR’s deputy commissioner for legal affairs, is a level-headed official.

“The BIR is primarily responsible for running after tax evaders and will exert its best to collect taxes due the government. Mighty Corp. is just one of those companies under investigation for possible tax liabilities,” Aranas said.

“The power of taxation carries with it the power to destroy, that is why we should exercise it with caution and integrity,” he added.

Read more: 
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook

Duterte willing to let Mighty Corp. off the hook for P3B

President Rodrigo Duterte is ready to settle the tax case of Mighty Corporation if the cigarette manufacturer would pay double the excise tax the company failed to remit.

Duterte told reporteres in Davao del Sur on Thursday that Mighty Corporation should pay P3 billion for the rehabilitation of hospitals in the country.

“Ako, kalimtan ko na pero ang iyang gi-imprinta, 1.5 billion of the fake stamps. Ako, musugot ko ani. Doblehun niya, kalimtan ko na. Anyway, akong saad sa iya na if someone in power pursue, I can always pardon him,” he said, referring to Mighty Corporation president Alex Wongchuking.

[I will forget about the printing of 1.5 billion worth of fake stamps. I will agree to this: Pay double, I’ll forget about it. Anyway, I assure him that if someone in power pursues the case, I can always pardon him.]

“Pero mao ni ang sabot. Ang iyang offer na 1.5, dili gyud na acceptable sa ako. Naay binuang eh. So, muhatog siya ug doblado. Himuon niya ug three billion. Ihatag niya ang one billion sa Basilan. Didto idiretso niya, ayaw sa ako, idiretso niya sa Secretary of Health, kay ipaayo nako ang ospital didto. One billion sa Jolo kay ipaayo pud nako ang hospital didto. Unya sa Manila, Mary Johnstone sa Tondo, one billion. Three billion, areglo mi. Igna siya,” he added.

[Here’s the deal. He offered 1.5, which is definitely unacceptable to me. There was deceit. So, he needs to give double. He should offer three billion. He should give one billion for Basilan. He should give it directly to the Secretary of Health, not to me, because I want to fix the hospital there. One billion for Jolo because I also want to fix the hospital there. Then in Manila, one billion for Mary Johnston Hospital in Tondo. Three billion and we’re settled. Tell him.]

Duterte explained that the law said that tax cases can be settled.

“Ani akong proposal sa iyaha. Ingon sa iyang abogado, tax evasion. Ingon ko nga falsification. But if it was part of the tax evasion case, musugot nalang ko. Tax cases can be compromised. Pwede aregluhin, basta tax liability lang. Kanang buwis buwis, dayon wala ka kabayad, tinuyo man o dili, pwede na nimo maareglo. Ang balaod nga nitugot ana nga naay areglo, compromise. That’s the word of the law.

[This is my proposal to him. His lawyers said tax evasion. I said falsification. But if it was part of the tax evasion case, I will agree. Tax cases can be compromised. It can be settled if it’s only tax liability. When you failed to pay your taxes, intentionally or unintentionally, you can settle it. The law allows settlements, compromise. That’s the word of the law.]

In his speech before local officials in Davao City, Duterte said that the deal with Mighty Corporation would be on if Finance Secretary Carlos Dominguez, Customs Commissioner Nicanor Faeldon, and Internal Revenue Commissioner Caesar Dulay would agree with it.

But Duterte said that there are some businessmen who told him that P3 billion is not enough.

Duterte on Wednesday revealed that he ordered the arrest of Wongchuking for economic sabotage. But Wongchuking met with National Bureau of Investigation (NBI) Director Dante Gierran and Justice Secretary Vitaliano Aguirre II on the same day. —NB/KG, GMA News

– See more at:





Gov’t printer says fake tax stamps rap baseless

The state-run printer that churns out the tax stamps being affixed to cigarette packs said on Thursday that it had nothing to do with the proliferation of fakes that was depriving the government of billions of pesos in foregone revenue.

APO Production Unit Inc. chair Mike Dalumpines said allegations that security was lax in the high-security printing plant was “baseless.” APO is an attached agency of the Presidential Communications Operations Office (PCOO).

Dalumpines was referring to a Bureau of Internal Revenue (BIR) report in December, which, he said, was “also incorrect.”

Task force investigation

The BIR progress report on the investigation of a task force looking into APO’s alleged overprinting of the internal revenue stamps being affixed to cigarette packs pointed to lapses in ensuring no fraudulent activity in the tax stamp production.

The report, dated last Dec. 19, noted that while stamp production was done 24 hours a day, seven days a week, the task force found that a full-time revenue officer on the premises was present only  during office hours.

Also, it said a “significant number” of stamps were eventually declared “defected” [defective] by APO, but internal control measures were lacking to determine where these defective stamps went, the report said.

From 2014 to 2016, a total of over 13.5 million stamps were declared “defected,” although further investigation showed that the actual number could climb to 37.4 million, according to the report.

‘Bad orders’

There were also so-called “bad orders” that cigarette manufacturers returned but still kept within APO premises.

In its investigation of the proliferation of fake stamps, the task force found that “several QR codes found in the fake stamps were observed to be regenerated or, in layman’s term, reused multiple times.”

A QR code is a two-dimensional barcode containing a unique identifier code printed on the tax stamp pertinent to the single cigarette pack bearing the stamp. Hence, a tax stamp ideally bears a unique QR code.

Regenerated codes

According to the report, “the QR codes that were regenerated multiple times were traced or belongs to only one company, Mighty Corp.”

The task force also found that Asa Color Trading Corp., which supplies the silver ink being used by APO in the tax stamps’ silver strip, also supplied Mighty’s ink.

Also, United Graphic Expression Corp., which is the contract supplier of base printing of tax stamps to APO, is also Mighty’s supplier.

In February, Presidential Communications Secretary Martin Andanar said he had instructed APO “to help the BIR in its investigation” of Mighty as well as other cigarette firms that allegedly use fake tax stamps.

Read more:
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook





Lookout bulletin issued vs Mighty Corp. owners

The Department of Justice (DOJ) has issued an immigration lookout bulletin order against the owners of Mighty Corp. amid accusations of bribery, tax evasion and smuggling.

Justice Secretary Vitaliano Aguirre 2nd ordered the Bureau of Immigration (BI) to check the movements of Alexander Wong Chu King and Caesar Dy Wong Chu King.



In a memorandum dated March 7, the DOJ chief mandated the BI to inform him or Prosecutor General Victor Sepulvida if the Wong Chu King brothers leave the country.

However, the camp of Wong Chu King immediately gave assurances that they have no plans of leaving the country.

In a telephone interview, Sigfried Fortun, legal counsel of Wong Chu King, said his clients are ready to face any complaint that will be filed against them.

“My clients do not intend to leave the country. They are ready to face any possible complaints. But as of now, there is no complaint filed against them. (The LBO) This is part of the entire process,” Fortun said.

An LBO is different from a court-issued hold departure order (HDO) because persons covered by an LBO are not restricted from leaving the Philippines. However, they have to ask permission from the DOJ secretary before he can be allowed to leave the country.

P3 billion

President Rodrigo Duterte on Thursday said he is willing to settle the tax evasion case against Mighty Corp. if it will pay the government double its tax liabilities.

Speaking to reporters in Davao del Sur, the President said company should pay P3 billion for the rehabilitation of hospitals in the country.

“I will forget about the printing of 1.5 billion worth of fake stamps. I will agree to this: Pay double, I’ll forget about it. Anyway, I assure him that if someone in power pursues the case, I can always pardon him,” Duterte said, referring to Mighty Corporation president Alex Wong Chu King.

“Here’s the deal. He offered 1.5 (billion), which is definitely unacceptable to me. There was deceit. So, he needs to give double. He should offer three billion,” he added.

The President said Wong Chu King should give the money to the secretary of health.

“He should give one billion for Basilan. He should give it directly to the Secretary of Health, not to me, because I want to fix the hospital there. One billion for Jolo because I also want to fix the hospital there. Then in Manila, one billion for Mary Johnston Hospital in Tondo. Three billion and we’re settled. Tell him,” he said.
The Chief Executive explained that tax cases can be settled under the law.

“This is my proposal to him. His lawyers said tax evasion. I said falsification. But if it was part of the tax evasion case, I will agree,” Duterte said.

“Tax cases can be settled. When you failed to pay your taxes, intentionally or unintentionally, you can settle it. The law allows settlements, compromise,” he added.






Ex-BIR chief defends cigarette tax stamp system

Don’t blame the Aquino administration for the proliferation of fake cigarette tax stamps, former Internal Revenue Commissioner Kim S. Jacinto-Henares said on Tuesday, as the Duterte administration looked into alleged tax arrears of homegrown manufacturer Mighty Corp. since 2013. 

“Everyone should not forget that it was during our time that the tax stamp system was implemented, although this has been mandated since 1998. The system’s objective is to monitor and detect and provide evidence of cigarettes introduced into the market without the proper taxes being paid,” Henares said in a statement.

She was referring to the Internal Revenue Stamps Integrated System (Irsis) on tobacco products, which has been implemented since late 2014 to ensure the collection of correct excise taxes.

BIR investigation

“And this is precisely what it (Irsis) is doing now—telling the government when taxes are not paid and who are not paying,” she said.

The BIR is investigating Mighty for millions of cigarette packs bearing counterfeit tax stamps, which deprives the government of revenue.

In a report last December, a BIR task force pointed to a number of lapses in ensuring no fraudulent activity during tax stamp production by state-run printer APO Production Unit Inc., an attached agency of the Presidential Communications Operations Office.

“Any system is always subject to attack that is why the agreement we entered into with APO requires that the design be changed every three years or sooner if there is evidence of 10 percent fraudulent stamp in the market. And it is precisely because of this that there was an agreement to implement a change of design effective July 1, 2016,” Henares said.

Security features

Finance Secretary Carlos G. Dominguez III earlier noted that eight of the 10 security features of the current tax stamps had already been copied by counterfeiters.

Dominguez said the Department of Finance (DOF) was supporting the BIR plan to roll out new tax stamps with better security features, which could be more expensive, by the second half of the year.

As to insinuations that the BIR during the Aquino administration did nothing to stop Mighty’s alleged practice of using fake tax stamps, Henares said “the complaint we received was based on an extrapolation of a market survey, which is not evidence that can be used in court.”

CCTV footage

“Despite this, we put a CCTV surveillance at the factory of Mighty, the only cigarette company we placed a CCTV system on. For a time we also had revenue officers on-premise on a 24-hour basis to closely monitor Mighty’s factory. We also audited Mighty and assessed them deficiency taxes,” she added.

During a recent meeting among cigarette industry stakeholders, Mighty representatives complained of being “singled out” as it was the lone firm being monitored through CCTVs.

“We expect nothing but fairness” moving forward, the company said.

Henares said the BIR under her leadership was cautious so that any investigation against Mighty could not be taken advantage of by its competitors.

“At that time, based on the survey by the World Bank, the weighted [weekly] presence of the stamp in cigarettes went up to as high as 99 percent, which also refuted the veracity of the complaint. We received a lot of complaints, and we had to evaluate which were valid as we did not also want to be used as a tool of taxpayers to destroy their competitors,” she said.

World Bank data on the DOF website showed that compliance with the rule requiring tax stamps to be affixed to all cigarette packs dropped to as low as 75 percent last September, down from the compliance rates of more than 90 percent between December 2015 and August 2016.

On Friday, Dominguez said the tax evasion case being readied against Mighty would push through as the government computed all of the company’s unpaid excise taxes. “We will file a case because it’s our duty,” he said. —BEN O. DE VERA

Read more: 
Follow us: @inquirerdotnet on Twitter | inquirerdotnet on Facebook




Dominguez denies Faeldon caught accepting bribes from cigar firm

by Chino S. Leyco

Finance Secretary Carlos G. Dominguez III denied reports that he caught Customs Commissioner Nicanor Faeldon accepting bribes to harass a local cigarette manufacturing firm.

According to Dominguez, he fully supports Faeldon in his ongoing campaign against unscrupulous cigarette companies engaged in the proliferation of fake tax stamps in the country.

“The Bureau of Customs, headed by Nick Faeldon, [and] in cooperation with the BIR [Bureau of Internal Revenue] yielded us for the first time hard evidence on Mighty’s violation of the law,” Dominguez told reporters, referring to Bulancan-based Mighty Corp.

“I support Faeldon 100 percent,” Dominguez said when asked if he has full trust and confidence in the Customs chief.

On Friday, reports circulated that Dominguez allegedly caught Faeldon accepting bribes from a multinational cigarette company to harass a homegrown tobacco manufacturer.

In his remarks at the recent general membership meeting of the Philippine Chamber of Commerce and Industry (PCCI), Dominguez lauded Faeldon and BIR Commissioner Caesar Dulay for their efforts to catch those companies engaged in illicit trade.


The petition for preliminary injunction filed by cigarette firm Mighty Corp. against the Bureau of Customs (BOC) was raffled anew yesterday after the original judge voluntarily inhibited from handling the case.

The civil case has been assigned to the sala of Judge Noli Diaz of Manila Regional Trial Court (RTC) Branch 39.

Judge Tita Bughao Alisuag of RTC Branch 1 inhibited herself from handling the case due to the administrative complaint filed against her by the BOC at the Supreme Court.

In a complaint filed on March 13, the BOC accused Judge Alisuag of gross ignorance of the law for issuing a temporary restraining order (TRO) in favor of the embattled cigarette firm.

“This Court’s Presiding Judge, who have been libeled and pilloried before the public’s eye as corrupt with threat of ‘tokhang,’ hereby voluntary recuse from handling this case,” the two-page order read. (With a report from Cris G. Odronia)





By: Gina Mape

APRUBADO kay dating Pangulo at ngayo ay Manila Mayor Joseph “Erap” Estrada ang P15-B tax deal na inaalok ng Pangulong Rodrigo Duterte sa mga may-ari ng Mighty Corporation, gumagawa ng Mighty Cigarrette.

Ayon kay Estrada, walang masama sa alok ni Pangulong Duterte sa may-ari ng Mighty Corporation na magbayad na lang ng P3 bilyo,  na kalauna’y tinaas niya sa P15 bilyon kapalit ng mga kasong kriminal na kinakaharap nito.

Sinabi ni Estrada na maging siya ay gagawin niya ito sa Maynila upang masingil ang mga kumpanyang hindi nagbabayad ng buwis upang makalipon ng pondo para sa mga programang pang-mahirap ng pamahalaang lungsod.

Why not? Put it to good use. People will benefit from it,” sagot ng alkalde ng Maynila nang tanungin kung gagayahin niya rin ang desisyong ito ni Duterte na pagbayarin na lang si Alex Wongchuking, ang may-ari ng Mighty Corporation na nahaharap sa bilyun-bilyong pisong tax evasion at economic sabotage na mga kaso.

Ligal naman aniya ito, ani Estrada, at malaking pakinabang pa nga sa gobyerno upang makalikom ng sapat na pondo para sa mga programa nito, partikular na para sa mahihirap.

Sa Maynila, marami aniya ang mahihirap, ayon sa pag-aaral ng University of the Philippines (UP) na nagsabing isa ang Maynila sa mga lungsod na may mataas na unemployment rate.

Una nang sinabi ni Duterte na payag siyang ipawalang-sala si Wongchuking pati ang kapatid nitong si Caesar kapag nagbayad sila ng P3 bilyon, na kalauna’y tinaas niya sa P15 bilyon sa payo na rin ni Finance Secretary Carlos Dominguez.

Ayon sa Pangulo, gagamitin ng pamahalaan ang perang ibabayad ng Mighty sa pagpapaayos ng mga ospital sa Sulu, Basilan, at Maynila.



Speaker Backs Duterte’s Call for Tax Settlements

by Ellson Quismorio

House Speaker Pantaleon Alvarez has virtually backed President Duterte’s preference to accept out-of-court settlements for big and potentially long and arduous tax cases involving major companies.

According to Alvarez, Duterte himself should be allowed to decide on the matter.

It should be noted that the President has acknowledged that he has yet to get Bureau of Internal Revenue (BIR) Commissioner Caesar Dulay and Department of Finance (DOF) Secretary Carlos Dominguez on board with his idea.

“That’s the Executive’s decision,” Alvarez said when asked if Dulay and Dominguez should accept Duterte’s proposal, which is born out of practicality.

Alvarez and Duterte serve as secretary-general and chairman, respectively, of ruling party Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban). The two Dabawenyos have also been friends for two decades.

Duterte’s favoring of reasonable tax case compromises first became headline when he said that embattled tobacco company, Mighty Corp. could just pay P3 billion to the government to settle its tax woes.

Authorities had just filed a P9.6-billion tax evasion case against Mighty for its alleged use of fake excise tax stamps on its cigarette products.

Duterte has since expanded his statements to cover similar cases in the future, pending the concurrence of the BIR — the filer of the case — and the DOF.

And based on his statement, Alvarez seems to have no problem with it.


Na-inspire: Erap to copy Digong’s Mighty out-of-court settlement offer

Manila Mayor Joseph “Erap” Estrada sees the wisdom in President Rodrigo Duterte’s move to offer a P3-billion – and later increased to P15 billion – out-of-court settlement with tobacco firm Mighty Corp.

In fact, Estrada said he is also amenable to doing the same thing in Manila to secure needed funds from huge companies and corporations that have been cheating the government in tax payments.

“Why not? Put it to good use. People will benefit from it,” the Manila mayor pointed out when asked if he would replicate Duterte’s settlement offer with Mighty Corp. owner Alex Wongchuking, who is facing multi-billion-peso tax evasion and economic sabotage charges.

Estrada said the out-of-court deal being proposed by Duterte is permitted under the law and would even be advantageous to the government in compelling big-time tax evaders pay for their tax dues.

The money could then be used to fund anti-poverty programs.

“E, saan mo ilalagay ‘yung pera? Kaysa mabulsa ng iba? Because you will always think as a leader, always put the greater good of the greatest (sic) number. Sino ang greatest number? ‘Yung mahihirap,” stressed the former president.



Duterte open to compromise with big-time tax evaders

by Genalyn D. Kabiling

President Duterte is open to forging “reasonable” compromises with big-time tax evaders rather than be embroiled in a long court battle.

The President, speaking to an assembly of Filipino-Chinese businessmen in Pasay City, said he prefers to get the revenues now than wait for years in court litigation.

“The law allows a compromise and I will allow compromises rather than the other party filing a case, from the Court of Tax Appeals, to the Supreme (Court), to the Court of Appeals. It will be decided 10 years from now,” he said.

“I need the money now, not when I’m not around. But it must be a reasonable one, for those big tax cases,” he added.

The President, however, said he has yet to convince Finance Secretary Carlos Dominguez III and Bureau of Internal Revenue chief Caesar Dulay to allow settlements of big tax evasion cases.

“It is not unlawful for me to suggest this because rather than you know, if you choose to fight it in court, and it is a very slow process, I would rather that a compromise,” he said.

“No particular party, maski sino yan. We can enter into a compromise. I’m suggesting it so I can use the money,” he added.

Duterte recalled that he was willing to settle the tax case of Mighty Corp. for P3 billion so he could upgrade public hospitals in some parts of Mindanao and Metro Manila. But he said Dominguez opposed his proposal since the tobacco firm must pay at least P9 billion in taxes and fines.

The BIR recently filed a P9.56-billion tax evasion case against Mighty Corp. following the discovery of fake stamps on tobacco products.

Meantime, the President called on the Filipino-businessmen to pay the right taxes and shun any extortion attempt by revenue collectors.