House leader calls on BIR to consider settlement options with firms facing tax raps

By on May 1, 2017


But Ting noted that President Duterte has said that under the Tax Code, government could enter into a compromise deal with companies with unpaid taxes, including Mighty, pending the concurrence of the BIR and the Department of Finance (DOF). (Photo: Bureau of Internal Revenue Philippines/ Facebook)
But Ting noted that President Duterte has said that under the Tax Code, government could enter into a compromise deal with companies with unpaid taxes, including Mighty, pending the concurrence of the BIR and the Department of Finance (DOF). (Photo: Bureau of Internal Revenue Philippines/ Facebook)

MANILA–As the nation celebrates Labor Day, the chairman of the House Committee on Labor and Employment on Monday called on the Bureau of Internal Revenue (BIR) to heed President Rodrigo Duterte’s view for government to enter into an out-of-court settlements with companies facing tax evasion cases to avoid job losses and possible economic repercussions.

Cagayan Rep. Randolph Ting made the call after BIR Commissioner Caesar Dulay threatened to close down Mighty Corporation, the country’s leading and oldest Filipino cigarette manufacturing company, due to billions in unpaid taxes.

Last April 20, the BIR filed a PHP9.5-billion tax evasion case against Mighty Corporation before the Department of Justice (DOJ).

But Ting noted that President Duterte has said that under the Tax Code, government could enter into a compromise deal with companies with unpaid taxes, including Mighty, pending the concurrence of the BIR and the Department of Finance (DOF).

“The President already said that government could deal with them [through out of court settlements}. They should be penalized, but their operations should not be cancelled,” the lawmaker said.

The Cagayan lawmaker warned that closing the company could have economic and employment ramifications.

He also expressed his strong support to Mighty Corporation’s request to continue its operations and sales activities to protect their employees while the DOJ investigates the tax evasion compliant.

“Where will these people go for jobs and livelihood? This (Mighty Corporation) is already an established company and a Filipino firm that has been providing jobs for Filipinos for a very long time, we should not allow their closure,” he said.

“Government officials should look into the repercussions of this BIR plan. I believe that we should even protect this company being a Filipino brand by allowing to correct the concerns raised against them,” Ting said as he noted that the officials of the cigarette manufacturer have been very cooperative and are willing settle whatever standing tax obligations the company may have.

He said that at least 6,000 direct and indirect employees of Mighty Corporation will be affected if BIR goes ahead with its closure threat.

“That would be about 30,000 Filipinos affected if we include the families of the employees who will lose their jobs. Likewise, 55,000 tobacco farmers or 300,000 Filipinos, including their loved ones, are about to be affected,” Ting said.

Other lawmakers, including House Speaker Pantaleon Alvarez, have also voiced support for reasonable out-of-court settlements with big and small firms facing tax evasion cases as a source of “immediate funds” needed for the administration’s pro-poor programs.

Manila Rep. Manuel “Manny” Lopez said funds derived from compromised deals could jumpstart the planned PHP1-billion upgrading of public hospitals.

He cited three public hospitals in Manila that needed financial assistance to boost its medical services to the poor –Ospital ng Tondo, Tondo Medical Center and Gat Andres Bonifacio Medical Center.

Aside from Tondo hospitals, President Duterte said he could use the money to also build hospitals in Basilan and Jolo, Sulu and build a relocation site for thousands of squatters.

“This proposal (compromise deal) is a very good news for my poor constituents. I strongly support it because it will provide immediate relief to indigent patients who are in need of vital health services,” Lopez said.

He said he also supports the earlier position of Speaker Alvarez and former President and now Manila City Mayor Joseph Estrada who endorsed President Duterte’s proposal for the DOF to immediately “put to good use for the benefit of the people” the needed funds rather than go into a legal battle which could take years to resolve.

Alvarez and Estrada has both said that government will be better off getting the taxes due from businessmen now and use these funds for social service projects rather than wait for years to win the tax dispute in court with no guarantee of victory.