Yesterday we were able to do an interview with Atty. Paola Alvarez, the official spokesperson of the Department of Finance where she talked about – among other things – the Duterte administration’s campaign against tax delinquents. Highlighted by the multi-billion tax case currently being readied against Mighty Cigarettes.
According to Atty. Alvarez, the DOF, in coordination with the Bureau of Customs, and the Bureau of Internal Revenue, has so far raided two warehouses of Mighty where they were able to uncover the company’s use of fake tax stamps in their products.
Atty. Alvarez also revealed that their department is also closely working with the Departments of Education, and Health as the potential taxes that will be collected from Mighty can be used for the medical treatment of indigent patients, as well as for educating younger Filipinos about the dangers of smoking.
This sentiment was also expressed by Sec. Carlos Dominguez himself, when he said that “the current sin tax law was passed to help devote more resources to health care. It is alleged that Mighty has evaded P9 billion worth of taxes, if not more. Imagine how many hospitals, how many surgeries, how many vaccines, how many prescriptions could have been administered with that money and how many lives could have been saved.”
On a side note, I mentioned this to my good friend RJ Nieto, of the Thinking Pinoy blog, and he jokingly said that he owes a lot to Mighty because during the time that he had no money, it was the only cigarette he could afford.
Speaking of money, another potential tax windfall for the government is Atty. Alvarez’s revelation that the campaign against Mighty is just the tip of the iceberg, so to speak. She said that they also have plans to go after the bigger cigarette companies that control more than 90% of the market.
While I am in no way a tax wizard, my simple understanding of the matter is that if a small company like Mighty can owe the government Php 9 billion pesos, then there is the potential that the amount for the other much bigger companies must run in the tens of billions of pesos. That’s enough to substantially improve the health services that the government currently provides for the poor. With a lot left over.
The success of this program lies in the fact that President Duterte is showing himself to be true to his word that there will be no favors and no special treatments. This iron determination to go after those that are taking advantage of the government and the people is something that has been mouthed by other presidents, but is only now being given real substance by Duterte.
It is because of this unbending attitude towards corruption, something that previous administrations were not particularly known for, that the owners of Mighty have apparently already reached out to the government so that they may “fully cooperate with the DOF, BIR, and all other relevant agencies.”
According to a source that contacted Mindanation after watching the interview, a lawyer of the company sat down with a DOF official to start discussions on the taxes due to the Government. This after Mighty wrote the department asking for an audience. “They want to assure the secretary that they are willing to cooperate and face the consequences. Their main concern really, aside from settling their obligations, is the welfare of the company and its employees.”
The company is also banking on an earlier statement made by President Duterte that he prefers a quick settlement of the issue so that the funds may be used for the rehabilitation of several public hospitals under the DOH. A proposal that Sec. Ubial appears to be in favor of.
Whatever the outcome of this case would be – whether it goes to court is si settled amicably – the key issue for me is the difference that a leader with strong political will makes. Gone are the days when money and influence dictated government performance. Now, it is the people’s welfare that comes towards corruption