Philippines: BIR Compelled to Act on Alleged Cigarette Tax Fraud

Source from:  Philippines News 11/24/2014

A lawmaker demanded yesterday swift action from the Bureau of Internal Revenue regarding published information that a local tobacco firm has been shortchanging government of billions of pesos in taxes which would have been earmarked for public health programs.

Ang Nars Partylist Rep. Leah Paquiz said all other state agencies tasked with raising revenues for government health programs should put their acts together and guarantee legal action against tax evaders.

An intense public health advocate, Paquiz said the BIR should answer accusations of delaying its investigation into charges of tax evasion against tobacco firm Mighty Corporation in connection with the importation of tobacco leaves and acetate tow used for cigarette filters.

"Foot dragging, tax evasion, not collecting the right taxes will surely hamper health programs and services," said Paquiz, who is a member of the House Committee on Health.

The lady lawmaker lamented that the BIR has been concentrating too much on the tax liabilities of workers but has not shown the same level of intensity in getting certain firms like Mighty to pay the correct amount of taxes.

Pointing out that a big percentage of revenues collected from tobacco products is allocated to public health programs, Paquiz said delay or non-collection of said taxes will endanger government's health projects, particularly the on-going battle against diseases associated with cigarette smoking.

"Sin tax will only be able to fund the purposes and goals for which it was enacted if it is collected on time," the partylist solon stressed.
Under Republic Act 5727 was passed by Congress to restructure the previous tax rates imposed on alcohol and tobacco products.
The law also provides that the increase in tax collection from these so-called "sin" products will be used to help fund the Universal Health Care Program of the government.

"The health programs funded through the sin tax will definitely benefit Filipinos if Mighty will be declared to have violated revenue laws, rules and regulations, due to the increase in revenues," said Paquiz.

Meanwhile, Senior Asst. Minority Leader and Isabela Rep. Rodito Albano said it is the duty of the BIR, not Mighty's business rivals, to ensure that it is paying the correct taxes and duties to the government. Enditem