Speaker seeks probe on Mighty over possible tax liabilities

MANILA, Philippines - Speaker Feliciano Belmonte Jr. wants the joint congressional oversight committee on the Sin Tax Law to look into the alleged tax malpractices of tobacco firm Mighty Corp.

Belmonte noted that poor revenue collections from sin taxes led to the underfunding of key programs.

He cited reports on the alleged failure of the government to fund its universal health care program using proceeds from Republic Act 10351 or “An Act Restructuring the Excise Tax on Alcohol and Tobacco Products.”

The Speaker also cited statements from House members on allegations against tobacco companies evading taxes.

“I’d like to find out what happened to sin tax collections. Because it’s really the affair of the BIR (Bureau of Internal Revenue) but we’re not hearing from it. But Congress, which has initiated the sin taxes, wants to find out,” Belmonte told reporters.

“All of a sudden a small tobacco firm has become a huge company?” he said in the wake of an advertising campaign calling the BIR’s attention to the possible tax liabilities of Mighty.

Enacted in 2012, the Sin Tax Law mandates that 80 percent of the remaining balance of the incremental revenues from the law will be earmarked for the enrollment of the second poorest 20 percent of the population to the PhilHealth.

Earlier, Ang Nars party-list Rep. Leah Paquiz said the House will summon key officials of the Departments of Health and Finance (DOF) and the BIR to report on their efforts to run after tobacco firms evading taxes.

She said the invitation was part of the House’s oversight functions.

Cagayan de Oro Rep. Rufus Rodriguez had filed House Resolution 1591 seeking an inquiry into the government’s failure to allocate funds for the universal health care program from proceeds of the Sin Tax Law.

“Foot dragging, tax evasion, not collecting the right taxes will surely hamper health programs and services,” Paquiz said.

She said the House committees on health, and ways and means, were expected to conduct the joint oversight inquiry into the implementation of the law.

She said the concerned agencies should submit their reports if an investigation would be conducted on Mighty.

The lawmaker said the BIR has been concentrating too much on the tax liabilities of workers but has not shown the same level of intensity in getting tobacco firms to pay the right taxes.

She said hopes of raising enough money to finance universal health care benefitting ordinary Filipinos are slowly fading as a result of the inability of the government to collect the right taxes due to tax evasion schemes being carried out by some companies.

Rodriguez had expressed confidence the inquiry will help plug loopholes in the measure that was expected to create P34 billion in additional revenues for the government.

“After its enactment two years ago, many Filipinos are still not covered by the universal health care program of the government and many cities and provinces are still without public clinics and hospitals,” he said.

“It is incumbent upon the DBM (Department of Budget and Management) and DOF to report to the House of Representatives and provide information on whether the goals of the law were met and where the money was utilized,” he added.