EDITORIAL - Abusing tax privileges

More than a year after embarking on a sweeping anti-corruption campaign, the Aquino government still appears bent on pursuing only those suspected anomalies seen to involve former president Arroyo, almost to the exclusion of everything else that stinks.

No wonder his critics call his campaign as just another political witchhunt. To regain the credibility of the promise that swept him into the presidency, Aquino must order his sniffing dogs to look beyond what Arroyo must have hidden under her skirt.

For not everything corrupt ends at the doorstep of Arroyo. Corruption is everywhere else, even in the unlikeliest of places. There are shenanigans even under the cloak of regularity and unless the sniffing dogs of Aquino are particularly attentive, they are bound to get overlooked.

For example, rumors are afoot that privileges in special economic zones such as those we have in Cebu are being abused, to the detriment of government. Specifically, money is reportedly being made out of the special privileges enjoyed by developers undertaking projects within SEZs.

Under the law, real estate developers undertaking construction projects inside SEZs enjoy special tax privileges such as exemptions from payment of a 12 percent VAT on building materials purchased specifically for use on these projects.

But that is as far as the veneer of regularity goes. According to accounts, what really happens is that these developers procure materials way in excess of what they actually need and then unload the excess VAT-exempted materials on the local market, naturally for a huge profit.

These things are, of course, illegal and are not supposed to happen under Aquino’s watch unless with the collusion and cooperation of his sniffing dogs in Cebu, whose sudden and complete loss of olfactory senses deprives his government of much-needed revenues.

Aquino should interest himself in SEZs in Cebu with ongoing development projects and monitor them himself. He just might be surprised by what he finds. Some businesses and projects may be legitimate. But if government privileges are abused, legitimacy flies out the window.

Things are not always what they seem. Lawful businesses can hide illegal sidelines that defraud government, with a little help from friendly but corrupt officials. Aquino should broaden his anti-corruption campaign and start looking where nobody used to give a second look.