MANILA – “The best weapon to deter tax evasion is to file criminal cases against the prominent tax evaders and send them to jail.” Watchdog group Action for Economic Reforms (AER) made this stand Tuesday, as it urged the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to file a criminal case against a prominent tax evader like Mighty Corporation.
AER, which supports the comprehensive tax reform, said filing the charges “will also be a way for government to live up to its commitment to reform the tax system.” AER has been supportive of the Duterte administration’s tax reform package, billed Tax Reforms for Acceleration and Inclusion (TRAIN).
“Filing criminal charges is a credible signal that government is serious about tax administration, which will complement the tax policy measures that require legislation,” said Jo-Ann Diosana, AER’s senior economist.
“We hope that Finance Secretary Carlos Dominguez and BIR Commissioner Caesar Dulay will take this bold step to show that the government is serious in fighting tax evasion.” said Diosana.
The DOF had said earlier that the settlement of the tax obligations of Mighty – estimated to amount to about P30 billion – will significantly boost the national coffers at a time when the government is meeting unexpected costs of several calamities, including the expected huge cost of rehabilitating Marawi, under siege from terrorist groups led bye Mautes since May 23.
Earlier on Tuesday, Japan Tobacco Inc. (JTI) had informed Japanese regulators of its intent to acquire Mighty Corp. for $936 million.
“We appreciate the effort of the DOF and BIR for nailing the cigarette manufacturer Mighty for tax evasion and imposing a heavy fine on the company. This should serve as lesson for all those engaged in illicit trade and tax evasion. However, learning from similar experiences here and abroad, we believe that the principal instrument to deter tax evasion is by filing criminal charges against prominent tax evaders and having them jailed through due process,” explained Diosana.
AER, along with other health groups and civil society organizations, is asking the Senate to increase the tobacco tax and include the tobacco tax in the current deliberations.
AER supports the DOF’s current tax reform proposals. It was instrumental in the mobilization of civil society organizations, medical doctors and other health professionals, in partnership with the DOF and the Department of Health for the passage of the Sin Tax law in 2012.