AmCham backs Duterte on fight vs smuggling, tax evasion

MANILA, Philippines -  After criticizing the Duterte administration’s war on drugs and tirades against former United States president Barack Obama, the American Chamber of Commerce in the Philippines (AmCham) has expressed its support for the President and Finance Secretary Carlos Dominguez III in their efforts to fight smuggling and tax evasion.

In a statement yesterday, AmCham commended and applauded the current administration’s recent decisive actions to raid stocks of manufactured products with counterfeit internal revenue stamps, thereby promoting corporate tax compliance and ensuring a level playing field for businesses in the country.

AmCham also encouraged the government to proceed with the investigation of the case against Mighty Corp., noting that the recent seizures “may be the tip of an iceberg of tax evasion going back several years.”

“Based on the investigation, we call upon the government to prosecute the case of tax evasion and attempted bribery. Action should also be taken against government officials who may be involved in facilitating the tax evasion. Smuggling of imported goods also occurs for petroleum and other products, many of which are fake goods illegally manufactured abroad and sold in this country,” AmCham said.

“We also strongly question the 20-day temporary restraining order (TRO) prohibiting the (Bureau of Customs or BOC) from conducting further raids against the said local manufacturer of cigarettes,” it added.

There have been reports of tobacco products with fake tax stamps in the country since late last year, according to the group. These stamps could be applied to various brands of products abroad and smuggled into the Philippines without paying correct import duties and excise taxes.

They could also be applied by domestic manufacturers, disregarding Philippine internal revenue regulations, with the country having a history of such tax avoidance schemes, AmCham said.

Early this month, the BOC raided Mighty Corp.’s warehouses in San Simon, Pampanga; General Santos City and Zamboanga. The BOC seized tobacco products and cigarettes with fake tax stamps carrying the Mighty brand, valued at P2.2 billion.

Last week, the BOC seized three more containers carrying Mighty cigarettes at the Port of Cebu and in Tacloban City, Leyte in an operation led by BOC Commissioner Nicanor Faeldon himself. 

“The business community thrives on the rule of law and, at a time when the government is asking for new taxes, it is especially important to strongly enforce existing revenue laws and to expand the tax base. Effective enforcement will encourage potential investors looking to do business in the Philippines and is an essential stepping stone in making the Philippines the next Asian powerhouse economy,” AmCham said.

Mighty to pay P3-B settlement

As this developed, Mighty Corp. has accepted the offer of President Duterte to pay at least P3 billion as settlement for its excise tax liabilities, Justice Secretary Vitaliano Aguirre II bared yesterday.

The Office of the President received the letter of Mighty Corp. owner Alexander Wongchuking signifying his agreement to the offer to pay the amount to be used for building hospitals in Basilan and Jolo, Sulu as well as improving the Mary Johnston Hospital in Manila, according to Aguirre.

But Duterte has said the finance department wants an amount that’s “10 times over” the P1.5 billion initially quoted as Mighty’s tax deficiency. – With Edu Punay, Mary Grace Padin, Evelyn Macairan, Paolo Romero