Plugging tax leaks

Several studies including one conducted by the Bill and Melinda Gates Foundation with Bloomberg Philanthropies in 2007 revealed that the Philippines is No. 6 in the list of top countries having the biggest illegal trade of tobacco. A 2008 report by Euromonitor International (which determines lost government revenues due to illegal trade of tobacco products) confirmed that the illegal trade of cigarettes will continue to grow in the Philippines despite government efforts to apprehend distributors of contraband cigarettes. From 2006 to 2008, the leakage rate in tobacco products in the country was estimated at 63.8 percent according to a study by Dr. Emilio Antonio, with the losses amounting to almost $200 million for 2006 alone.

Considering the huge amount of revenues lost by government due to the illegal trade of tobacco and cigarette products, perhaps Congress and the BIR should reconsider the proposal from Swiss-based Sicpa Security Solutions for the implementation of a state-of-the-art security and monitoring project that would ensure foolproof tracking of domestic cigar and cigarette production for government to determine the right amount of taxes that tobacco companies are supposed to pay the BIR.

Sicpa said the proposed security project will use “strip stamps” in all cigarette and cigar packs along with non-intrusive sensors in tobacco factories for real-time monitoring and tracking of production, with the data relayed to a centralized Data Management System. We were informed the Swiss-based company has the most advanced and sophisticated technology that will make it difficult for counterfeiters to breach security features offered by the project. This technology will enable the BIR to track and trace each strip stamp and its security code at each stage of the stamp’s life cycle from the actual printing to deployment to retailers. Aside from higher excise tax earnings, the project will help government efforts in the capture of undeclared, misdeclared or misclassified tobacco products, Sicpa said.

Considering the BIR’s (and the Bureau of Customs’) difficulty in achieving collection targets and plugging revenue leaks, the proposed project seems to provide a viable solution with the estimated net earnings of over P100 billion in extra tax revenues within its seven-year duration. Add to that the improved international image for the Philippines in fighting the illicit trade of tobacco.

Embarrassing (Wiki)leaks

Still on leaks, the online whistle blower Wikileaks has not only opened an embarrassing can of worms for the United States but has also committed a very serious case of breach of security that could compromise efforts to combat terrorism and endanger the lives of many people all over the world. A lot of the information initially posted on the Internet were classified documents and while there are those who hail Wikileaks founder Julian Assange as a crusading journalist who upholds freedom of information, a lot more are calling the efforts tantamount to espionage and are alarmed and definitely unhappy at the seeming indiscriminate disclosures found in the website that could undermine political and military operations on a global scale.

Aside from disclosures on Afghanistan and Iraq, what seems to be getting a lot of interest are “comments” allegedly made by American diplomats on a number of world leaders like France’s Nicolas Sarkozy who was called thin-skinned and described as “an emperor with no clothes,” while Russian Prime Minister Vladimir Putin was characterized as an “Alpha dog” and Italian Prime Minister Silvio Berlusconi was dismissed as “feckless, vain and ineffective.”

The fact of the matter is, a lot of information sent by diplomats are raw reports and informal assessments to provide background on a certain individual or issue. And while these are considered normal communications, they are confidential. Out of the 250,000-plus cables from 274 embassies, Manila documents/memos total 1,796 although as of this writing, none has been published by the website. I’m quite sure reports concerning the Philippines are also “embarrassing,” to say the least, and those who have something to be embarrassed about must be cringing and praying doubly hard for US authorities to succeed in shutting down the website.

Qualified wealthy individuals

It is always better to see wealthy, qualified individuals in government because their success in the private sector shows they are competent in what they do like Secretary Cesar Purisima who’s in charge of the Finance Department. A lot of competent and qualified people in the private sector are shying away from government because of the law that allows just about anybody to file frivolous cases against anyone. Dedicated and honest public servants have had the sad experience of going through tedious and expensive legal battles using their own money, in the end convinced that public service can be a thankless job sometimes. To attract more competent individuals from the private sector, the appointing power should be willing to stick his neck out – unless of course his appointees do something wrong and there’s proof to corroborate it.

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