Taxation as political weaponry

One of the first acts initiated by the Duterte administration to address past flaws was the suspension of audits contained in an eleventh-hour issuance from the Bureau of Internal Revenue (BIR). 

The initiative was hailed by the business community although a spattering of recalcitrants and individuals stubbornly sticking to the cloyed “daang matuwid” mantra claimed such directive would lead to fallen revenues and tax evaders going scot-free.

On jailing tax evaders, the record shows that not a single of those accused of tax evasion, or even those forcibly dragged through the system, had gone to jail, with many walking free prior to a preliminary finding of prima facie cases. The data give credence to the notion that what state powers were employed were really nothing more than forays in political harassment, at best, and a public-relations “zarzuela,” at worst.

Allow us to review the data.

Nearly 500 tax-evasion cases were filed in the last six years and yet only 81 actually landed in court. That’s an 80-percent failure rate at the starting block.

The numbers are far worse at the finish line. The number of cases successfully prosecuted where accused tax evaders land in jail is zero. That’s a 100-percent failure rate.

Let us look at the details of failure. Five cases reached the Court of Tax Appeals, one at the Supreme Court. All six ended in defeat. Preliminary investigations were initiated for some 200 cases, many submitted for resolution. All face the possibility of insufficient probable cause thus, increasing the likelihood of being dismissed before reaching any court’s doorstep.

Digging deeper into the data reveals inherent and insidious objectives for very specific cases built against very specific personalities. Let us look at some of the most obvious.

One is a P73.34-million complaint slapped against an executive of a publicly listed company, which Blue Ribbon solons claimed, even sans a definitive prima facie case, was a front for a presidential contender. They’ve forgotten that listed companies are open to full disclosure.

Another case stands out because the groundwork to prosecute similar cases stopped right where political party perimeters demarcate. It involves a pending P101.7-million complaint filed against a firm operated by the first-degree relatives of a respondent accused in a political pork-barrel controversy that resulted in detaining influential opposition leaders.

Add to these two other cases involving P14.96 million and P39.03 million pending against the contributors to an opposition presidential aspirant. Add also the P73.85-million case against the husband of a leading political figure constantly declared as the cause of all of Benigno Aquino III’s troubles.

Then there is also the P13.6-million case filed against an opposition figure. Plus three other cases involving P44.71 million, P16.47 million and P17.89 million filed against personages with political links in the pork-barrel controversy.

But perhaps the most controversial is the P120.5-million tax-evasion case filed against an impeached chief justice of the Philippines. Despite the statutory dismissal of criminal liabilities, past tax authorities still consider this a feather in their caps.

For many of these, the controversial net-worth method of determining tax liabilities was employed. Never mind that the net-worth method is merely indicative and actually stops short of prosecution, as no real definitive evidence of evasion tax is proven by it.

Fortunately, under President Duterte matters were straightened out when a BIR directive put an immediate stop to insidious statutory harassments. As harassment and corruption ride in tandem on a vehicle called extortion, the directive to suspend the political weaponization of taxation puts into play an anti-corruption initiative primarily designed to right past wrongs.