MANILA, Philippines—The Department of Finance (DOF) is keeping a close watch on the Bureau of Internal Revenue (BIR) due to recent issues, like alleged “pabaon” to outgoing Finance Secretary Carlos Dominguez III, and the BIR’s controversial tiff with property giant Megaworld Corp. which shed millions of pesos from state-run pension funds’ stock investments.
Around the same time that the BIR-Megaworld brouhaha erupted, “somebody called me last week and told me that there are BIR people going around town harassing people because they were allegedly raising money for my ‘pabaon,’” Dominguez said in an interview on the sidelines of an event of the Climate Change Commission (CCC), where he’s chair-designate.
Pabaon is the colloquial term for cash supposedly given as a gift to outgoing government officials when they retire or finish their term. Dominguez will end his service as the current administration’s chief economic manager and DOF chief at the same time that President Rodrigo Duterte steps down on June 30.
“I really got pissed off because that is absolutely not true. You know what that means? [BIR personnel] going around saying, ‘we’ll give money to Dominguez because he’s leaving.’ Those sons of bitches,” the finance chief said.
“It is the first time I heard people collecting money to give me ‘pabaon,’ which is really goddamn annoying,” he said.
Unfortunately, Dominguez said the whistleblowers, who reported to him, did not identify the unscrupulous BIR officers. “I don’t know the names, but people were calling me up. I asked them the names [but they said] ‘we don’t want to say because they might get back at us.’ You know how it is. They want to be a whistleblower, but they only want to whistle halfway,” the finance chief said.
This was one of the reasons Dominguez and the BIR top management last Friday (May 20) suspended all special audit task forces undertaken by other BIR offices through revenue special orders and operations memoranda on real estate developers, direct selling and multi-level marketing firms, e-sabong, as well as Philippine Offshore Gaming Operators (POGOs), until further notice.
“I stopped these investigations because I don’t want something like that — a legitimate thing to do to be used to harass people for false pretense, for nothing,” Dominguez said.
BIR revenue officers are empowered by Section 5 of the Tax Code to start special audits, upon approval by the BIR commissioner.
But these special audit task forces, like the one formed by the BIR’s revenue region 8B (south National Capital Region) to investigate Megaworld’s tax liabilities from its joint-venture property developments with the state-run Bases Conversion and Development Authority (BCDA) in Bonifacio Global City, had been deemed by the DOF as redundant in jurisdiction. Under revenue administration orders jointly issued by the DOF and BIR chiefs, Megaworld was covered by the BIR’s large taxpayers’ service (LTS), which collects from big corporations.
“Settle the jurisdictional issue first before you go out. Don’t be stupid. It was the left hand not knowing what the right hand was doing. Come on, that’s not professional thought,” Dominguez said, adding that he had ordered the BIR to review its processes so that no similar conflicts in jurisdiction will happen again.
Dominguez nonetheless said the BIR-Megaworld issue was not among those instances wherein revenue officers allegedly sought “pabaon” for him. “I didn’t hear it from them, [it was] from others and different places in the country. ‘Sonny [his nickname], what is this? Is this true?’ Son of a bitch, of course not!”
As for Megaworld, Dominguez said he had found that the BIR’s claims of unpaid taxes “wasn’t proven — there is no assessment, there is nothing.”
“I haven’t seen an assessment and charge sheet [from the BIR]. And by announcing it publicly like that on a publicly listed company, you are not only affecting the company; you are affecting the shareholders. It is not correct,” Dominguez said. He was referring to the BIR’s media advisory last May 17 which announced that the country’s biggest tax-collection agency was supposed to serve a closure order against Megaworld on May 18. Sources said the BIR approved the closure order also on May 17.
“There was a threat to close down a publicly listed company without any basis. There is no finding that they did not pay the tax. There is none. By doing that to a publicly listed company, it affected the price of the shares. The price of the shares affects the public who owns shares there. So why will you affect people when, in fact, there is no finding yet? You are affecting the shareholders,” Dominguez said.
Dominguez said he was worried about the stock market investments of the Government Service Insurance System (GSIS) as well as the Social Security System (SSS) — both state-run pension funds under his watch.
Dominguez later said via a Viber message that “collectively, the public shareholders of Megaworld lost about P111 million in value from May 17-23, of which the GSIS and the SSS lost P37 million” as the listed firm was implicated in a tax issue.
“The SSS and the GSIS are widows’ and orphans’ funds. I don’t know who else has shares there — I don’t know the total list — but why would you affect the value of the wealth of the people when there is nothing really yet to accuse them of?” the finance chief said, again referring to the lack of BIR findings on Megaworld’s alleged unpaid taxes.
Dominguez said the BIR’s LTS will continue to audit Megaworld and other property firms, but “obviously, if you want to affect a company, you do it, but you do it with a total basis.”
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The article was originally published in Inquirer.NET and written by Ben O. de Vera.
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