THE recent move by antismoking buffs urging the Bureau of Internal Revenue (BIR) to conduct a third-party audit on the oldest Filipino-owned Mighty Corp. (MC), whose cigarettes ate away a large portion of its multinational rivals’ market in recent years, is an old discredited idea.
In July 2014 antitobacco advocates came up with an idea to allow third-party auditors and examiners to look into the operations of MC, through a so-called congressional resolution, but then BIR Commissioner Kim S. Jacinto-Henares shot it down, telling them she cannot allow them to encroach on a very sensitive function of the BIR.
Henares expressed serious concern over the accountability of the private examiners if ever it would be allowed to conduct parallel investigation. She explained that the BIR has revenue officers assigned to cigarette factories for the strict enforcement of tax rules and regulations and ensure the collection.
These revenue inspectors are charged with monitoring production, packaging and transport of finished products which activities are confidential.
The revenue officers are also sworn to protect the trade secrets of cigarette producers, prohibiting them, among others, from disclosing the kind of raw materials and ingredients used in the blending and manufacture of products.
Under Section 270 of the Tax Code, a revenue officer is liable to be dismissed from the service, fined up to P100,000 and sent to jail up to five years for unlawful disclosure of trade secrets.
BIR officials reacted then to news circulated by health advocates that the late OFW Family Club Party-list Rep. Roy Seneres and former Rep. Emil Ong of the Second District of Northern Samar would file a resolution deputizing the Framework Convention on Tobacco Control (FCTC) to visit cigarette factories to audit and determine if they are paying correct taxes.
Ong, however, when contacted, said he was not filing any resolution to support FCTC’s proposal to visit cigarette factories to audit and determine if they are paying correct taxes.
This time, the same advocates using different groups and questionable talking heads are using the so-called fake stamps stories as a justification to intrude into the BIR’s exclusive investigative and oversight authority under the tax code.
A ranking BIR official last Friday said they cannot share with third party or any outsider information the agency gathered on taxpayers.
“Otherwise,” said Gaudencio Mendoza, chief legal counsel of BIR Commissioner Caesar Dulay, “a revenue official or employee sharing such data with outsiders is liable to be sent to prison under the Tax Code titled Unlawful Divulgence of Trade Secrets.”
The Code covers “any officer or employee who divulges to any person or makes known in any manner than maybe provided by law information regarding the business, income or estate of any taxpayer, the secrets, operation, style of work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer, knowledge of which was acquired by him in the discharge of his official duties.”
MC earlier dismissed allegations that it was using fake strip stamps, claiming the BIR is closely monitoring production and withdrawal at its only factory in Bulacan, having been the first one to install closed-circuit television cameras to monitor its operations in compliance with BIR regulations since 2014.
To reach the writer, e-mail cecilio.arillo@gmail.com.