‘Shame’ campaign vs taxpayers bucked

AD UNFAIR TO DOCTORS? This Bureau of Internal Revenue advertisement that appeared in the Inquirer is deemed unfair by the Philippine Medical Association.

EUROPEAN businessmen in the country have expressed concern that the government’s shame campaign aimed at erring taxpayers as well as importers did not give a fair chance for alleged wrongdoers to explain their side, leading to damaged reputations.

In a July 14 letter to Finance Secretary Cesar V. Purisima, the European Chamber of Commerce of the Philippines (ECCP) nonetheless said it “commends the DOF (Department of Finance) on joining forces with the Bureau of Internal Revenue and the Bureau of Customs to strengthen government efforts to increase transparency on tax and custom duty payments and consequently a level-playing fled for business.”

The DOF publishes weekly in newspapers and also disseminates in social media the so-called “Tax Watch” and “Customs Watch” updates, which uses infographics to identify taxpayers and consignees alongside statistics on their tax payments and customs valuation of imports, respectively.

ECCP vice president and general manager Henry J. Schumacher noted that these initiatives “may be deemed as compelling tools to improve tax and customs compliance and prevent losses in government revenue collection.”

However, Schumacher said European businessmen were concerned about the potential negative impact of flagging responsible taxpayers and importers in Tax and Customs Watch advertisements, thus damaging their reputation without having been given chance to explain why the discrepancies exist.

“It is our assumption that the appearance of otherwise rules-abiding entities in these public notices are meant as a form of benchmarking to put a spotlight on the alleged tax discrepancies or shipment undervaluation of suspected misbehaving entities. However, as end-users may not readily view this rhetoric from this perspective, general public perception toward the codes of conduct and corporate integrity of tagged companies that operate according to rules may therefore suffer,” Schumacher pointed out.

“Given the fact that the reputation of companies is their biggest asset, the campaign could be damaging without giving the affected companies a chance to explain the differences,” he added.

In this regard, Schumacher said the ECCP “strongly support measures to study and reassess how the Tax and Customs Watch Bulletins are presented and could be adjusted with the view to ensuring that the outcome of potentially misleading advertisements, though unintended, is effectively addressed.”

Since the Tax Watch campaign was launched in 2013, the DOF has come out with 98 advertisements to date.

Last July, the Customs Watch ads focused on importers of cheese, frozen meat, ceramic and tiles as well as iPads. A Tax Watch ad published also last month, meanwhile, listed down local government units whose treasurers failed to submit or report on time their respective yearend electronic Statement of Receipts and Expenditures or eSREs for fiscal year 2014.