No details but Dominguez says another onerous contract being reviewed
Yet another government contract with onerous terms, which also allegedly benefitted a former official involved in the transaction, would be reviewed by the Department of Finance (DOF), Secretary Carlos G. Dominguez III said on Thursday (Jan. 30).
“Yesterday, there was a report to me by one of our financial institutions that they got into a contract to lease a piece of property so that lessor will put up a certain structure there,” said Dominguez.
“That lessor did not put up that structure. And yet the lease was renewed, for a very low rate again,” Dominguez told foreign media in a forum.
“And the nice thing about it, the chairman of that institution, when he was replaced, left and became the chairman of that company,” Dominguez added.
Dominguez did not identify the government financial institution, the lessor, or the former official.
“You think this administration should sit down and say, ‘well, that
was the way it was done in the past [so] we will go ahead?’ Dominguez said.
“You forgot the basis of why this administration was elected—we said we wanted to change. And our change is for the better of the ordinary taxpayer,” he added.
The finance chief had also identified the lease agreement between the local unit of global oil giant Chevron and the state-run National Development Co. (NDC) for a Batangas property as disadvantageous to the government.
Dominguez himself had endorsed a review all contracts that may have onerous terms.
President Rodrigo Duterte last year ordered a review of contracts with the two water concessionaires in Metro Manila and
nearby areas which had been accomplished more than 20 years ago but which Duterte said were reeking in onerous terms.
Dominguez told the foreign media forum that the government’s tax take further improved last year, bringing the share of tax efforts in the economy to a 22-year high if 15.1 percent of GDP in 2019.
“We expect the tax effort to be further reinforced this year from the better tax administration and intensified anti-smuggling drive of the
government,” said Dominguez.
He said better revenue generation was also seen in the passage of the remaining tax reform package, remittances from government-owned and controlled firms, and a crackdown on tax-evading Pogos.
At the weekend, the DOF said the tighter enforcement of tax and immigration laws led to the collection in 2019 of P6.42 billion in additional corporate and income taxes from Pogos.
In a statement last Saturday, the DOF said the total taxes collected from Pogos, service providers and their Chinese workers jumped 169 percent in 2019 from P2.38 billion in 2018.
“This increased tax take was the result of a sustained campaign” to ensure that Pogos paid correct taxes, the DOF said.
The DOF quoted Dominguez as saying that it had been “grossly unfair to Filipino taxpayers dutifully paying their taxes for these Pogo employees to continue avoiding paying their taxes” worth an estimated P22 billion.
Citing a report of Internal Revenue Commissioner Arnel Guballa, the DOF said the 218 registered Pogo service providers in the country employed about 108,914 foreigners.
In line with the goal to collect P2 billion per month from Pogos, the Bureau of Internal Revenue (BIR) last year issued 170 notices to “errant” Pogos, which had a combined P27.35 billion in unpaid
taxes.
The BIR in 2019 managed to generate from the Pogo sector P5.13 billion in withholding taxes, P644.07 million in income taxes, P91.13 million in value-added tax (VAT) and percentage taxes, P81.11 million in documentary stamp taxes (DST), as well as P469.13 million in other taxes.
Also, the country’s largest tax-collection agency last year temporarily closed down at least four Pogo service providers that had been found not property paying their tax dues.
“There will be no letup in this ongoing crackdown as
the BIR further steps up its campaign against errant Pogos in 2020,” Dominguez said.
“Basically we’re going hard against people who are evading taxes,” the finance chief added.
