Friday, January 21, 2005

NR0118: GMA encouraging tax evasion

Mula sa Tanggapan ni Anakpawis Rep. Crispin Beltran
News Release January 18, 2005
House of Representatives, South Wing Rm 602
931-6615 Ina Alleco R. Silverio, Chief of Staff
Cellphone number 09213907362

Rep. Beltran slams Malacanang's exemption of tax audit for delinquent tax
payers and big-time tax evaders

Anakpawis Representative Crispin Beltran today said that President Gloria
Macapagal-Arroyos offer to free taxpayers from audit if they pay 25 percent
more of their current tax bills was outrageous. This was the gist of Executive
Order (EO) 399 the executive signed yesterday. The "no audit scheme" will be
offered for five years starting the last taxable year. According to Malacanang,
the is designed to reduce corruption and administration costs while enhancing
voluntary compliance which lies at the foundation of any sound revenue

"Malacanang's tax and revenue program has gone completely haywire - and it's
even encouraging tax evasion by doing away with the necessary auditing process
which determines how much a business or individuals owes the government in
taxes," he said. "By doing away with the audit requirement, the government is
giving tax evaders greater leeway. This EO makes tax evasion more

"There is neither sanity nor lucidity in the revenue generating schemes of the
Macapagal-Arroyo administration. On one had it is angling to increase value
added taxes and remove many agricultural and manufactured products from being
exepted from VAT; but on the other hand it's granting multi-million tax
exemptions and more tax holidays to big-time tax evaders.

"In the case of this latest executive order, Pres. Arroyo is encouraging
corruption and more tax evasion by promising corporations and other businesses
that they will not be audited for the next five years ," he said. He also
pointed out that for all the limits and conditions supposedly being set by
the EO and the Bureau of Internal Revenue on the audit-free benefit, it was
easy to see how unscrupulous businesses will further bend and twist the rules
to escape their tax payments AND avoid getting audited.

The veteran labor leader expressed incredulity over the EO's justification of
the no-audit scheme: "Voluntary tax compliance is enhanced when compliant
taxpayers are protected against undue audits and investigations even as tax
evaders are punished. There is a need to establish a program to increase tax
collections by providing taxpayers with incentives to voluntarily declare and
pay higher taxes and by reducing administrative costs that are entailed from
audits and investigations conducted by the BIR."

"This is a naïve and dare it be pointed out stupid justification. What is
needed is more political will and determination on the part of
Macapagal-Arroyo administration and its tax collection agencies to collect
the taxes and to say NO to corruption, the "lagay" system," and to
overhaul the general orientation of the revenue and tax collection system.
Less incentives and more law enforcement; fight corruption and radical reforms
which end the government's tolerance and coddling of big time tax evaders.

Finally, the activist lawmaker said that Malacanang's EO 399 is a slap on the
face of the Senate and Congress. "Malacanang is essentially abusing its
authority and rewriting laws without having to go through Congress and the
Senate. If she wanted, Pres. Arroyo could probably issue yet another executive
order that will impose a 2% increase on the VAT and remove many more products
off the list of VAT-exempt products. This is blatant abuse of authority." #


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