Committee supports third-party tax audits

Members of the Philippines’ House Ways and Means Committee have endorsed a proposal to assign a nongovernment organization to monitor tax compliance at cigarette companies, according to a story by Gil Cabacungan for the Philippine Daily Inquirer.

Representatives Emil Ong and Roy Señeres said they would file a resolution deputizing the Framework Convention on Tobacco Control Alliance of the Philippines to conduct third-party audits of tax payments by cigarette companies.

The development comes amid fears that the sin tax reforms of 2012 have been undermined by chronic tax-evasion schemes, specifically the use of “duplicate tax stamps.”

The alliance expressed concerns over a recent study commissioned by Philip Morris International that showed the Philippines had lost an estimated PHP15.6 billion in revenue because the sale of tax-dodging cigarettes had increased nearly three-fold to PHP17.1 billion last year, from PHP6.1 billion in 2012.

An earlier story, however, quoted the Bureau of Internal Revenue Commissioner Kim Henares as saying the proposal to use third-party agents would violate the tax code.