Finance dept. orders fund agencies to craft cyber defense strategy

Robie de Guzman   •   October 7, 2020   •   392

MANILA, Philippines – The Department of Finance (DOF) has ordered government financial institutions (GFI), state-run pension fund, insurance agencies, and revenue and treasury agencies to work together in formulating a shared policy to shield their respective systems from possible cybersecurity threats.

In a statement, Finance Secretary Carlos Dominguez III said the move is in line with the Duterte administration’s initiative to fast-track its digital transformation and strengthen the cybersecurity of key agencies against potential attacks, and data breaches in the digital landscape.

“We are keen on institutionalizing this cybersecurity program. As the Duterte administration fast-tracks its digital transformation initiatives to meet the challenges of the emerging New Economy, we must also see to it that we have the capacity to defend our critical systems from cyber-attacks from third parties and other possible hazards,” Dominguez said.

“Investing in cybersecurity is not only a crucial national security concern, but is also indispensable to protecting sensitive citizen information stored in the systems of our GFIs and other state-run institutions,” he added.

In line with this, Dominguez instructed GFIs and other agencies under his department to enter into an agreement on shared cyber defense strategy.

These agencies include the Land Bank of the Philippines, United Coconut Planters’ Bank and the Development Bank of the Philippines; the Insurance Commission, Philippine Health Insurance Corp., Philippine Deposit Insurance Corp., Government Service Insurance System and Social Security System; and the Bureau of the Treasury, Bureau of Internal Revenue, and the Bureau of Customs.

Dominguez said he has also ordered the creation of a working group composed of representatives from these agencies to work on identifying the potential cybersecurity threats and cases of cyber fraud that they may encounter, and on determining ways of eliminating or mitigating these risks.

He said the government may tap the expertise of the private sector in coming up with a joint cyber defense strategy.

The Finance chief also said that the government is taking a prudent approach to protecting the country’s financial “infostructure,” especially at this time when the digital space has become vulnerable to a wide range of sophisticated cyber attacks and threats.

“We are serious in protecting our national interests and ensuring the safety of citizen information so we are taking steps to heighten our digital protection strategies,” Dominguez said.

BIR collects over P500-M in taxes from padlocked establishments – DOF

Robie de Guzman   •   December 2, 2020

MANILA, Philippines – The Bureau of Internal Revenue (BIR) has collected a total of P547.9 million in taxes from January to September this year from 178 commercial establishments that were padlocked earlier for failing to either register or pay the correct amount of taxes, the Department of Finance (DOF) said Wednesday.

In a statement, the DOF said BIR’s operations conducted against the padlocked establishments were pursuant to Revenue Memorandum Order (RMO) No. 3-2009, otherwise known as the “Oplan Kandado Program.”

In a report to Finance Secretary Carlos Dominguez III, the BIR said it has also filed 14 cases before the Court of Tax Appeals (CTA) in a bid to collect some P338 million in tax liabilities from various respondents.

Meanwhile, 72 complaints involving an estimated P3.4 billion in tax liabilities that the bureau has filed before the Department of Justice (DOJ) are now under preliminary investigation, BIR Deputy Commissioner Arnel Guballa said in his report.

Last year, the BIR collected a total of P1.92 billion under its Oplan Kandado program as a result of the temporary closure of 743 establishments for various violations of the National Internal Revenue Code.

BIR’s performance under the Oplan Kandado program in 2019 was a 218.88-percent improvement over its 233 closures of establishments reported in 2018 and a 140.76-percent increase in collections amounting to P799.47 million during that year.

Also in 2019, the BIR filed a total of 347 complaints involving tax liabilities estimated to be worth P24.02 billion combined before either the DOJ or CTA as part of the Duterte administration’s all-out campaign against tax evaders.

Under its Run After Tax Evaders (RATE) program, 309 cases for preliminary investigation were filed by the bureau before the DOJ last year for tax liabilities of various individuals and corporations estimated at P19.06 billion combined.

The DOF said this was a marked improvement of 56.85 percent over the 197 cases filed by the BIR in 2018 involving some P15 billion-worth of tax liabilities.

In the CTA, the bureau has filed 38 cases for tax liabilities worth P4.94 billion combined, or more than triple the 12 cases filed before the tax appeals court in 2018.

The cases filed before the CTA involving close to P5 billion in tax liabilities represent a 480.67 percent increase over the estimated P851.57 million in taxes that the BIR had hoped to collect in 2018 through litigation, the DOF said.

Finance Department oders PITC to remit unused public funds

Marje Pelayo   •   December 1, 2020

MANILA, Philippines – The Department of Finance (DOF) ordered the Philippine International Trading Corporation (PITC) to remit all income from interests it generated from various government agencies so the fund may used for the government’s response against coronavirus disease (COVID-19) pandemic and relief efforts to areas affected by the recent typhoons.

In a statement, Finance Secretary Carlos Dominguez wrote to Trade Secretary Ramon Lopez who chairs the PITC Board to remit to the national treasury a total of P1.1 billion that the corporation collected from the years 2018 and 2019.

The said amount was the balance of the interest income from funds of various government agencies supposedly for equipment that has been noted as “parked” funds in the state-run corporation.

The DOF noted that in 2019, the PITC had a trust liabilities of P33-B while from the start of this year to October it had P32.6-B.

“Following our discussion, we would like to request the return to the Bureau of the Treasury (BTr) by PITC, the interest earned on such funds held in trust. From 2018 to 2019, the interest earned on such funds totaled P1.151 billion,” Sec. Dominguez confirmed.

Dominguez cited a Commission on Audit (COA) report which stresses that PITC’s non-remittance of the said fund to the National Treasury is a clear violation of the Government Auditing Code of the Philippines.

Prior to this, Dominguez also notified Budget Secretary Wendel Avisado through a letter of his order to PITC to return the P33-B to the national treasury.

Senator Franklin Drilon who raised the issue on the ‘parked’ unused public funds at PITC suggested the termination of the agency citing the problems it causes the government for concealing public funds. 

Also, Drilon said PITC seems to be a duplication of government function because the Budget Department also has an existing procurement service, not to mention each government agency’s Bids and Awards Committee that do similar work as PITC. MNP (with reports from Harlene Delgado)

Finance chief orders BIR, BOC to probe coops used for rice imports

Robie de Guzman   •   November 27, 2020

MANILA, Philippines – Department of Finance (DOF) Secretary Carlos Dominguez III has ordered the Bureau of Internal Revenue (BIR) and the Bureau of Customs to assist in the investigation being conducted by the Department of Agriculture (DA) into the reported use of cooperatives by private traders as dummies for rice imports.

“There’s this question now as to why traders are using coops to import rice …. Let’s look into that because they might be using the tax advantage on rice imports,” Dominguez told BIR Commissioner Caesar Dulay and BOC Commissioner Rey Leonardo Guerrero during a recent executive committee meeting.

Dominguez issued the directive following the DA’s decision to temporarily halt the issuance of sanitary and phytosanitary import clearances (SPSIC) to farmers’ cooperatives and irrigators’ associations for commercial purposes.

Through Administrative Order No. 34 issued in October, the DA suspended the SPSICs to coops and irrigators’ associations, effectively barring them from importing rice, after the DA received reports that these organizations have resorted to rice imports rather than carry out their purpose of procuring local rice from farmers.

Both the DOF and DA have also received reports that the SPSICs issued to cooperatives have been misused by traders to avoid legal responsibilities and evade the payment of the correct amount of import taxes.

Finance Undersecretary Antonette Tionko also noted that while cooperatives are not exempted from paying duties for importing rice, they can be exempted from paying the income tax on these imports if they are registered with the BIR as tax-exempt entities.

Through the AO, the DA directed the Bureau of Plant Industry to probe and to consult with affected stakeholders “to come up with new policies and rules to avoid circumvention of the laws” and to protect the farmers and cooperatives form exploitation.

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