WE HOPE the government, through the Bureau of Internal Revenue, will go beyond what some observers have described as an “Al Capone style” tax fraud audit of contractors.
These contractors have been linked to alleged aberrant flood control projects, in conformity with President Ferdinand Marcos Jr.’s order for lifestyle checks on government officials as part of his administration’s intensified anti-corruption drive amid alleged irregularities in flood control projects nationwide.
But what does this Al Capone style tax fraud audit mean?
This refers to Al Capone (1899-1947), head of the most profitable crime syndicate of the Prohibition Era and mastermind of the notorious 1929 “Valentine’s Day Massacre” in the United States who with his arrogant gait seemed above the law.
In the end, Capone would be brought to justice not for murder, extortion, or bootlegging, but for failing to pay his income tax. He eventually died of a stroke while serving nine years in prison.
The lesson of The People vs. Al Capone is that a profitable businessman, no matter how he earns his income, must pay his taxes.
This is where the BIR steps come in: how the agency will conduct its probe on all identified contractors who have had flood control and other infrastructure projects that eventually were discovered to be “ghost projects.”
Again, beyond the technical jargon and specialized vocabulary, a “ghost project” may mean an abandoned or unfinished project that still appears on official lists, a fictitious or fraudulent project created to misappropriate funds, unrecorded, essential work in software development that becomes “invisible” but crucial, or stalled or fake initiatives.
Government probers must do more than what is expected or required, which implies exceeding a standard, surpassing expectation, or having qualities that are more than just fundamental.
The people would love and be well pleased to see the corrupt contractors, who may not have bank accounts for direct evidence of income for the money trail as in the case of Al Capone, be sanctioned under existing laws.
It is not sufficient, as BIR Commissioner Romeo Lumagui Jr. told a public hearing, that all revenue offices have been directed to conduct parallel audits to determine whether contractors involved in questionable projects paid the correct taxes.
“If it can be proven that they underpaid or incorrectly paid their taxes, they will not be issued an updated tax clearance,” Lumagui said.
More than withholding an updated tax clearance from contractors who incorrectly paid their taxes, law enforcement authorities must throw the book at them as severely as the law or rules allow, or apply all possible charges or penalties in the letter and spirit of the law.
