TAX AMNESTY

TAX AMNESTY

Guest Column by Juan Ponce Enrile

Martial law was declared not only to arrest the rising disorder in the country but also to stop many illegal practices in the land. Thus, hand in hand with the effort to restore law and order, the martial law regime embarked on a campaign to eliminate rackets in public utilities and in the sale of commodities.

Former Senate President Juan Ponce Enrile

The illegal connections of telephones and electric power lines were eradicated. The rampant giving of free tickets in the National Railways was stopped. Clandestine connections for water service were done away with.

The sale or distribution of adulterated, imitated, or substandard products, including the sale or distribution of PX goods from the American military bases, were banned. The manipulation of prices of goods and services was severely punished. Hoarding of commodities was outlawed.

The Marcos regime was in dire need of revenues to render social services to the people. Its revenue collections were not enough. Revenue collections were hampered by the smuggling of foreign goods and tax evasions. 

I proposed to the Cabinet that a general tax amnesty be adopted. I argued that this would raise additional revenues and at the same time give taxpayers with delinquent tax liabilities a fresh start. I also pointed out that if my proposal were accepted and carried out it would create a new and wider tax base for the Marcos regime.

Cesar Virata, the Secretary of Finance, opposed my proposal. He argued that it was not fair and morally right to reward tax evaders and, in effect, to treat unfairly those who paid their taxes dutifully. Tax dodgers ought to be jailed and punished rather than forgiven and rewarded with lesser tax payments. Such a policy, according to him, would not only be unfair to taxpayers who faithfully paid their tax obligations but would also encourage tax evasion even more.

I told Secretary Virata that I agreed with him. But as a practical matter, his position would not serve the national interest. It would not bring in more revenues. The government did not have the luxury of time to go after tax evaders to raise the needed revenues. I added that to survive and succeed, the Marcos regime must render the necessary and essential services to the people. That would require money. And the quickest way to raise the money for that purpose was through my proposed general tax amnesty. 

The Cabinet supported me. President Marcos ordered the preparation of a presidential decree to implement my proposal. For the first time, tax amnesty was introduced in the country. That tax amnesty turned out to be a resounding success. Almost everyone took advantage of it. The martial law regime raised billions of revenue which helped to buoy the economy. 

Both Cesar Virata and I came from the private sector. He was plucked from the biggest accounting firm in the country – SyCip, Gorres & Velayo. I came from one (Ponce Enrile, Siguion Reyna, Montecillo, Belo & Ongsiako) of the oldest and biggest law firms in Manila at the time. 

Before we joined the Marcos regime, Cesar and I worked together in establishing many big business projects in the country like, among others, Dole Pineapple Corporation in Polomolok in South Cotabato; the  United Fruit banana project in Davao del Norte; and the aborted Lone Star cement project (Lone Star was the second biggest cement corporation in America based in New York City) with the Zobel de  Ayala family. 

Cesar Virata was very upright and proper. I was practical. I worked on what was feasible. We were and are good friends. We are still both alive. 

Cesar Virata came from the genes of Emilio Aguinaldo.  I sprung from the genes of Damaso Ponce, a bosom friend of Dr. Jose Rizal. Damaso Ponce was a revolutionary like his first cousin, Mariano Ponce of La Solidaridad. He was exiled in  Iwahig in Palawan while Dr. Jose Rizal was exiled in Dapitan in Zamboanga del Norte.

(ai/mtvn)

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