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Marcoleta vows probe on ABS-CBN subsidiary Big Dipper should he win Senate seat

Deputy Speaker Rodante Marcoleta on Monday vowed to investigate ABS-CBN Corp’s transactions with its wholly-owned subsidiary, Big Dipper Digital Content and Design Inc., should he win a Senate seat in the May 2022 elections.

In a statement released Monday, Marcoleta — who was instrumental in denying the franchise of ABS-CBN — said he would look into the supposed “inaction” of the Bureau of Internal Revenue (BIR) which he claimed refused to look into the supposed tax fraud of the broadcast network through Big Dipper.

“What kind of business person would pay a service provider P838 million when it can do the same thing in-house for only P96 million?” Marcoleta said.

“But the apparent P742 million excess payment to Big Dipper would have been subject to the 30% income tax rate for ABS-CBN.”

Big Dipper earlier applied and qualified for a registration with the Philippine Economic Zone Authority (PEZA) under the creative industry sector, paying taxes equivalent to 5% of its gross income earnings.

“And why did ABS-CBN, its subsidiaries and other companies, religiously pay Big Dipper exorbitant amount for uneven value of services that could be acquired in-house for much lower cost?” Marcoleta asked.

“Because Big Dipper is strangely registered with PEZA and as such, is only taxed at 5% gross, that’s why,” he added.

GMA News Online has reached out to both BIR Commissioner Caesar Dulay and ABS-CBN Corp. for comment on the matter, but no official statements were immediately available.

ABS-CBN Group chief financial officer Ricardo Tan in 2020 maintained that ABS-CBN paid all its taxes annually, and complied with all the rules and regulations involving tax payments.

“ABS-CBN has paid its proper taxes every year. Contrary to the allegations, there has not been a single year where ABS-CBN has paid zero taxes," Tan told lawmakers during a hearing in July 2020.

“Big Dipper Digital Content and Design Inc. is not a tax avoidance scheme. We did not deprive the government of revenues nor did we violate the terms of our franchise,” he added.

PEZA Director-General Charito “Ching” Plaza, in the same hearing, also said that Big Dipper paid P115 million in income tax in 2016, P120 million in 2017, and P119 million in 2019.

Tan also said ABS-CBN did not violate the law when it entered into a compromise agreement with the BIR for the settlement of taxes.

“The right to enter into a compromise agreement is the remedy provided for under the Tax Code in cases where doubt may exist in the validity of assessment or financial incapacity. It is available to all taxpayers, not just to ABS-CBN,” he said.

Marcoleta is seeking a Senate seat in the upcoming 2022 polls, under the PDP-Laban party. He was instrumental in the denial of ABS-CBN’s franchise renewal, as a panel of the House of Representatives voted to reject the application based on a technical working group’s recommendation.

Government agencies such as the BIR, the Securities and Exchange Commission (SEC), and the Department of Justice (DOJ) have cleared ABS-CBN Corporation of violations.

President Rodrigo Duterte had been consistent in threatening to oppose the renewal of ABS-CBN's franchise, as he earlier claimed the network did not air political advertisements during the 2016 election campaign which were already paid for.

In February 2020, ABS-CBN president and chief executive officer Carlo Katigbak apologized for the unaired political ads. Duterte accepted the apology two days later, and said he would not interfere with the franchise renewal process in Congress.

The National Telecommunications Commission (NTC) ordered the company to stop operating its television and radio stations in an order dated May 5, 2020. —KBK, GMA News