The Bureau of Customs (BOC) has its own forfeiture and seizure powers under the Customs Modernization and Tariff Act (CMTA, RA 10863), which can directly apply if the flood control anomaly perpetrators are found owning untaxed, smuggled, or misdeclared motor vehicles.
The BOC can forfeit vehicles, including cars, planes or yachts, owned by the flood control anomaly perpetrators if these were smuggled or misdeclared in importations, or if the owners cannot present official importation documents and BOC clearances. The BOC, upon finding probable cause (e.g., no valid import documents), can issue a Warrant of Seizure and Detention against the vehicle. Subsequently, these seized properties can be forfeited in favor of the government after the application of several measures, including the auction of said vehicles. The BOC made a big show of seizing 10 of 12 imported luxury cars owned by contractor couple Curlee and Sarah Discaya in early September 2025.
Simultaneously, the BOC can assess the unpaid duty and taxes and impose up to 500 percent surcharge on these, plus 20 percent per annum of interest on unpaid duties and taxes for smuggled vehicles. The smuggling cases can also be filed as criminal cases that can result in imprisonment.
The Bureau of Internal Revenue (BIR) designated its tax investigators to conduct a multi-year audit of the tax declarations of the flood control contractors, including the top 15 contractor companies cited by the President in his televised broadcast last August 2025. BIR Commissioner Romeo Lumagui, Jr. has designated its various investigating offices, including the National Investigation Division, to audit the flood control perpetrators. The BIR investigators can conduct criminal tax fraud audits and utilize net worth investigations, resulting in both deficiency tax assessments with 50 percent fraud surcharge and 20 percent per annum interest and criminal prosecution for tax fraud that carries fines and imprisonment. Commissioner Lumagui has mandated the multi-year audit of the tax liabilities of these construction companies. The investigation should cover all the related or dummy companies, the owners, and their relatives. The tax cases of these persons and companies that have been closed by earlier tax investigations of BIR district offices should be reopened and investigated again with the authority of the Commissioner.
I suggest that the Presumptive Taxation or the best-evidence assessment approach be applied appropriately. Section 6(B) and 6(C) of the National Internal Revenue Code give the BIR the authority to assess taxes on the ‘best evidence obtainable’ if the taxpayer’s records are incomplete, falsified, or non-existent. This is a powerful authority that the BIR investigators can utilize to come up with immediate results even when the taxpayers being audited do not submit complete records and documents.
The BSP, AMLC, SEC, BOC, and BIR must now show that they can bite as well as bark. The flood control perpetrators have flaunted their ill-gotten wealth for too long, hiding behind dummies, offshore accounts, and smuggled toys. By freezing their assets, seizing their hot cars and planes, and hammering them with tax fraud assessments that lead to prison time, the financial watchdogs can prove that the rule of law still has teeth. But as I have stressed in many of my columns, laws and powers are meaningless without relentless follow-through. It is up to all of us-tax professionals, civil society, and ordinary taxpayers-to demand results and keep watch, lest this investigation be remembered as another showpiece probe that went nowhere.