The reported hopes of multi-million peso reward for “whistleblowers” have been sidestepped following the Office of the Solicitor General’s (OSG) concurrence to the offer of Pilipinas Shell Petroleum Corporation (PSPC) to post surety bond in lieu of placing an escrow account for its alleged tax arrears of P7.3 billion.

Two laws or policies - Section 282 of the National Internal Revenue Code (NIRC) and Section 3513 of the Tariff and Customs Code of the Philippines -- are supposed to govern the payment of reward to qualified informers of tax violations or for government officers enforcing the seizure of smuggled goods.

In the Pilipinas Shell case, when it would be declared liable for the claimed excise taxes, it was noted that the Bureau of Customs’ port collector in Batangas or other parties involved may have been able to claim reward for information furnished of the alleged violation. However, after the national government’s acceptance of the surety bond offer, the reward provision was perceived to have been technically dodged.

In an interview, newly designated acting Justice Secretary and concurrent Solicitor General Alberto Agra noted that the government decision was made with the imprimatur of Executive Secretary Eduardo Ermita, then Trade Secretary Peter Favila, Finance Secretary Margarito Teves and was also agreed upon by the BoC Commissioner who attended the meeting prior to OSG’s acceptance of the Shell offer.

“We did not compromise anything as to the government’s position in the case, and we have also clearly manifested that in our filing at the CTA (Court of Tax Appeals),” the justice chief noted.

He added that the deal will be beneficial to the government, because when the Court decides with finality on the merits of the case; “and if we win, the government can readily call on the surety bond.’’

Agra stressed “we agreed to the surety bond posting proposal of Shell because what we are trying to avoid will be for government to be unduly blamed for supply disruption when there is seizure of their future importations.’’

For emphasis, Section 282 of the NIRC prescribes the grant of reward “to persons instrumental in the discovery of violations of the revenue code and in the discovery and seizure of smuggled goods,’’ but there is specific stipulation that the payment of such shall be bound under the rules and regulations issued by the Secretary of Finance, upon the recommendation of the Commissioner (in this case, the Bureau of Internal Revenue).