The transition to the 23rd council of a major city will primarily involve second-term councilors forming the majority, with a female colleague assuming the role of majority leader. Similar to the dynamics in the houses of Congress, the primary motivation is to secure influential committees.

These positions would allow the councilors to recoup funds spent during the recent election.

Many of these second-term councilors are successors to their parents, who previously held these seats and benefited from committees that provided additional income.

The change in leadership is scheduled to occur next month at the opening of the local government’s law-making body.

Sophisticated tax evasion

While less generous than the US in allowing art-related deductions, the local tax system still offers loopholes for tax avoidance that may overlap with money laundering.

Under the National Internal Revenue Code, donations to cultural institutions can qualify for tax exemptions, though the Bureau of Internal Revenue (BIR) scrutinizes the valuations.

Wealthy Filipinos often donate artworks to museums like the Ayala Museum or the National Museum, claiming cultural philanthropy while securing tax benefits.

Then there are the criminal syndicates that can purchase art with illicit funds, inflate its value through complicit appraisals, and donate it for a tax deduction, effectively “cleaning” the money through tax savings.

For example, a painting bought for P1 million could be appraised at P10 million and donated, yielding a significant tax credit.

The BIR’s limited capacity to verify art valuations and the market’s subjective pricing make this scheme challenging to detect.

Public sentiment reflects skepticism about such practices. A 2022 social media post highlighted expensive paintings as part of the Philippines’ unrecovered wealth, suggesting public awareness of art’s role in elite financial schemes.