Headlines Skinning Left, pagematch: 1, sectionmatch: 1
Headlines ( Leaderboard Top ), pagematch: 1, sectionmatch: 1

New BIR chief to start collecting campaign tax

MANILA, Philippines - The country’s new revenue chief vowed yesterday to strictly implement the controversial five percent tax on campaign spending.

“We intend to put in new measures in the withholding tax system, starting with the five percent tax on campaign spending,” acting Bureau of Internal Revenue (BIR) Commissioner Joel Tan-Torres said.

Some quarters have expressed fears that the campaign tax may be used by the administration to harass opposition supporters.

Tan-Torres’ predecessor Sixto Esquivias IV resigned reportedly for health reasons almost exactly a year after assuming office.

President Arroyo has yet to officially announce a replacement for Esquivias.

He resigned three days after skipping work last week reportedly due to high blood pressure caused by intense stress over the large shortfall in tax collection.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

On his first day as BIR officer-in-charge, Tan-Torres also said one of the tax enhancement measures that he hopes to initiate is the tighter monitoring of the income of retailers in bazaars this Christmas.

“We will put up a tax monitoring system for bazaars and retail stores for the Christmas shopping season,” he said. “We will start plugging loopholes of forthcoming and existing tax incentives that dilute revenue generation.”

Revenue Regulation 8-09 requires all political candidates, political parties and contributors to register with the BIR as withholding agents.

The BIR, the government’s main revenue earner, said it   has been missing its collection targets because of the global financial crisis which has dampened economic activities.

From January to September this year, the BIR collected only P557 billion, or P39.2 billion short of the target for the period.

In September alone, the BIR collected P56.2 billion, just slightly higher than the P55.8 billion it had raised in the same period last year.

Tan-Torres hopes the new measures would allow the BIR to achieve its full-year target of P798.5 billion but he conceded that this would be difficult.

Weak revenues have widened the government’s deficit to P237.5 billion as of end-September, just P12.5 billion short of the full-year ceiling of P250 billion.

Lines drawn

Tan-Torres also said the task of Presidential Adviser on Revenue Enhancement (PARE) Narciso Santiago Jr. will be limited to oversight and providing policy direction to BIR’s Large Taxpayers Service.

“I’m aware that the involvement of PARE will be limited to essentially oversight function and providing policy direction,” he said.

He stressed that the LTS unit would not be turned over to PARE.

Insiders said Santiago and Esquivias were at loggerheads over the LTS unit.

Santiago is the husband of Sen. Miriam Santiago.

Undersecretary Santiago had reportedly asked Malacañang for the transfer of the LTS unit to his PARE office but this was opposed by Esquivias.

At a Senate budget hearing early last month, Sen. Santiago slammed Esquivias for reportedly failing to heed President Arroyo’s Administrative Order 236 placing the LTS under the direct jurisdiction of Narciso.

“What is your problem Mr. BIR commissioner?! What is your interest in the large taxpayers unit?!” Santiago angrily asked Esquivias during the hearing.

“You’re so possessive of the large taxpayers unit. Are you going to use it for your campaign?” Santiago sarcastically asked.

The LTS includes the Top 1,000 corporations in the country or those with a net worth of P300 million and pay an annual income tax and withholding tax of at least P1 million.

They also pay value added tax of at least P100,000 for any quarter. Taxpayers in this group include blue-chip firms and big businesses.


Malacañang commended Esquivias for taking responsibility for the poor performance of the BIR.

Deputy presidential spokesperson Gary Olivar said that he was not sure about the reason behind Esquivias’ resignation but based on the reports quoting him on the poor performance of the BIR, his gesture was “certainly praiseworthy.”

“We don’t know all of the facts behind what’s happening at the BIR, what its performance is and also his medical condition, so I hesitate to make a judgment in his case personally. But certainly the principle of taking accountability for your own performance especially if you are the head of an agency, that is always commendable,” Olivar said.

Press Secretary Cerge Remonde, quoting Esquivias’ immediate boss at the BIR, Finance Secretary Margarito Teves, said that the Commissioner resigned because of poor health.

Olivar argued that the stress could have taken its toll on Esquivias health and forced him to eventually quit.

“It is certainly a comment on the difficulty of what he’s trying to do,” Olivar said.

Olivar also said that it was understandable for Esquivias to resign based on the principle of command responsibility.

“Nobody can quarrel with that principle that you should take personal accountability for how you perform,” he said.

“But what’s important, the bottomline is that if you fail to do what you are expected to do, this is probably a problem that you have to account for. That is the principle of Commissioner Esquivias and the principle itself is commendable,” he added.

In a statement, Teves expressed his gratitude to Esquivias for his “dedicated and earnest service to the government and to the country.”

Teves said that with “due deference to the appointing authority” Esquivias was “giving way to other individuals who would hopefully lead (the BIR) to achieve even better results.”

‘Reasonable’ thing to do

Former budget secretary Benjamin Diokno said Esquivias’ decision to quit was the “most reasonable thing to do” even as he urged President Arroyo to replace him with “somebody who understands the system.”

“It’s good that there are still people like him in the government… I think he will soon be fired as penalty for not meeting the target,” Diokno told reporters after attending a media forum in Intramuros, Manila.

“As early as last year I know that the target could not be attained,” Diokno said referring to BIR’s collection target.

“I think it should be lowered realistically… right now actually their collection was five percent lower than last year,” Diokno, who is also a professor at the University of the Philippines’ School of Economics, said.

He said the economy slowed down significantly due to the two recent typhoons that affected the corporate and personal income of Filipinos mostly in the National Capital Region and Luzon.

He said these regions comprise 66 percent of the total gross domestic product.

Me resign? No way

But for the chief of the Bureau of Customs, another underperforming revenue agency, the resignation of Esquivias has provided no compelling reason for him to resign.

Customs Commissioner Napoleon Morales said the BOC is unlikely to meet its P277 billion collection target for the year due to the lingering global economic crisis.

“To reach the yearend target is already improbable at this point. But what we can do and will do is maximize collections and ensure that there are no leaks in revenue,” Morales said in a statement.

The BOC earlier announced its collection shortfall of P36.02 billion.

“I have a job to do and I will do my best until the President tells me otherwise, at which time I will graciously hand over the reins to my successor,” Morales said.

Fiscal crisis unfolds

Meanwhile, the militant Bagong Alyansang Makabayan said Esquivias’ resignation demonstrated the seriousness of the fiscal crisis.

“The problem with tax collection is more systemic than anything else. However, there appears to be some pressure on Esquivias especially now that the national government is set to exceed its budget deficit target,” Renato Reyes Jr., secretary-general of Bayan, said.

“The pressure (on Esquivias) is likely intense because of the looming P308-billion budget deficit. The people in the BIR are in the unenviable position of collecting taxes to meet the ever growing and often unjustified expenditures of the Arroyo government,” Reyes noted.

“It is also lamentable that when there is a shortfall in collections and a fiscal crisis ensues, cutbacks on social services occur,” he added. – With Katherine Adraneda, Helen Flores, Marvin Sy

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1
  • Follow Us:
Healines Skinning Right, pagematch: 1, sectionmatch: 1