Close encounters with gov’t crooks

An accountant of 30 years unburdens herself through this column. Requesting anonymity, she recounts her run-ins with government crooks. She hopes her story can help reform the Bureaus of Internal Revenue and of Customs, and other public agencies:

“(1) One of my first jobs was to audit a new import company of a Frenchman married to a Filipina. Operating leanly, it was manned only by the officers and an accountant-secretary. The financial worksheet listed importations, labor, and other actual costs. A column was titled simply as ‘30 percent.’ From the accountant I learned that they allotted 30 percent of total costs to Customs. It was for fast, hassle-free release of the goods. Being young then, I was bothered by that first encounter. I recalled what a college prof had told the class – that 99 percent of Customs personnel share their take from ‘deals’ with importer-exporters. That’s why they can afford to live in mansions. I was so scared I dropped the client. Years later I heard he was elected as officer of the European Chamber of Commerce in the Philippines.

“(2) The Frenchman’s brother, also married to a Filipina, owned a separate import firm. The BIR-Makati was watching him, and had called about a ‘tax deficiency.’ They haggled for a lower assessment, and I was at the office when the BIR team arrived to collect. I witnessed their ‘tax collection.’ We happened to leave the office at the same time, and they probably thought I expected a share, because one of them handed me a wad of peso bills. I was so shocked that I dropped it on the floor and ran away. I’m sure they thought I was dumb.

“(3) Another client, a constructor, was a ‘favorite’ of the BIR-Novaliches, Quezon City. Years ago it wrongly was assessed a P3-million VAT deficiency. I was asked to contest it at the BIR office. The supervisor angrily waved the worksheet at my face. Having computed it myself, I insisted that tax fully was paid. I spotted her mistake in tacking on huge VAT on on-the-spot local hires to clean up some construction site debris. That shut her up, but it was not the end of the story. The BIR kept assessing them for tax deficiencies, so they thought to just give under the table to avoid any more trouble. I advised against it, arguing that the BIR would keep returning for more. I was right; the demanded amount grew every year, starting with P600,000 to about P34 million. With that last assessment, the BIR team arrived ready to padlock the office. I learned later that the finance manager was able to haggle down the price to P11 million. Half went to the ‘dealers’; the other half was receipted to the government’s account.

“(4) The same constructor no longer takes on government contracts because of a sad experience. It was for a provincial bus terminal with travelers’ inns. On audit, I saw the item ‘legal fees,’ although there were no legal cases. They said it was actually ‘tong-pats’ (kickback) for the approving local official. I was told that the official’s rep would call often to collect, and complain if the bribe installment was low. Informed that it was a percentage based on actual collection from the local government unit, the rep worked for bigger releases from their cashier. The client made no profit from the project.

“(5) Still that same client had to increase capitalization. It had to pay the Securities and Exchange Commission P30,000 under the table to speed up release of documents.

“I narrate all this to confirm that there’s corruption at every level led by Customs, BIR, local governments, SEC, even in publishing of public school textbooks, another client’s business. If only we can stop paying out billions of pesos in bribes to crooked officials, there would be no need to increase taxes.

“One last gripe: why do City Halls charge employment fee before employees can start working there. My niece was charged such fee when she began to work as an auditor at our City Hall. Then she asked for transfer to another department. She was again charged employment fee before she could draw her first salary at the new post. Employment is not a business that they can tax!”

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