Duterte administration to overhaul BIR – Alvarez

MANILA, Philippines – The incoming Duterte administration intends to undertake a top-to-bottom revamp of the Bureau of Internal Revenue (BIR), according to presumptive speaker Rep. Pantaleon Alvarez of Davao del Norte.

“Corruption is rampant in the BIR. All BIR officials and personnel, including janitors, should be changed,” he said in a television interview.

He said the sweeping revamp aims to lessen corruption and bring in more revenues for the plans of the next administration, including the promised salary increase for soldiers and policemen, whose pay has just been upgraded by President Aquino under Executive Order 201.

The presidential issuance covers all other government personnel, including those of local government units and state corporations.

Alvarez said another measure that would be taken to increase revenues is the simplification of the tax collection-payment process.

Incoming president Rodrigo Duterte has also promised to reduce income tax by indexing tax rates to inflation.

Incoming finance secretary Carlos Dominguez has said the P500,000 that was subjected to the maximum rate of 32 percent in 1997, when the tax code was enacted, is now probably worth P1 million.

This means that the 32 percent tax should start with a P1-million taxable income, he said.

Other Duterte aides said rich taxpayers would be made to pay more.

BIR Commissioner Kim Henares has vowed to retire when President Aquino steps down on June 30.

During the campaign, at least two presidential candidates – Vice President Jejomar Binay and Sen. Grace Poe – said they did not want Henares to remain in office a minute longer on June 30.

The BIR is the government’s principal revenue-raising agency. This year, it is expected to collect about P2 trillion, or two-thirds of the national budget of P3.002 trillion.

Aquino has praised Henares for increasing collections to record levels during his administration.

Before he took over in 2010, he said the highest collection was recorded in 2008 at less than P800 billion.

He said the good performance of Henares and her tax collectors allowed his administration to double the national budget and allocate more funds to infrastructure, education and other social services.