GMA TO BIR: GET THE BIG FISH
MANILA, AUGUST 14, 2007 (STAR) By Paolo Romero - President Arroyo ordered the Bureau of Internal Revenue (BIR) yesterday to intensify the crackdown against big tax evaders instead of focusing on small tax cheats.
Mrs. Arroyo issued the directive during a command conference at the BIR main office where she also congratulated revenue officials for exceeding their collection targets for July.
Under the Run After Tax Evaders (RATE) campaign, the President has asked the Department of Finance (DOF) to provide her with a weekly summary of the collection effort.
The President said while it was not the fault of the present setup, she noticed in the DOF reports that the BIR was concentrating on small cases.
“The biggest (tax evasion) case (in the DOF report) is P150 million and there are cases involving P2.7 million whereas there are billion-peso cases that are languishing and when I ask what’s the status they go around and ask who’s in charge of it,” Mrs. Arroyo said.
“The bigger cases should be given priority. For the same peso of legal talent, we’ll be able to collect more,” she said.
She told BIR officer-in-charge Lilian Hefti to focus on the large taxpayers unit because they account for 64.5 percent of the agency’s revenue target.
Hefti said the bureau is actively pursing the prosecution of tax evaders who are the greatest threat to the tax system.
President Arroyo has ordered the creation of two new task forces aimed at boosting the government’s revenue generation performance.
During a speech before the 16th annual general assembly of the Federation of Philippine Industries (FPI) at the Hotel Intercontinental in Makati City yesterday, Mrs. Arroyo announced the creation of the task force on revenue enhancement and the anti-smuggling task force aimed at improving the government’s fiscal situation.
The task force on revenue enhancement would be headed by Finance Secretary Margarito Teves while the anti-smuggling task force would be under Antonio Villar Jr., head of the Presidential Anti-Smuggling Group.
The President said her decision to create the two new task forces came after her command conference with the Bureau of Customs last Friday.
She said the two new task forces would be similar to the anti-red tape task force she created earlier, which is headed by Trade Secretary Peter Favila.
The task forces will have representatives from the private sector and in recognition of the FPI’s efforts in curbing smuggling in the country, the President invited the organization to serve as the private sector group in the anti-smuggling task force.
During the command conference at the BIR, Hefti presented the Revenue Watch Dashboard and Local Government Unit (LGU) Revenue Assurance System, the two programs intended to improve collection and plug leaks, both of which can be monitored by Mrs. Arroyo through online linkages to her office.
The dashboard is an online performance monitoring system that will promote transparency, enhance compliance and encourage achievement across the different tax units, she said.
It is a computerized online facility that will monitor revenue collections versus targets at all levels of organization in the BIR, from the national level to the examiners.
The online program will allow the BIR to monitor the progress of collections at any given time. It will also identify areas with revenue leakage, returns with inconsistencies, unusual patterns of tax declarations, and long running and unresolved notices and audits.
The Revenue Watch Dashboard will be accessed by key BIR officials, including regional directors, and the Commissioner, the Secretary of Finance, and the President.
Under the LGU Revenue Assurance System, the program matches BIR data with LGU data on taxpayers.
It also reports inconsistent declarations as well as fictitious taxpayer’s identification numbers.
The BIR recorded a collection of P57.9 billion in taxes for the month of July, slightly higher than the P57.83-billion target for the period.
From January to July, however, the agency’s tax collection reached only P392.6 billion, still below the P431.1-billion target for the period.
Hefti said the agency met the July target due to the measures implemented during the month.
These include enhanced measures to detect and deter fly-by-night establishments, reiteration of the mandatory obligation of top 10,000 corporations to withhold taxes on their purchases and expenditures and additional audit procedures to address leakage in
value-added tax collections.
The agency also implemented specific audit of private companies registered with the Philippine Economic Zone Authority and the Board of Investments to verify their fiscal incentives claims.
“The bureau is also actively pursuing the prosecution of tax evaders, arguably the greatest threat to the tax system,” Hefti said during yesterday’s command conference.
Data from the Department of Finance (DOF) showed that the BIR incurred a revenue shortfall of P38.6 billion in the first half of the year as revenues reached P334.7 billion against the target of P373.3 billion.
For the whole year, the BIR has a revenue target of P730 billion.
With the better-than-expected BIR collections in July, officials said the government’s budget deficit for the month also likely fell below the P20.9 billion target.
This would be a marked improvement from the fiscal performance in the first half of the year.
The government incurred a budget deficit of P41 billion in the first half of the year or P9.7 billion higher than the programmed shortfall of P31.3 billion.
Total government revenues in the first half of the year reached P510.3 billion or P47.7 billion lower than the target of P558 billion but higher than the P471.0 billion posted in the same period last year. With Marvin Sy, Iris Gonzales, AFP
Chief News Editor: Sol Jose Vanzi
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