BIR chief backs common revenue collection body

MANILA, Philippines - The creation of the Philippine Revenue Authority (PRA) that will consolidate the functions of Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) will strengthen the government's revenue generation, BIR Commissioner Sixto S. Esquivias IV said. At the sidelines of a tax campaign kick off last week, Esquivias said he is supportive of House Bill 6007 filed by Camarines Norte Rep. Liwayway P. Vinzons-Chato transferring the functions and powers of the main revenue generating agencies to the PRA. "Personally, I am in favor of it. What is more important for me is we will be able to extricate ourselves from the coverage of the standardization law, which has been rendering us incapable of attracting some good recruits especially my former students. I cannot convince them to join us in the BIR especially those who I know are brilliant. I cannot compete with the private sector in terms of good compensation," Esquivias said. When Esquivias assumed office in November, he vowed to exclude the BIR from the coverage of Republic Act 6758, otherwise known as the Salary Standardization Law. The law enacted in 1989 rationalizes the payment of basic salaries to all government personnel including those in government-owned and controlled corporations and government financial institutions. Quezon Rep. Danilo E. Suarez has filed a bill exempting the BIR and BoC from the salary standardization law, saying these are "profit centers for generating tax and custom duty revenues for the entire national government." Vinzons-Chato said earlier the PRA will be given fiscal and administrative powers that will allow a "decentralized system of administration necessary to discharge its mandate." It will assess and collection national internal and customs revenues, taxes, fees, and charges. It will also implement all forfeiture, penalties and fines, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts. The former BIR chief admitted the proposed law might be seen by some as "drastic." However, Vinzons-Chato believed her bill is "more of a necessity" especially when "competitiveness of governments are measured by how well it manages its bureaucracy for the effective delivery of public service." The PRA will enforce the supervisory and police powers mandated by the National Internal Revenue Code, Customs Code or other laws. Meanwhile, BoC will be known as the Philippine Border Services Authority. "She wants to strengthen the BIR by including collection of taxes from the ports. The BoC will be relegated to border control. The functions previously done by the BoC in terms of tax collection will be incorporated with the BIR's functions. It may seem the BIR will be abolished but I think it is the same body and the same people performing the task," he said. This is not the first time a legislator filed for changes in the BIR. Senator Miriam Defensor-Santiago filed Senate Bill No. 2202 to create a new internal revenue agency, which will be attached to the Department of Finance, to raise revenues to finance the operations of the government consistent with fiscal policy and revenue collection targets. It will have an authorized capital of P10 billion that will be fully subscribed by the government. It will receive from the government an annual service fee equivalent to not less than 1% but not more than 2% of the revenues collected in the immediately preceding calendar year. The creation of a public organization with corporate-like features that will replace BIR has higher potential of improving the efficiency and effectiveness of tax administration in the country, the National Tax Research Center (NTRC) said last year. However, NTRC executive director Lina D. Isorena said the transformation of the BIR alone into a National Revenue Authority “does not guarantee that the problems of the anemic revenue generation and weak tax administration will be solved." Changes should be accompanied by improvements in the administrative support systems particularly the long overdue completion of the bureauwide tax computerization program as well as changes in tax policy and structure that will “enhance transparency and simplicity in the systems and accountability of revenue personnel." -Ruby Anne M. Rubio, GMANews.TV