Tax chief quits as govt deals with revenue cut

The Philippines’ tax chief abruptly quit his post last Friday, just two days short of marking a year in office and as the government continues to deal with below-target revenue collections. Bureau of Internal Revenue (BIR) Commissioner Sixto S. Esquivias IV had tendered his resignation and would likely be replaced by Senior Deputy Commissioner Joel L. Tan-Torres, sources said on Saturday. This was confirmed by Finance Secretary Margarito B. Teves, who replied via text message, when asked if the sources’ claim was true: "Yes [Mr. Esquivias resigned last] October 30. Sorry I cannot disclose yet [who will be the new BIR chief]… to be decided and approved by President Gloria Macapagal-Arroyo." Mr. Esquivias or Mr. Tan-Torres were not immediately available for comment. Sources, however, said one reason would be the BIR’s most likely being unable to meet this year’s P798.5-billion collection target. Executive Order 827, which created the position of Senior Deputy Commissioner, states the said official will perform the Commissioner’s function in the latter’s absence. It was not immediately known if this means Mr. Tan-Torres automatically becomes the officer-in-charge of the tax bureau. Sought for comment on Sunday, Tammy H. Lipana, chairman of the tax committee of the Philippine Chamber of Commerce and Industry, said: "I am surprised. But I respect his (Mr. Esquivias’) decision. His task is difficult considering the global economic crisis." "I hope the next commissioner is familiar with the revenue laws and regulations… The next commissioner should work hard to collect the receivables [from taxpayers] and to appeal to taxpayers to pay the right amount of taxes. "He must continue the programs that are in place." Alexander B. Cabrera, managing partner of Isla Lipana and Co., said the next tax chief should be an efficient leader willing to listen to the concerns of businesses. "I hope the new commissioner will also be sensitive to businesses. He should be fair to businesses to improve compliance. He should also be an objective and effective administrator," he said. The BIR, which accounts for around three-fourths of the government’s tax revenues, has often been criticized for missing its revenue targets. This year it has continued to fall deeper in the red during every quarterly reckoning. The tax bureau collected just P154.8 billion in the first quarter, short of its P165.3-billion goal, which officials said was due to a slower economic activity and legislated tax cuts. The shortfall widened to P12.8 billion in the first half as the BIR managed to collect only P375.6 billion against the target of P388.4 billion. As of end-September, the bureau was down by P39.2 billion as it earned P557 billion against the goal of P596.2 billion. The bureau needs to collect P241.5 billion in the last quarter to meet its P798.5-billion target for the year. Officials, however, have admitted that this may be impossible as recent storms have disrupted the operations of businesses. Mr. Esquivias, a lawyer and certified public accountant, started to work for the bureau in 1977 as field examiner. He then rose from the ranks and held various positions including Assistant Chief of Assessment Division and Deputy Commissioner for Legal and Inspection Group. After more than two decades of service, Mr. Esquivias retired from the bureau in 2000 to work as managing partner of the Esquivias, Cruz, Condo and Yabut law firm. He, however, returned to government service on Nov. 1, 2008 after he was named BIR commissioner to replace Lilian B. Hefti. His resignation makes him the fifth tax chief since 2001 to leave his post under the Arroyo administration. - BusinessWorld