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PRESIDENT Arroyo is keeping Bureau of Internal Revenue (BIR)
Commissioner Jose Mario Buñag pending a further review
of the bureau’s performance under his watch, Finance
Secretary Margarito Teves said on Tuesday.
At the
same time, Buñag indicated to reporters his unease with
the controversial Administrative Order 625 creating a
new office with vast powers, to be headed by a deputy
commissioner for Audit, Fraud and Investigation, hinting
he was not consulted about it.
He also
gave a report to President Arroyo, whom he met Tuesday,
showing that the BIR actually achieved an increase in
its tax collections in 2006 of 20 percent over that of
2005, “the highest increase in 10 years [since 1997],”
notwithstanding the renewed focus on the shortfalls for
this year’s first quarter, which were attributed to
several factors, including the initially
disputed—because it was deemed unrealistically
huge—revenue targets set for 2007.
The BIR
incurred a P12.1-billion shortfall in the first quarter,
collecting only P143.11 billion of its target P155.2
billion; it cited external factors such as
lower-than-expected inflation that led to lower
value-added tax (VAT) collections.
The BIR
shortfall, together with the failure of the Bureau of
Customs to meet its revenue target for the first
quarter, led to a P52-billion deficit in the first
quarter, P6.1-billion more than the programmed deficit
of P45.8 billion for the period.
In his
latest report to the President, Buñag said the BIR
collected a total of P652 billion in 2006, exceeding its
“real target” by P30 billion. Additional collections
from 2005 totaled more than P114 billion, he added.
He also
explained that while the budgetary goal for 2006 was
P675.4 billion, P26 billion were foregone or could not
be realized because actual interest rates and inflation
rates were lower than forecast.
Teves
told reporters in a text message after a lunch meeting
with the President and Buñag in Malacañang that Mrs.
Arroyo expressed to the BIR chief her concern about the
recent shortfall in BIR collections.
“The
President has talked to Commissioner Buñag and has
expressed her concern about the slippages in BIR
collection, but would like to wait for more recent
information for her to make a final decision on the
matter as soon as possible,” he said.
In an
interview at the Independence Day Vin D’ Honneur in
Malacañang a couple of hours before the meeting, Buñag
said that it is not fair to gauge the BIR’s performance
on a specific period.
“We have
to wait until the end of the year, really, to be fair to
the people in the bureau and to the government. The
government is doing everything it can to shore up
revenues but it’s hard to measure the performance on a
very short time. It should be annual,” he said.
He
admitted that he has talked to the President on the
phone “about the [BIR’s] performance,” but she did not
mention anything about his possible replacement.
On his
reported impending resignation, he said: “Nothing
definite on that . . . . We will wait for the
President’s instructions. We will just follow what the
President tells us. I came in at the request of this
government to help out and it depends on the government
to determine [when I’m no longer needed]. . . . I serve
at the pleasure of the President.”
He said
at the time that he has not submitted a courtesy
resignation.
Buñag
also said that he will order a review of Executive Order
625, which creates the Office of the Deputy Commissioner
for Audit, Fraud and Investigation under newly appointed
deputy commissioner Cesar Lim, the former South Makati
revenue district officer.
The new
office would run the BIR’s Run After Tax Evaders
program, prioritizing large taxpayers and revenue
districts, and takes over the functions of the BIR-Large
Taxpayers’ Service, which collected only P20 billion in
the first two months of the year, leading to a
P10.3-billion shortfall for the BIR during that period.
Buñag
said that EO 625, which his office was not consulted
about, may have an adverse impact on BIR operations.
“I’m
having it studied [to] see what are the implications
actually against the other EOs and even the Tax Code. .
. . There’s something funny about the EO so we have to
seek clarifications. . . . It has to be looked at by
both our operations and our legal [staff] because it
would have an effect on our operations,” he said.
He said
he will recommend an amendatory EO to EO 625 “if
needed.”
In
explaining the agency’s dilemma, Buñag said the budget
misallocated P27 billion to the BIR, which should have
been assigned as a target of the Bureau of Customs.
Hence the “real target” of BIR collection was P622
billion. As actual collection totaled P652 billion,
there was really an excess of collection in 2006 over
that of the previous year by P30 billion.
According to the BIR report, Buñag achieved the
20-percent increase in 2006 collections over 2005 by
introducing innovative administrative and procedural
reforms in the BIR, and by motivating the BIR personnel
to exert their best efforts in tax collection.
Among
the reforms undertaken in his watch are:
§
Setting
up the tax reform administration group.
§
Cleaning
up the registration data base.
§
Starting
the nationwide rollout of the integrated tax system to
computerize the operations of revenue district offices.
§
Starting
the preparation of audit manuals for the banking,
insurance, telecommunications and other
industries.
§
Starting
the use of the computer- assisted audit technique.
§
Starting
with the use of bench- marking and profiling methods on
a more extensive scale.
§
Introducing the automation of BIR’s account receivables.
§
Starting
human-resource development projects for bureau
personnel.
In
undertaking these reforms, the BIR obtained the
assistance and support of international agencies like
the Millennium Challenge Account, the World Bank, IMF,
SIDA, AusAid and JICA. |
