Jail corrupt BIR examiners

Tax collectors were among the most despised people during the time of Jesus Christ, when they were derided in the Bible as traitors for collaborating with an oppressive government, forcing their own people to pay more than they should and then pocketing the considerable difference.

Millennia may have passed, but the hate toward unscrupulous tax collectors has not waned in modern times. And for good reason.

In the Philippines, exploited taxpayers continue to suffer from the scourge of corruption as revealed by an officer of the Philippine Chamber of Commerce and Industry (PCCI) during a Senate hearing last week.

Yolanda dela Cruz, PCCI vice president for the National Capital Region (NCR), lamented how some examiners of the Bureau of Internal Revenue (BIR) have been extorting millions from entrepreneurs, wielding the feared letter of authority (LOA) as their weapon.

This, despite assurances made by the Department of Finance (DOF) and the BIR in January this year that the BIR has “designed concrete reforms to make audits fairer, more predictable, and more accountable” as part of “big, bold reforms to improve the ease of doing business and strengthen trust in government.”

Modus operandi

The DOF and BIR said that with the reforms in the audit system, the BIR lifted the two-month suspension of all field audits and related operations, including the issuance of mission orders and LOAs that authorize revenue officers to audit taxpayers’ books of accounts and check for possible deficiencies or violations of tax laws.

The BIR had suspended the field audits in November last year precisely because of complaints that the LOAs were being weaponized by shameless revenue officers to exploit taxpayers and force them to pay.

During the Senate blue ribbon committee hearing last year that led to the suspension, Sen. JV Ejercito cited various modus operandi, including the issuance of multiple LOAs to the same taxpayer within a short period, inflated tax assessments without valid basis, and negotiated settlements where only a portion was issued an official government receipt.

Following the uproar and concerns raised by business groups and even ambassadors, Finance Secretary Frederick Go assured the public last year that the suspension was geared toward “cleaning up the system, restoring integrity and public confidence,” on grounds that the government’s power to tax “must always be exercised with fairness, transparency and accountability.”

Under-the-table schemes

But apparently, erring BIR examiners either did not get the memo on the reforms or willfully ignored it.

Dela Cruz recounted how just shortly after she opened a food processing machinery company, she received an LOA from the BIR demanding payment of P6 million.

The first examiner she dealt with agreed to a compromise and issued a corresponding official receipt to show that the payment actually went to government coffers. But more examiners followed, and were not subtle about their demands for illegal payoffs.

“What the BIR does, which I think everybody is experiencing, is they get more from under-the-table schemes than the one that we are paying to the BIR,” said Dela Cruz during the hearing of the Senate committee on trade, commerce, and entrepreneurship chaired by Sen. Bam Aquino.

“If the government will remove all these unscrupulous and corrupt BIR examiners, the government will earn more,” she added.

Dela Cruz’s painful experience is unfortunately far from unique, as other PCCI members have gone through–and still going through–the same ordeal, not just in the NCR but in other regions as well, indicating that the rot in the BIR has extended across the country.

Cost of doing business

This deprives the government of badly needed revenues while micro, small, and medium scale enterprises that account for 99 percent of registered companies in the country and employ two out of three workers are subjected to constant harassment and increased cost of doing business that hamper their ability to earn a decent income and provide employment.

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Gold for the field, lead for the pen

The BIR should thus be taken to task for failing to weed out these bad eggs that are spoiling the entire organization tasked to raise P3.393 trillion this year.

It should therefore step up efforts to achieve what it set out to do in December last year–improve enforcement of tax laws and audit oversight to eliminate discretion and bring back fairness and transparency in the system.

Clearly, audacious tax examiners have been up to their old tricks and they will continue to wreak havoc until they are made to suffer severe consequences of their actions.

As Senate President Sherwin Gatchalian said, it is not enough to just file cases against bad actors within the BIR bureaucracy, the corrupt should be jailed.

Only then will the government have any hope of thoroughly cleaning up the agency of lawbreakers from within and restoring public’s eroded trust in the BIR.

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