BIR and business share corruption guilt

A recent survey conducted by the Social Weather Stations gives another grim picture of the issue of corruption.

The survey, conducted from October last year to February, asked 500 managers from top corporations – and even the small and medium-enterprises – on their views on bribery and corruption.

What the results of the SWS survey tell us is that both the government and the private sector are guilty of corruption. And that both parties are rather cozy with each other, and apparently content to scratch each other’s back.

The survey findings also show that the business community is mired with a high incidence of dishonest business practices, from the simple non-issuance of receipts to large-scale corruption practices. Business managers admitted that they have budgets for bribery for transactions with agencies such as the BIR and the Bureau of Customs and several others.

BIR corruption not a myth

The survey confirmed that the long-drawn perception of corruption in the BIR is more a fact than a myth.

Respondents to the survey tag the BIR as the most corrupt government agency: for example, for every 10 respondents, seven have been asked for a bribe when paying taxes or getting license approvals. Yet only five percent of those who answered the survey say they dared to report these illegal activities; the rest found the exercise futile.

In a separate study, World Bank commented that only half of potential revenues are being collected by the BIR, and an additional P200 billion can be raised if only corruption in the bureau is contained.

Studies show that corruption in the bureau is apparently taking on a number of new faces. From the simple lagay to speed up the processing of tax matters, or an areglo to lessen tax payments, there are increasing allegations that some BIR agents embezzle tax payments by falsifying and manipulating records, or printing extra and unreported receipts and stamps.

An attempt to reform called IRMA

Through the years, efforts to reform the bureau through organizational reforms and leadership changes have been attempted. Yet, till today, the bureau continues to be mired in the same perennial problems.

Recently, a more drastic measure – specifically to abolish the BIR – was proposed. The first proposed replacement, the Internal Revenue Management Authority (IRMA), was passed by the 11th Congress but vetoed by the incumbent resident of Malacañang (because it was passed under the Estrada administration?).

Now comes NARA

Lately, taking off from the spurned IRMA, a supposedly much improved National Authority for Revenue Administration (NARA) has been introduced to replace the graft-laden BIR.

Unfortunately, even before NARA can be presented for deliberation in both chambers of Congress, loud and well-funded objections mostly by BIR employees are already muddling an objective discussion of the proposed bill.

There are a number of marked improvements in the NARA bill that make it more palatable than its predecessor. Under the proposal, NARA will be created as a P10-billion public corporation that will be tasked to exercise all the duties and powers of the BIR.

As a corporation, NARA shall receive an annual fee from the government for services rendered, which shall not fall below one percent or exceed two percent of all revenues collected during the preceding year. This fee shall be appropriated in the General Appropriations Act, effectively giving both the executive and the legislative the power to scrutinize NARA’s performance.

As an incentive, NARA shall also be entitled to receive five percent of annual collections in excess of its target, to be set aside by the Development Budget Coordinating Council (DBCC). Employees exclusively shall share this performance bonus.

In addition, BIR personnel who apply for positions in NARA shall enjoy "preferential absorption" into the new organization.

Sen. Ramon Magsaysay, who sponsored the same bill in the upper house, says that under the preferential absorption principle, BIR workers who meet the qualification in the selection criteria shall enjoy priority in the hiring of new NARA employees. Those not absorbed and are retired or separated from service will be given additional separation incentives.

Those who feel uneasy about the NARA are apparently more concerned with a specific clause in the proposed bill that not only stipulates strict adherence on merit and fitness in the selection of the new authority’s personnel, but that applicants may likewise be subject to lifestyle checks.

Resurrecting a decaying agency

How badly we need to improve revenue collection is well recognized. The BIR is the bread and butter of the National Government, accounting for more than 80 percent of the country’s revenue collections. But its ability to fund the growing requirements of the country and its people has been dwindling.

Those lobbying for the NARA passage say a professional revenue agency whose existence and remuneration will be based on performance is most likely to strive harder.

Whether the proposed radical change in the BIR structure will actually work is no longer the issue. The current structure is likened to a termite-infested building ready to collapse. Congress needs to work faster to resurrect a decaying collection agency to save the whole bureaucracy and country from going under.

And they can call it IRMA or NARA or whatever. But please not BIR or Bigay Ikaw Regalo.

Philippine seaweeds industry on TV

"Isyung Kalakalan at Iba Pa" on IBC-13 News (5 p.m. and 10:30 p.m., Monday to Friday) completes today the presentation of new challenges facing the presently considered sunshine industry in the Philippines, the seaweeds industry. Starting Monday, the segment will look back at the controversies surrounding the passage of the anti-money laundering law. Watch it.

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