RP losing P300 billion a year on poor tax administration

MANILA, Philippines - The government is losing P300 billion a year through poor tax administration in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC), opposition Sen. Francis “Chiz” Escudero said yesterday.

He said that from the BIR alone, the government is losing roughly P200 billion a year because of poor tax administration while from the BOC, the government is losing P100 billion a year.

Because of these revenue loopholes, Escudero said the government should not even consider increasing taxes. He said that by doing so, the government is cutting corners instead of addressing the issue properly.

“I do not agree in increasing taxes in any shape, size or form,” Escudero said during the Economic Agenda of the 2010 Presidentiables forum of the Economic Journalists Association of the Philippines (EJAP).

He said the government should first address rampant corruption in the country before considering raising taxes.

 “On the average, around P300 billion is lost through the BIR and the BOC. Why? Officials or employees of these agencies exercise discretion. In my book, discretion in government offices is equal to corruption. Minimize discretion and you minimize corruption. Eliminate discretion and you eliminate corruption,” Escudero said.

Escudero also said that according to the 2008-2009 Global Competitiveness Report, corruption has been identified as the most problematic factor for doing business in the country.

 “We also ranked very low in these sub-categories: Diversion of public funds; public trust in politicians; favoritism; and wastefulness of government spending. All of these underscore the fact that in the eight years that Arroyo was head of state, we nose-dived into oblivion,” he said.

The lawmaker said the Arroyo administration has been plagued by corruption scandals and controversies, making the country one of the most corrupt nations in the world.

At the EJAP forum yesterday, Escudero also laid down his six-point socio-economic agenda which emphasized agriculture self-sufficiency, lower costs of doing business, investments in education, and infrastructure development.

“The goal is the creation of millions of new jobs and livelihood opportunities. This would necessitate being able to successfully attract much greater amounts of direct investments, especially foreign investments,” Escudero said.