Government to crack down on smugglers, tax cheats

Two days after she declared she would not run in 2004, President Arroyo ordered fiscal authorities to work harder on closing the government’s budget deficit by cracking down on smuggling as well as tax avoidance and evasion.

The President issued the order to Finance Secretary Jose Isidro Camacho during an informal Cabinet meeting at the presidential Mansion House in Baguio City where Mrs. Arroyo is spending the holidays with the First Family, Presidential Spokesman Rigoberto Tiglao said yesterday.

Tiglao said the crackdown on smugglers and tax cheats would be part of the executive actions that the President vowed to implement over the next 18 months now that she is "unburdened" by politicking.

The President has formed an Anti-Smuggling Intelligence and Investigation Center, headed by retired police official Miguel Coronel, which has been tasked to go after 21 smuggling syndicates identified by the Bureau of Customs.

Mrs. Arroyo has also formed a special task force, headed by Presidential Security Group (PSG) chief Brig. Gen. Hermogenes Esperon, to run after vegetable smugglers.

The President has also instructed Bureau of Internal Revenue (BIR) Commissioner Guillermo Parayno to press the collection suits it has filed against big companies for allegedly underpaid value-added tax remittances.

"By next week, these new executive actions would be undertaken to really start the momentum of reforms which would no longer be bound by political or populist considerations," Tiglao said.

After declaring she would not run in 2004, Tiglao said the President gave clear signals to her Cabinet that they should "no longer hold their punches because of popular sentiments" but implement their respective campaigns without having to consider their political implications to the administration.

"For example, there will be a crackdown against smuggling and tax evasion because (some) elite groups go roughshod on our society in not paying the correct taxes," Tiglao said without elaborating.

The crackdown order was apparently part of what the President herself described as a "series of powerful, positive actions that will improve the lives of our people."

Taming the deficit

During her Rizal Day speech announcing she would not run in 2004, Mrs. Arroyo specified the persistent budget deficit as among the country’s "fundamental weaknesses."

The government’s worsening budget deficit has led international credit rating agencies to lower the country’s credit rating, making foreign investors more wary and raising the interest rates on the government’s foreign borrowings.

For the first 11 months of 2002 alone, the gap in the government’s budget rose to P200.6 billion, more than P70 billion over the fiscal target for the entire year.

Earlier last year, the President sacked former BIR commissioner Rene Bañez, one of her first appointments when she assumed office in 2001, because of his alleged failure to raise public revenues.

Because of lower revenues, the government revised its deficit target to P223 billion, or 5.6 percent of gross domestic product (GDP). For 2003, the target is 4.7 percent of GDP.

The President named former Customs commissioner Guillermo Parayno to the top BIR post to replace Bañez and has so far stemmed the hemorrhage.

The BIR announced last week that it would hasten the sale of properties it had acquired as payment for taxes and penalties. – With Benjie Villa, Artemio Dumlao and Perseus Echeminada