Recto opposes BIR abolition

Sen. Ralph Recto opposed yesterday the abolition of the Bureau of Internal Revenue (BIR) and its replacement by the proposed National Revenue Authority, saying NARA wouldn’t mean higher tax collections.

"There is nothing in the bill creating NARA that guarantees that tax collection will rise," he said.

Recto‘s support for the measure is critical since the ways and means committee, which he chairs, is the panel that scrutinizes revenue-related proposals. His opposition to the bill means that NARA is headed for the graveyard.

What could further contribute to its death is the senators‘ resentment over the alleged meddling in state affairs by the US-funded Agile (for Accelerating Growth, Investment and Liberalization with Equity) project. NARA is an Agile brainchild.

"At the risk of being hit by Agile-launched Scuds, I would have to say that there is nothing magical in the NARA bill," Recto said.

Under the measure, the proposed revenue authority is to be run by a nine-member board composed of the finance secretary, budget secretary, economic planning secretary, governor of the Bangko Sentral ng Pilipinas, the chairman of the Securities and Exchange Commission and four private sector representatives.

Recto said he does not buy the idea that "these nine wise men are the solution to sliding tax collection."

He said at present, the five government representatives proposed to be appointed in the NARA board "already have a say on how the BIR is being run."

As for the planned private sector representation, he said there would be conflict of interest, especially if the representatives come from big business and banks.

He also expressed reservation over the "steep price tag" for NARA’s creation which would amount to P12 billion, representing the separation pay of BIR personnel.

"Why spend P12 billion to fire veteran revenue workers when we can use the same amount to improve the BIR, to increase employees’ remuneration to better motivate them?" he said.

Recto also pointed out that NARA’s creation would legitimize the porsiyento system as the envisioned authority would be allowed to share one percent to two percent of total revenues collection as "service fee."

On top of the fee, it would get five percent of collections in excess of target.