In a report to Finance Secretary Jose Isidro Camacho, BIR Commissioner Guillermo Parayno said a total of 127 BIR employees are under investigation for various alleged offenses ranging from misconduct to graft and corruption. One has already been suspended for a year for grave misconduct.
Camacho told reporters over the weekend that the BIR would likely open more cases next week to emphasize the agency’s resolve to reduce corruption in the country’s top revenue agency and help cut the government’s gaping budget deficit.
"This is how serious we are about addressing our revenue problems," Camacho said, referring to the government’s budget deficit which is expected to reach P202 billion this year. Last year, the budget gap reached P212 billion.
In controversial downgrades of the country’s credit rating, international rating agencies noted that even if the government meets its revenue targets for the year, taxes are taking a smaller role in the country’s economic production.
A London-based credit rating agency noted earlier this month that the government’s tax effort "will remain on a declining trend," falling below 14 percent of gross domestic product (GDP) compared to over 19 percent in 1997.
GDP, the international standard of economic production, is the total value of products and services produced in a country minus the income of workers and corporations from overseas.
The rating agency suggested that the Arroyo administration would have to change its tax policy to improve its tax effort but the agency also doubted such a reversal would be likely in the administration’s remaining 11 months in office.
Because of the government’s inability to collect enough revenues to fund its projects, the government would have to borrow more from overseas although no less than President Arroyo declared during her recent state visit to the United States that the country has already overborrowed.
After the latest downgrade, Camacho himself said that the downgrade would not likely reverse the government’s borrowing plans although the government’s debt load had already reached P2.897 trillion at the end of March.
Next to Japan, the Philippines is the largest sovereign debtor in Asia and has targeted offshore borrowings of $2.4 billion this year while still needing to raise around $900 million.
Camacho stressed, however, the government would not likely borrow from abroad until the third quarter but only to allow the debt-strapped state power firm National Power Corp. to raise its own funds from international debt markets.
"The budget deficit is everyone’s problem and cleaning up goes both ways," said Camacho, who used to be an investment banker before joining the Arroyo administration. "We have to penalize erring revenue employees and the public has to stop condoning graft."
The three BIR officials, identified as assistant revenue regional director Aguinaldo Miravalles, assistant revenue district officer Kamil Bajunaid and former revenue district officer Godofredo San Jose, were charged after they were found to have falsified official records so they could stay in office beyond the age of retirement.
"By making false statements, these officials managed to convince judicial authorities or the Civil Service Commission to order a change of their birth dates on their official records," the DOF statement read.
According to the DOF, this has allowed the officers to stay at the BIR and "reap the financial rewards of their other illegal acts."
The offenses, the DOF said, carried a maximum prison term of six years, permanent dismissal from the service as well as cancellation of their retirement benefits.
The DOF is also investigating graft charges against revenue officials after Parayno referred the charges to the DOF and the Presidential Anti-Graft Commission (PAGC).
"It is best that the investigation be conducted by bodies (outside of) the BIR," said Parayno. "This way, the result will be more credible in the eyes of the public."
If the investigations were to be conducted by the BIR itself, Parayno expressed fear that it would only fuel suspicions of a cover-up or white-wash.
Parayno said the BIR will concentrate on "re-engineering" the commission and completing the reorganization process that he initiated last week with the reassignment of nine top BIR officials after a performance audit.
According to Parayno, the BIR, PAGC and the DOF central management and information office have signed an agreement of how to investigate BIR officials and employees.
Parayno explained that since some of the officials were presidential appointees, the PAGC would be primarily responsible for investigating their conduct and the rest would be investigated by the DOF.