BIR chief Hefti resigns

MANILA, Philippines – Malacañang confirmed yesterday the resignation of Lilian Hefti as head of the Bureau of Internal Revenue (BIR), the second such announcement in two days.

Press Secretary Jesus Dureza said President Arroyo had accepted Hefti’s resignation and her replacement has already been chosen.

Dureza said Finance Secretary Margarito Teves, who is currently in the United States for a World Bank meeting, would be announcing Hefti’s replacement when he returns.

Last Thursday, Malacañang announced the resignation of Chief Presidential Legal Counsel Sergio Apostol who has joined the board of directors of Union Bank of the Philippines.

While no official reason has been given for Hefti’s resignation, Dureza said that it might have something to do with the failure of the BIR to meet its collection targets.

“There is no official announcement as to the reason, but my take is that every official has to be measured by one’s performance and apparently the fact that the BIR has not met its self-assigned targets is probably one of the reasons why (she resigned),” Dureza said.

Executive Secretary Eduardo Ermita, on the other hand, told reporters on the sidelines of a House budget plenary session: “Commissioner Hefti has resigned for health reasons. The President has already chosen her replacement. He is a former BIR official who rose from the ranks like Commissioner Hefti.”

Sources from the House of Representatives told The STAR yesterday that Hefti’s replacement would most likely be retired deputy commissioner Sixto Esquivias.

“He served under Commissioners Beethoven Rualo and Dakila Fonacier, before availing of early retirement,” one source said.

Other sources also said the shortlist of choices for Hefti’s replacement includes, aside from Esquivias, former Customs commissioner Antonio Bernardo and former BIR deputy commissioner Kim Henares.

Responding to questions, Ermita said the President would definitely not appoint a defeated administration senatorial candidate or a politician as the new BIR commissioner.

The BIR has conceded that it would fall short of its P854-billion target for the year and has sought a cut in its 2009 target of P968 billion.

The bureau said that the economic slowdown as well as other factors – such as the exemption of minimum wage earners from the income tax – have all made an impact on its collection efforts.

For this year, the BIR expects its collections to reach P801 billion only.

The BIR accounts for about two-thirds of government revenues.

Dureza noted that the President is very particular about the revenue collection effort, especially at this time when the government has increased its spending for infrastructure and social services.

“Meeting revenue targets is a very important part of good governance, especially at a time when we have to strengthen the fiscal position of our government to be able to deliver our targets especially on spending,” Dureza said.

He said that the President expects better performance from her officials and that the revenue targets must be met.

When Hefti assumed the top post at the BIR last year after Jose Mario Buñag was sacked, the President was all praises for her as another woman holding a sensitive post in government and for spearheading the recovery of the bureau in terms of tax collection.

The Bureau of Customs was then the laggard and was being criticized for consistently missing its collection targets.

However, this time around, the BOC has improved on its performance and has even exceeded its targets for the first nine months of the year.

“As far as meeting targets, I understand that the Customs’ targets have been met. That’s why we see a very positive performance as far as the Customs is concerned based on the revenue targets that have been met,” Dureza said.

Hefti, meantime, refused to answer calls to her office yesterday to clarify the real reasons for her resignation, even as talk among government officials and businessmen has circulated that she has been removed from office due to her failure to meet collection targets and her rumored discordant relationship with the Department of Finance (DOF), the BIR’s parent agency.

Finance Undersecretary Estela Sales said that the government would continue to work on its revenue stream despite the resignation of Hefti.

“Life goes on. They know their mandate,” she said, referring to the different tax collection agents and revenue officers.

Iron fist

Sen. Manuel Roxas II has challenged the next BIR commissioner to pursue tax reforms and allow for maximum collection of revenues for programs that truly benefit the people.

Roxas said the new leadership should have an “iron fist and political will.”

He also urged the bureau to look at improving collections from present non-taxpayers, like many professionals and self-employed individuals, rather than continuing to “bleed our workers dry.”

“We need someone at the helm who could maximize government’s tax collection efforts,” Roxas said, adding that tax collection should be improved to prevent a ballooning budget deficit.

While Roxas pushed for rigid tax collection efforts, the senator warned the BIR against unfair collections to meet its targets, particularly the bureau’s interpretation of the coverage of Republic Act 9504, or the law which exempts minimum wage earners from income taxes and increases the personal exemptions of other workers.

The BIR has so far insisted on providing the tax exemption for minimum wage earners only from July onwards, and to exclude minimum wage earners who get extra allowances from their employers.

Roxas has been pushing for the full implementation of RA 9504 to cover the months of January to June 2008, and has filed a petition at the Supreme Court for this, together with the Trade Union Congress of the Philippines. - With Iris Gonzales, Jess Diaz, Christina Mendez