Government moves to restructure BIR

The Arroyo administration has begun the groundwork for the restructuring of the Bureau of Internal Revenue (BIR) beginning with the move to outsource non-core functions and the segmentation of taxpayers.

This developed as the BIR endorsed the dismissal of at least 20 revenue officials and personnel suspected of graft and corruption, the first crackdown in the agency since the administration took over.

Finance Secretary Jose Isidro Camacho told reporters that an executive order is being drafted to implement phase one of the BIR’s reform plan.

The order would cover the proposed segmentation that would allow the BIR to customize taxpayer services and improve collection from the different segments.

Internal Revenue Commissioner Rene Bañez explained the proposed executive order is in preparation for the proposed transformation of the BIR into a corporation to be governed by a Revenue Board and headed by a chief executive officer with a fixed term.

According to Bañez, the ultimate objective was to de-politicize the bureau but the more radical reforms would have to go through Congress. In the meantime, he said the BIR could undertake preliminary reforms that would require only an executive order from the president.

The proposed order would implement the taxpayer and industry-focused operation of the BIR and the bureau’s tax information and database would be organized according to these segments.

Bañez said this would enable the BIR to develop a reliable database for revenue forecasting and performance monitoring. It would also allow the agency to develop taxpayer profiling.

Bañez also said the EO would implement the proposal to outsource BIR’s non-core functions, including information technology. The EO would also direct the bureau’s internal reforms, including the creation of cross-functional committees, and some degree of decentralization for faster decision-making.

"The important thing is to introduce a culture of accountability in revenue management," Bañez said.

Meanwhile, the BIR reported collections of P27.3 billion in the first 23 days of June, 14 percent better than the P23 billion recorded in the same period last year.

The target for the month of June set earlier this year is P29.1 billion.

"From all indications, we could surpass the target for the month as there are still seven revenue-collecting days remaining," said Internal Revenue Commissioner Rene Bañez during a forum sponsored by the Foundation for Economic Freedom (FEF) held in Makati City.

In the month of May alone, the BIR’s shortfall reached over P13 billion.

Bañez said that one of the reasons for the shortfall is that several big taxpayers were allowed to pay partial payments for their taxes due. Those partial payments are expected to be completed in June and the third quarter of the year.

"That is why we expected that the shortfall in April and May will actually be reflected in the third quarter," Bañez said. – With Ted Torres