NGOs, academe back bill to professionalize BIR

A broad coalition of non-governmental organizations (NGOs), business groups and academic institutions has expressed support for a Congressional bill seeking to professionalize the Bureau of Internal Revenue (BIR).

The Transparency and Accountability Network (TAN), which was formed to exchange information on development and initiatives in transparency and accountability in government, said they are prepared to launch a series of forum to discuss the merits of the proposed National Revenue Agency (NARA) bill.

The TAN is composed, among others, of the Philippine Center for Policy Studies, Development Academy of the Philippines, Makati Business Club, Evelio Javier Foundation, La Salle Institute of Governance, Institute of Policies and Governance, Philippine Governance Forum of the Ateneo de Manila University, Transparency International-Philippines, National Institute for Policy Studies, Procurement Watch Inc., Social Weather Station, and pagbabago@pilipinas.

"We are basically calling for more transparency and accountability in government particularly revenue generating agencies like the Bureau of Customs and the BIR," Dr. Francisco A. Magno, executive director of the La Salle Institute of Governance said.

Businessman Vincent Lazatin explained that without introducing new taxes, the new set-up would increase the percentage of tax collection revenues by 10 to 14 percent from its nine percent level last year.

"For every percentage increase in collection, the government earns an additional P40 billion. In other words, the target increase from a new BIR under the NARA could mean an additional tax revenue of P200 to P240 billion. It could be enough to cover budget deficit," Lazatin stressed.

He explained that based on studies made for the NARA bill, the new BIR could operate more effectively with just half of its existing 12,000 personnel.

The bill proposes to "corporatize" but not privatize the bureau. It is based on the successful experiences of other countries like Singapore, New Zealand and Peru.

It likewise proposes a fixed three-year tenure for the BIR head, who will be directly answerable to the NARA board. The board, in turn, will remain under the regulatory set-up of the Department of Finance (DOF).

In a report released by the TAN, it shows that the Philippines’ tax efforts has steadily grown from 9.66 percent in 1990, peaking to 13 percent in 1997. Since then, it has regressed to 9.92 percent last year.

The same report shows that the BIR collection growth rate stood at 11.74 percent in 1991, reaching an impressive 28.45 percent in 1994. It has maintained a double-digit growth until 1997.

In 1997, it grew by 20.68 percent then plunged to 7.14 percent to a 10-year low of 1.23 percent in 1999. Unofficially, the 2002 growth rate was placed at 1.28 percent or almost duplicating the record low level.

The national government and the global financial community had said that the problem of the huge budget deficit could be solved if the Philippine government improves its tax revenue collection.

And if the national government fails to reduce its deficit and ultimately bring a parity between expenditures and earnings, the global business community may not find the Philippines an interesting place to do business, much less lend out money.