NGOs favor passage of NARA

A coalition of non-government organizations (NGOs) and academic institutions pushing for the passage of proposed revenue reform measures in Congress notes that government’s internal revenue collections as a percentage of the gross domestic product (GDP) has consistently gone down since 1998˜from a high of 13 percent in 1997 to 9.92 percent last year.

The national government slid back to a deficit mode beginning 1998 after posting surpluses from 1994 to 1997 during which the tax effort also rose from 9.9 percent to 13 percent, said the Transparency and Accountability Network (TAN).

The TAN is pressing for the passage of the law that will replace the BIR with the National Authority for Revenue Administration (NARA).

Professor Francisco Magno of La Salle’s Institute of Governance and member of TAN’s executive council, said the deficit rose from P50 billion in 1998 when tax effort was 12.64 percent to P212.7 billion last year when the tax effort dropped to the 1993 rate of 9.9 percent.

Magno said these paralleled events indicate loopholes and weaknesses in tax administration that cause government to lose billions of pesos in revenues. He likewise did not discount various levels of corruption.

Had the Bureau of Internal Revenue (BIR) kept its tax effort at 13 percent of GDP, the deficit could have been reduced dramatically, if not totally wiped out, Vincent Lazatin of Pagbabago@Pilipinas added.

Lazatin said the measure attempts to "de-politicize" the government’s revenue collection agency and enhance its accountability and transparency. Under the proposed reform, NARA will operate as a wholly government-owned corporation governed by a seven-man Internal Revenue Board headed by the Secretary of Finance and with three representatives from the private sector. The other members are the heads of the Department of Budget and Management, National Economic Development Authority, and Securities and Exchange Commission.

The proposed law also seeks to raise the level of professionalism of the new tax administration agency by enforcing strict qualification standards, merit system, and performance evaluation system for its officials and employees based on technical expertise, integrity, and probity like lifestyle checks.

The new agency will also be autonomous in the sense that its budget will be fixed at one to two percent of collections for the preceding year. That measure was designed to rid the agency of the political wheeling and dealing that often accompany congressional appropriation for specific government agencies.

The NARA is similar to efforts made by New Zea land,aPeru and Singapore.