Davao City: The incoming heads of the country’s revenue-generating agencies on Tuesday said that tackling corruption in the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) will be their top priority when they step in on June 30.
“The mandate of the President is to clean the bureau. Hopefully [we can do that],” Incoming Internal Revenue Commissioner Cesar Dulay told reporters on the sidelines of the Duterte administration’s consultation workshop with the business community here.
Initially, Dulay said he would recall all letters of authority (LOA) issued by outgoing BIR Commissioner Kim Henares.
The BIR issues a LOA to inform a taxpayer that he or she is being investigated for possible tax violations.
“There have been reports that they have been sitting on these investigations for some time. I just want to recall them and study how they are acting on them,” he said.
“The word is review. We are not pulling back. If there is a basis for investigation, then we should go for it. What we don’t want is it sitting in the hands of the examiner for a long time,” Dulay said.
Recall ‘lifestyle check’ rule
In terms of revenue regulations, Dulay said that he might recall a recently released issuance of the current BIR chief that could subject property buyers and sellers to a tax probe aimed to gauge their financial capacity to acquire and keep real estate.
“We just want to recall and take a look at that particular,” he said.
Revenue Memorandum Order 24-2016 is intended “to ensure the tax compliance of the parties involved in property sale and transfer.”
“Parties to the said transactions may be subjected to an audit or investigation to determine their capacity to hold and/or acquire properties,” the order stated.
“In all cases (however), verify . . . that the parties (seller/assignor/transferor and
buyer/assignee/transferee) regularly files returns and report income sufficient to establish financial capacity,” it added.
The order covers transactions involving the payment of capital gains tax on property and non-traded stocks, donor’s tax, estate tax, expanded withholding tax, and those covered by tax-free arrangements under the law.
Dulay said this kind of regulation involving a lifestyle check can act as a tool for harassment and corruption.
“We’ll have to review all the others. I have not seen the others, but that particular regulation is what I have heard that worries the businessmen,” he said.
Meanwhile, incoming Customs Commissioner Nicanor Faeldon said there is no tried and tested solution to corruption, but the new administration will try to address that by instituting reforms in the bureau.
“I already stated the reforms that we are planning. The one we have to fast track is the computerization of Customs processes,” he said.
Faeldon recently suggested several reform measures to promote transparency in the BOC, such as using the United States trade transparency unit as a model of best practice in order to deliver more accurate pricing of products from other countries.
He also lamented the under-investment in proper scanning systems, and recommended the daily monitoring of shipment valuation.
Instead of Customs collections targets based on a percentage of gross domestic product (GDP), Faeldon said performance indicators should also contain grading on ease of doing business and facility of trade.
He further encouraged graveyard shifts and 24/7 operations to improve the BOC’s level of service.
“We will see what we can do to implement this as soon as possible, “ he said.
Faeldon also said that the new administration wants to remove the compulsory utilization of brokers for shipments, because some unscrupulous brokers are using their services to smuggle commodities to the country.