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By Tess Bacalla
Philippine Center for Investigative Journalism
Conclusion
IN her 38 years at the Bureau of Internal
Revenue, Rizalina Magalona, whose last post was that of assistant
commissioner, had an unsullied reputation as a public official.
Until her retirement in 1999, she lived in a modest apartment in
Quezon City. She managed to buy a car only after she had left the
bureau, using a portion of her retirement benefits.
Other than the car, the little property she
calls her own she inherited from her parents, like the ancestral
home in Iloilo, where she now lives. At the time of her retirement,
Magalona’s net worth was much less than P1 million.
Magalona is a rarity in one of the two
government agencies that the public associates most with graft and
corruption.
That corruption in the BIR remains unchecked may
in part be due to the failure of its top officials to enforce
established checks and balances. Another reason is the insidious
system of “booty-sharing,” which, by keeping practically
everyone happy, means lower risks of having whistle blowers.
In a study on the BIR published in the
Philippine Journal of Public Administration in 1979, Leonor
Magtolis-Briones wrote that “when an employee makes a killing,”
he usually shares his loot with his “less enterprising officemates
[and even with his bosses] through blowouts, celebrations and even
direct doles.”
Two decades later, insiders say not much has
changed–except perhaps the sums involved. In the BIR’s regional
office in Valenzuela, for instance, insiders say some of the
personnel each get a weekly allowance ranging from P200 to
P500–sometimes even more.
To be sure, there could be a perfectly good
reason for such generosity. But both Nestor S. Valeroso, acting
regional director for Valenzuela, and Corazon C. Pangcog, assistant
regional director, deny they are showering their staff with cash.
Valeroso said, “There is no such happening in my office.”
Yet BIR insiders also say that in December,
Valeroso and Pangcog gave each staffer P1,000, contained in what
looked like a pay envelope, but one made out of light yellow linen
paper. The envelope also sported a traditional Christmas design,
besides the two officials’ pictures and signatures and their
holiday greetings.
BIR officials, including regional district
officers and regional directors, are also known to hold excessive
celebrations, especially on their birthdays.
One insider says, however, that the parties
nowadays are no longer as lavish as they were a few years ago. Yet
judging from the latest birthday bash of Valeroso, who reportedly
turned 51 on February 26, there is still little evidence of
penny-pinching going on.
For almost the whole day, Valeroso was feted by
friends and BIR employees, who feasted on a catered buffet lunch.
Gifts also came pouring in, including at least four roasted pigs
(down from about seven the previous year, said a member of
Valeroso’s staff) and a big box of fruits from the Caloocan City
regional district officer, Eduardo T. Bajador, who emceed a special
show put together for the celebrator.
Besides birthdays of officials, BIR employees
also look forward to summer, when they not only get to go to the
beach but are also able to gorge themselves on an abundant supply of
food and drink and vie for generous cash prizes in the games. At
their office’s outing in Subic last year, for instance,
Valeroso’s staff competed for prizes that ranged from P300 to
P500.
Not one member of the staff was asked to
contribute a single centavo. The government did not have to fork
over any money for the outing either. The people who combine their
“resources” to make possible extravagant celebrations in the
BIR’s premises took care of the expenses.
Indications are that such festivities at the BIR
may be curbed, if not stopped altogether, if only its chief made
monitoring of the bureau’s own people among his top priorities.
One BIR official, however, echoes some
observers’ sentiments in saying that the present BIR commissioner,
Guillermo L. Parayno Jr., is too “short-term” in his approach to
the problems besetting the agency.
“Puro siya press release,” says the
official, who also expressed dissatisfaction with Parayno’s
seeming preoccupation with collection-related activities at the
expense of other programs requiring his attention.
The BIR chief, however, told the PCIJ that he is
putting in place programs that “although mainly intended to
enhance revenues also address corruption through the use of
information technology.” These include computerizing the data on
large taxpayers, electronic transmission of tax payments and an
automated tax verification system, which allows for easy validation
of tax identification numbers, or TINs.
The BIR, however, has yet to act on a draft
memorandum that would authorize the postaudit, or revalida, after
almost six years of its nonenforcement. The draft was submitted for
approval in October 2002, but Parayno has yet to sign it. He said,
however, that the revalida will be among the projects that will be
carried out this year.
“As a management tool, revalida is the most
feared, in fact the only, check-and-balance mechanism, to the wild
and nefarious activities of revenue officers, supervisors, revenue
district officers and . . . need we mention the rest?” Magalona
said in a 2002 report she prepared as the BIR consultant of Agile, a
USAID-funded agency.
“Revalida and continuing management
performance audits are strong deterrents to the proliferation of
unreported and prescribed cases for which collections may no longer
be effected,” she added. “Only through an in-depth review/audit
of tax dockets submitted by revenue officers, as what is done in a
revalida, can one get the real picture of the quality, or lack of
it, of the field examinations conducted.”
“Clearly,” Magalona also observed,
“revalida is unable to take off, because it appears not to be
among the priorities of the BIR–the Internal Audit Division where
it is expected to be institutionalized is in total disarray due to
gross mismanagement and in fact fails to perform even its simplest
functions.”
The draft memorandum on the revalida, however,
is not the only proposal gathering dust on Parayno’s desk. Also on
the back burner is a draft revenue administrative order authorizing
the issuance of revenue bulletins that will regularly update
taxpayers on tax-related laws, regulations and rulings that are
inconsistent with, or have been superseded by, other issuances. Lack
of knowledge of these laws and policies makes taxpayers vulnerable
to harassment by BIR personnel.
Another is a draft memorandum order seeking to
provide “no-ruling areas.” Such a memorandum will prevent
unnecessary requests for rulings by providing taxpayers with
guidelines. Tax rulings, say insiders and former bureau personnel,
have been a source of tax leakages in the BIR, given the agency’s
power to interpret tax laws, which have been either abused or
applied improperly.
Both past and present BIR officials and
personnel, however, agree that corruption in the agency could also
be traced to a host of outside factors.
These include the failure of the Congressional
oversight committee to fully exercise its functions, as required by
the Tax Code of 1997. The committee has the power to monitor the
BIR’s tax administration system, particularly the conduct of tax
audits. It is composed of the chairmen of the Committee on Ways and
Means of the Senate and House of Representatives and four additional
members from each house, who are designated by the House Speaker and
the Senate President.
According to the Congressional Planning and
Budget Office, a revenue audit would ensure that taxes are properly
“assessed, collected and accounted for.”
It describes the committee’s function this
way: “The oversight function stipulated in Republic Act 8424, or
the 1997 Tax Reform Act, is an attempt by Congress to make a more
conscious effort to monitor and ensure the proper implementation of
tax reforms/programs.”
Another unused anticorruption tool is the
Commission on Audit (COA) Resolution 95-208, which asserts COA’s
power to audit not only government expenditures but also revenues.
Almost a decade after it was issued, the resolution remains
unenforced.
During his term, President Joseph Estrada signed
Executive Order 38, which directed the BIR and the Department of
Finance to work with COA to enforce the resolution.
Former Audit Commissioner Sofronio Ursal, the
resolution’s proponent, pointed out that COA would not audit the
taxpayer but would review the procedures followed by the BIR’s
assessing and collecting officers. This makes it very similar in
principle to the proposed revalida.
Some BIR insiders believe the COA cannot conduct
a review audit of the BIR, because the commission does not have the
capability to do so.
Former revenue commissioner Efren I. Plana, who
launched an anticorruption campaign during his stint in the 1970s,
sees it differently. During his stint, “I even asked for the help
of COA,” he points out.
“I do not believe,” he adds, “in the BIR
being an independent republic.”
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