Better Philippines

One-Two-Three

This country’s next president should seriously look into the graft and corruption that has been going at the Bureau of Internal Revenue. It is my hope that the next president will make it his or her mission to personally ­go after corrupt BIR officials and personnel. I’m thinking at least 10 BIR officials/personnel tried, convicted and penalized per year during the duration of his term. That could be enough to send a chilling message to all the grafters and corruptors.

Clearly, I am still all riled up because of Philippine Star columnist Cito Beltran’s recent piece about the BIR. In his column, Mr. Beltran described how brazen some tax collectors have become and how it seems corruption is tolerated and possibly even encouraged within the bureau. He noted that the system within the bureau has made it possible for our tax collectors to have their way with taxpayers and it wouldn’t matter as long as they are able to meet their quotas.

A number of commenters have criticized Mr. Beltran’s column. A few of them seem to hold the belief that taxpayers should just pay the right taxes and everything will just be peachy. I agree it could be argued that taxpayers are also to blame for all the graft and corruption going on in the BIR. It could be said that graft and corruption would not exist in the BIR if taxpayers just paid what is due to the government and refrained from offering bribes.

The reality is taxpayers are wired to do everything – including illegal means for some – to avoid paying too much in taxes. That is the taxpayer’s nature. The responsibility of ensuring that correct taxes are collected rests with the tax collectors. That is the job we are paying them to do after all. Unfortunately, many, if not all, BIR personnel are parasites.

Curiously, isn’t it strange that our lawmakers don’t seem to have any interest at all to investigate the shenanigans going on in the BIR? Not that we even need a congressional inquiry to uncover the problem. Our lawmakers need only acknowledge, admit and craft the necessary laws to address what they already know.

But, our lawmakers are busy with other things. Some of them may even be thinking about new taxes, which leads me to ask: Why does the national government always seem to be in need of more taxes? I am not an economist and my financial knowledge is limited to counting the very limited money I have in my wallet but I would like to venture a guess. My guess is it is because revenue targets are never met. And, why aren’t revenue targets met? The answer may be as simple as one-two-three.

It is a widely known fact that business owners are favorite targets of BIR people. It is also a known fact that a business owner would eventually end up facing a BIR personnel during the tax season. There’s just no escaping this under the present system.

Negotiations occur during these face-offs. It usually starts out with the BIR personnel informing the business owner that his or her taxes are a certain amount, usually, one that the business owner would find too big. This prompts the business owner to haggle for a reduced amount. So what does the BIR personnel do? He or she offers directly or indirectly the option of paying a reduced amount in exchange for a “fee.” More negotiations ensue but all these eventually end with the business owner agreeing to the terms offered by the BIR personnel. The business owner pays the reduced amount and the BIR personnel collects his “fee.”

It should be noted that sometimes the initial tax amount quoted by the BIR personnel/official isn’t even correct. More often than not it is higher than what is really due. This is the BIR personnel’s strategy to get the business owner to enter into negotiations. As I said it is just one-two-three as in “na-wantutri” or “naloko” in the vernacular.

So what happens when the national government finds that its revenues have fallen short? It calls for more taxes. Unfortunately, imposing more taxes will never fill in the gaps. It will just provide the tax collector the opportunity to carry out his or her evil deeds. The classic theory is that more taxes mean more and better government services. The fact is more taxes just mean more money for the corrupt tax collector.