EDITORIAL

5 August 1992

NECESSARY EVIL

Because of the nature of its work, the Bureau of Internal Revenue is one of the most necessary government offices; also because of the nature of its work, the BIR will never be popular. As long as human beings bless agencies that give them good things but curse those that take away, the BIR will always be more cursed than blessed.

The BIR is usually cursed because the citizens who pay their taxes do not see the goods and services that these taxes are supposed to buy. The BIR has no say over how its collections are disbursed, but to the ordinary citizen, the failure of the government to deliver goods and services is sufficient reason to regard the BIR as an agency engaged in legalized extortion.

The BIR is cursed even more frequently these days because the government has not been spending as much as it should. From January to June, the government spent P18.3 billion less than it had programmed; during that same period, the BIR exceeded its target of P66.9 billion by nearly a billion pesos.

The P18.3-billion shortfall in government spending included P2.7 billion for debt service, P2.5 billion for government agencies and P2.2 billion for local governments. The slash in expenditures for local governments amounts of about 24 percent of the P9.1 billion originally programmed.

In effect, the government violated the tacit services-for-taxes bargain it has made with the citizenry -- and much of the blame is heaped on the BIR even though the shortfall in services was due to the failure of other revenue-generating agencies, notably the Bureau of Customs and the Asset Privatization Trust. The P14 billion in uncollected taxes Sen. Ernesto Herrera has been railing against are really customs duties and, as such, the responsibility of the Bureau of Customs, not the BIR.

The BIR also gets criticized when the administration proposes to raise taxes or to impose new ones. The usual argument is that the BIR should first run after big-time tax evaders before squeezing more money out of corporations and individuals that already pay their taxes religiously.

While this argument should more properly be directed toward the national government than toward the BIR, the BIR is not exactly blameless in this regard. Since the BIR places undue stress on meeting its collection targets, its officials find it more efficient to collect more money from those who pay without complaint and to enter into compromise agreements to avoid litigation with those who have huge arrears.

Moreover, the wide discretion given to BIR officials to enter into such compromise agreements is open to abuse. Many such agreements are grossly disadvantageous to the government - and invariably, the suspicion arises that one or the other revenue official received money under the table.

There are many BIR agents who are obviously living beyond their means. Their unexplained prosperity leads to the inescapable conclusion that they have been receiving payoffs from corporations and individuals whose tax liabilities they have either reduced or overlooked.

And so, the way the BIR goes about collecting taxes, while “efficient” in a certain sense, reinforces the image of the BIR as an unjust, inequitable and even corrupt organization.

This is the image the BIR has as it celebrates today the 88th year of its existence. It is regarded as the classic example of a necessary evil - to the point that the necessity of its existence forces many government officials to overlook the many evils the bureau and its more corrupt officials and agents continue to perpetrate.

The task of the BIR is to conduct itself in such a way as to persuade the citizenry that it is a necessary organization which is not more evil than is necessary.