The latest (February) data on the performance of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) should provide more than a small amount of comfort to those who are beginning to despair over the Aquino administration’s competence. While one month’s performance of these agencies is obviously no indication of a trend, it is still a very encouraging sign. Kim Henares of the BIR and Ruffy Biazon of the BOC deserve the applause of the Filipino people for jobs well done.
Only consider: The BIR’s tax collections increased to P69 billion in February this year from P53 billion last year, which comes out to an additional 28.6 percent—a collection performance which hasn’t been seen in more than 20 years, without new taxes. For the same period, the BOC collections rose by 20 percent, also a record.
More to the point, on an annualized basis (and this, of course, is a heroic assumption), this means that our tax effort—the ratio of tax revenues to GDP—is now higher than what was targeted in the Philippine Development Plan (PDP). One may cavil at the PDP’s low targets for tax effort (an increase of 0.3 percentage points a year for the BIR and 0.1 percentage points for the BOC up to 2016), but hey, the 2012 figures (January and February) show a tax effort increase of 0.7 and 0.8 percentage points, respectively—and that is certainly nothing to sneeze at. Plus, it must be remembered that for 2011, while the BIR under Kim Henares increased its tax effort by 0.4, the BOC under the unlamented Angelito Alvarez showed a decreased tax effort (by 0.2).
So let us give credit where it is due. And for the sour-grapers who point out that P5 billion of the BIR’s collection increase was from the Peace Bond taxes, which seems to be still the subject of a court case, it must be also pointed out that sans that P5 billion, the BIR collections would still have increased by close to 20 percent. This, according to Finance Undersecretary Gil Beltran, a career professional, is still a darned good performance.
The moral of the story is that when you have competent, honest officials at the helm, progress is more rather than less assured.
A logical question would be: How was this apparent improvement in tax administration made possible? Until public finance expert Chat Manasan gives a definitive answer, one ventures the hopefully educated guess that in the case of the BIR, perhaps the message sent by the Run After Tax Evaders (RATE) program of the government, started under President Gloria Macapagal-Arroyo but pursued doggedly by Henares, is being heard loud and clear: Try to cheat on your taxes and we will get you. And the equivalent Run After Tax Smugglers (RATS) program, also started by Arroyo, may have been given new life by Biazon, who also created a Revenue Enhancement and Protection team, whose existence he formalized only this month, but which had been operating since February.
The result of Biazon’s activities speaks for itself: BOC collections in the first 12 days of this month are 28.1 percent higher than they were in the same period last year.
In the BIR case, the media reports show that 100 tax cases (as of almost end-March) have been filed with the Department of Justice since the beginning of the new administration, or over a period of 21 months. That makes for just under five cases a month, which is certainly higher than the program target of one case a week. The 100th case, filed on March 29, was against a doctor who failed to give receipts for her services. Strong message to errant members of the medical profession there, although there have been complaints (none formal) that the BIR is in overkill mode, and has run roughshod over the rights of certain taxpayers.
But here is where the bouquets/applause end, and where the brickbats/applesauce begin. Those RATE and RATS cases, filed with the DOJ, seem to lie there and almost die there. Which means the DOJ seems to be the bottleneck: It has resolved (by filing formal charges) only 10 of the RATE cases and two of the RATS cases, although it is supposed to resolve these cases within 60 days.
Why is the DOJ so slow? Because the prosecutors seem to be overloaded: According to the latest DOJ annual report, the average caseload per prosecutor in a year is 183 cases for investigation and 510 cases for prosecution.
And why is there such an overload? Because there are not enough prosecutors. As of end-December 2010, 542 plantilla items for prosecutors were unfilled, while as of March 15 this year, the vacancies had risen to 554 positions. The prosecutorial ranks are thinned by appointments to the judiciary.
Are the positions vacant because prosecutors are underpaid? Prosecutors, thanks to the April 2010 Prosecution Service Act, now earn, at the lowest level, close to P65,000 a month. That is not peanuts. That Act, by the way, created more than 1,000 new prosecutor positions. These new positions were supposed to be filled this year, but as of this writing, there is zero fill-up rate.
So why then are the original positions vacant? Because Malacañang, out of about 300 recommendations made by the DOJ early in 2011 for prosecutors, has approved only 50 as of July in that same year. The remaining recommendations have remained unacted upon, moldering first on the desk of the Executive Secretary, and then on the desk of Aquino.
And why are the 1,000 newly created positions with zero fill-up rate? Because no money was allotted for these in the 2012 budget.
And that’s how this administration fulfills its campaign promise of strengthening the DOJ as part of its war against corruption.