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A Preliminary Report Card of the BIR and Customs Commissioners

(Article published in the May 13, 2002 issue of TODAY, Business Section)

When, on April 30, 2002, Justice Sabino De Leon, Jr. introduced me during lunch to his fellow justices of the Supreme Court and again, two hours later, to the bar candidates who were to take their lawyer’s oath, as "having the distinction of having been the tax professor of both the incumbents Commissioner of Internal Revenue and Commissioner of Customs", I decided to keep an eye, every now and then on how my boys were performing their public duties.

After all, if their knowledge of taxation (or lack thereof!) is, albeit only to a certain extent, the fruit of my teaching labors, then it is incumbent on me to watch from a distance, and like Merlin, make occasional apparitions to cheer or criticize as the circumstances warrant. Recently, the two officials submitted their report cards to the public and, to my delight (even if I had nothing to do with their accomplishments), showed they continue to carry the torch we, their mentors at the Ateneo Law School, passed on to them when they were young and full of hope.

The report on their tenure shows that both of them have approached and will probably continue to approach their common object of increasing collection from three directions: first, a strong stress on voluntary compliance; second, the judicious harnessing of information technology; and third, relentless purification of their offices’ esprit de corps.

Without doubt, yielding money to the government, be it in the form of internal revenue taxes like the VAT or the customs duties you pay on imported goods, is as pleasurable as going to the dentist. History records only Oliver Wendell Homes as enjoying paying his taxes on the basis of his oft-quoted statement that "taxes are the price we pay for a civilized society". The rest of us, even without taking issue on whether it is a fair exchange, simply liken it to pulling teeth.

But still, the whole revenue collection system of the country cannot stand if it is not founded primarily on voluntary compliance. Hence, it makes absolute sense for the two commissioners to try to make payment as painless as possible. Commissioner Rene Baņez has began the study of the needs and requirements of the various types of taxpayers, is developing a taxpayer and internal client communication plan, is pursuing a taxpayer awareness and education program, and is seeking to inculcate in his bureau customer service orientation programs.

Commissioner Antonio Bernardo, for his part, has been conducting meetings and dialogues with what he calls his private sector partners, such as the Port Users Confederation as well as the PCCI, the Chamber of Customs Brokers, Inc., the Federation of Philippine Industries, Inc. and the Association of PetroChem Manufacturers of the Philippines. These meetings are his mechanism for getting feedback as well as receiving suggestions on how to improve the service.

Computers are now part of the BIR’s collection effort. Rene Baņez has installed 3,487 documentary stamp-electronic imprinting machines to identified users. E-filing of returns and payment of tax is onstream. A number of BIR forms may now be downloaded from the BIR website. At the Bureau of Customs, Antonio Bernardo is using information technology is decrease procedural steps and reduce the number of required signatures (you know how much that saves the importer) on the processing of papers, lodgement is done electronically through the internet, and data exchange linkages are being established with the relevant government agencies.

The carrot and stick technique has proven effective in both agencies. Training programs, salary upgrades, standard setting and identification of accountabilities are the focus of BIR’s personnel strategy. Seven thousand nine hundred eighty eight BIR employees attended the bureau’s 120 seminars on the Code of Conduct. At the same time, the stick, when necessary, has fallen without hesitation: eleven cases for dismissal and seven cases for suspension of erring employees have been forwarded to the Department of Finance.

One thousand two hundred three customs personnel have undergone ethics workshops and seminars on public accountability conducted by the Bureau of Customs in coordination with the Office of the Ombudsman. On the other side of the coin, eight administrative cases were filed, from January to March of 2002 (as compared to seven for the whole of 2001) and five more were charged the following April.

The effectiveness of these measures are reflected in their revenue collections. Wooing the taxpayer showed immediate results. The BIR collected P861 million through the DST electronic imprinting machines. The Voluntary Assessment Program (which was favorably endorsed in the August 6 and September 3, 2001 issues of this column) gave the government P3.47 billion. For 2001, actual collections exceeded target goals by P621 million, achieving a 7.73 percent improvement over the 2000 revenues.

The jury is still out on the collection impact of Bernardo’s reforms. He came in only last March 14, 2002. The greater part of the credit for the achievements of his bureau goes to his predecessor, Titus Villanueva. But, even then, under his young watch, some welcome signs have arrived, such as in the anti-smuggling front. Just last week, the Bureau of Customs apprehended 10 million worth of smuggled rice in Leyte. This continues the effort of the former Commissioner Titus Villanueva whose anti-smuggling action plan had, since September 2002, caught 16 vessels smuggling 532,696 bags of rice.

More significant, detractors apparently have began to try to undermine Commissioner Bernardo with the canard that he and his staff are "drowning" and are unable to live up to their responsibilities. Detractors are invariably an indication that the remedies are starting to take effect; established corruption is under threat.

I’ve got bad news for those people. Tony Bernardo, like Rene Baņez, is no babe in the wood. They were not born yesterday. In my classroom, they had undergone the moral equivalent of the tough times they are facing now. They were taught to work hard and harder still when the going got rough. They were trained to bite, never to let go. They were made, literally and figuratively, to run, with fire in their guts and a furnace in their hearts. They were shown how to continue looking at the stars even as they were biting the dust so they could rise with limbs of steel. Be not mislead by the meekness of their mien and the mildness of their manner. We taught them well at the Ateneo. They will deliver.