Lowered BIR targets raise eyebrows
JUST the other week the Department of Finance announced that the revenue collection target for the Bureau of Internal Revenue (BIR) has been slashed from P765.8 billion to P741.3 billion, or a reduction of about P25 billion.The move immediately raised eyebrows and triggered renewed speculation over the real motive behind this decision by Finance Secretary Gary Teves. There are three reasons for the raised eyebrows.
The first has to do with President Arroyo’s infrastructure commitments made during her State of the Nation address (SONA). The accelerated development of her “superregions” requires trillions of pesos.
The timing of her stepped up infrastructure program combined with Teves’s reduction of BIR collection goals immediately raises the question: Where will the government get the money to fund its ambitious goal? The spending spree can go with a borrowing binge but that would contradict the administration’s current fiscal and deficit objectives.
The second has to do with Teves’s unceremonious axing of the highly respected former BIR Commissioner Jose Mario Buñag. To this day the move is still causing much confusion as to whether or not the government values good public servants. Buñag is one of those rare individuals who ventured into government service out of a desire to serve the nation after making his mark as one of the country’s top tax lawyers in the private sector.
As BIR commissioner, Buñag managed to remain untainted by controversy. He whipped his agency into shape as a team obsessed with raising revenue collection levels. He achieved this rare feat in 2006, a milestone in the history of government revenue generation.
In fact, the feat was one of the highlights in pre-SONA newspaper ads where the government trumpeted its 2006 “Balanced Budget,” highlighting the record collection of the BIR in 2006 and the fact that the record overshadowed the BIR’s own 2005 collection level. Buñag was BIR commissioner when this feat was achieved.
In view of the jubilation over the BIR’s 2006 performance, observers were perplexed when Teves began berating the agency early this year over what he called collection shortfalls. They recall that Buñag had urged a “downward adjustment” of the 2007 targets since the original goal was about 30 to 40 percent more than the 2006 target. Besides, the BIR was being made to reach it without additional budgets, manpower or technology support.
Teves rejected Buñag’s recommendation to lower 2007 targets. Instead, he fired the BIR chief.
With Buñag out of his hair, Teves then turned around and lowered the BIR targets. What gives?
The move raises a further question: Are BIR targets merely whimsical and arbitrary? The sequence of events tends to show that Teves had merely set Buñag up for a disgraceful departure. He raised the revenue goal to impossible heights, rejected a Buñag plea to lower it to reasonable levels, then axed Buñag. And then he lowered the target.
Now that he has finally gotten rid of, Teves now has to make do with less revenue. Where’s the financial wisdom and logic in that? Was the government’s revenue collection program caught in the crossfire of personal animosity?
Now comes the third reason for raised eyebrows. Teves named Lilian Hefti, Buñag’s erstwhile deputy, as the axed commissioner’s successor. Again, looking for the logic behind the decision to appoint her is like looking for the proverbial needle in a haystack. As a key member of Buñag’s team, wasn’t Hefti partly responsible for the agency’s “underperformance,” which supposedly drew Teves’s ire?
By naming Hefti as Buñag’s successor, isn’t Teves merely perpetuating the infirmity her erstwhile boss and predecessor caused at the BIR?
The view is that Teves’s decision to reduce the BIR’s collection targets was grossly unfair to both Buñag and the government. It is also unfair to Hefti.
Are the lowered targets evidence of Teves’s lack of confidence that she can match her predecessor’s performance?
Hefti has little reason to worry, however. It could be that Teves is all set to applaud her collection since she is expected to hit a much lower goal. Then, Teves would be able to tell all and sundry that BIR hit its target after he axed Buñag.
If this whole affair is unfair to Hefti, it may be because she—like the revenue collection program—may have been merely caught in the crossfire of personal animosity. In the future, a way should be found to prevent government revenue collections from being held hostage by a single official’s pet peeves.
Statesmen who can rise above personal motives, indeed, are hard to come by these days. They just kicked one out on the excuse of collection shortfalls.
